liability insurance for construction worker

The Oyez Project: Economic Activity Issues - Employee Retirement Income Security Act
U.S. Supreme Court Cases, presented by The Oyez Project (www.oyez.org)

• Alessi v. Raybestos-Manhattan, Inc.
  

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• Bay Area Laundry & Dry Cleaning Pension Trust Fund v. Ferbar Corp.
  

  The Multiemployer Pension Plan Amendments Act of 1980 (MPPAA) requires employers who withdraw from underfunded multiemployer pension plans to pay a "withdrawal liability," which is dischargeable with an arranged series of periodic payments. The Bay Area Laundry and Dry Cleaning Pension Trust Fund (Fund) is a multiemployer pension plan for laundry workers. The Ferbar Corporation contributed to the Fund, but ultimately ceased doing so. Subsequently, the Fund's trustees demanded payment of Ferbar's withdrawal liability. The trustees decided to allow Ferbar to satisfy its obligation by making monthly payments. However, Ferbar never made a payment. Ultimately, the District Court granted Ferbar summary judgment on statute of limitations grounds. The court noted that the trustees had filed suit eight days too late. This was the date Ferbar was to make its first payment. In affirming, the Court of Appeals held that the six-year period began to run on the date Ferbar withdrew from the Fund, in March 1985. Under this view, the trustees commenced suit nearly two years too late.

• Black & Decker Disability Plan v. Nord
  

  With the recommendation of his doctor, Kenneth Nord filed for disability benefits with his employer of 25 years, Kwikset Corp., a company owned by Black & Decker Corp. After the company denied his claim, Nord asked for a review of the denial. A doctor hired by the company determined that Nord could in fact perform the duties required by his job and was therefore ineligible for benefits, despite determinations to the contrary by Nord's physician, his orthopedic surgeon and a Black & Decker human resource representative. Nord sued to have the decision reversed, claiming that the company's preference of its doctor's opinion over the opinions of the other physicians violated the Employee Retirement Income Security Act of 1974. The district court ruled in favor of Black & Decker Corp. The 9th Circuit Court of Appeals reversed.

• Central Laborers' Pension Fund v. Heinz
  

  Thomas Heinz worked as a construction worker for 20 years, then retired. Upon retirement, he began to receive pension payments from the Central Laborers' Pension Plan. He continued to receive the pension after he took another job as a supervisor in the construction industry. The pension plan had a list of occupations that a recipient could not work in while receiving pension payments, but construction supervisors were not included. After two years, however, Central Laborers' Pension amended the list of prohibited professions to include construction supervisors. As a result, Heinz stopped receiving his pension payment. He and Richard Schmitt, a friend who was in the same situation, filed suit in federal district court. They claimed that the amendment, because it was passed after they had already started receiving the benefits, violated the "anti-cutback" provision of the Employee Retirement Income Security Act (ERISA) of 1974. ERISA states that amendments to a pension plan may not decrease the "accrued benefit of a participant." Because the amendment barred them from receiving payments that they were otherwise eligible for, Heinz and Schmitt claimed that it had reduced their "accrued benefit." Central Laborers' Pension, however, argued that the men were still eligible to receive the same pension, they just could not receive it while working as construction supervisors. Because the value of the plan itself had not been changed, only the stipulations for receiving it, the pension plan managers argued that the amendment did not violate ERISA.

  The federal district court sided with the pension plan. A divided Seventh Circuit Court of Appeals panel, however, reversed the decision, writing that "an amendment placing materially greater restrictions on the receipt of the benefit 'reduces' the benefit just as surely as a decrease in the size of the monthly benefit payment."

• Central States Pension Fund v. Central Transp.
  

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• Central States, Southeast and Southwest Areas Pension Fund v. Central Transport, Inc.
  

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• Concrete Pipe & Products Of California, Inc. v. Construction Laborers Pension Trust For Southern California
  

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• Curtiss-Wright Corp. v. Schoonejongen
  

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• Firestone Tire & Rubber Co. v. Bruch
  

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• Geissal v. Moore Medical Corporation
  

  The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) amended the Employee Retirement Income Security Act of 1974 to permit a beneficiary of an employer's group health plan to elect continuing coverage when he might otherwise lose that benefit because of a "qualifying event," such as the termination of employment. In 1993, when Moore Medical Corporation fired James Geissal, it told him that COBRA gave him the right to elect continuing coverage under Moore's health plan. Later, Moore informed Geissal that he was not entitled to COBRA benefits because he was already covered by a group plan through his wife's employer. Geissal then filed suit against Moore, alleging that Moore was violating CORBA by renouncing an obligation to provide continuing coverage. Ultimately, a Magistrate Judge concluded that an employee with coverage under another group health plan on the date he elects COBRA coverage is ineligible for COBRA coverage under 29 USC section 1162(2)(D)(i), which allows an employer to cancel such coverage as of "the date on which the qualified beneficiary first becomes, after the date of the election... covered under any other group health plan." The Court of Appeals affirmed.

• Great-West Life and Annuity Ins. v. Knudson
  

  In 1992, a car accident rendered Janette Knudson a quadriplegic. At that time, Knudson was covered by the Health and Welfare Plan for Employees and Dependents of Earth Systems, Inc. (the Plan), which covered $411,157.11 of her medical expenses, most of which were paid by Great-West Life & Annuity Insurance Co. The Plan contains a reimbursement provision, which gives it the right to recover from a beneficiary any payment for benefits paid by the Plan that the beneficiary is entitled to recover from a third party. After Knudson filed a state-court tort action to recover from the manufacturer of her car and others, she negotiated a settlement that earmarked $13,828.70 to satisfy Great-West's reimbursement claim. Great-West then filed an action under the Employee Retirement Income Security Act of 1974 (ERISA) to enforce the Plan's reimbursement provision by requiring Knudson to pay the Plan $411,157.11 of any proceeds recovered from third parties. The District Court granted Knudson summary judgment. In affirming, the Court of Appeals held that that judicially decreed reimbursement for payments made to a beneficiary of an insurance plan by a third party is not equitable relief authorized by ERISA.

• Guidry v. Sheet Metal Workers National Pension Fund
  

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• Harris Trust & Sav. Bank v. Salomon Smith Barney Inc.
  

  Section 406(a) of the Employee Retirement Income Security Act of 1974 (ERISA) bars a fiduciary of an employee benefit plan from causing the plan to engage in certain prohibited transactions with a "party in interest." Such a party encompasses entities that a fiduciary might be inclined to favor at the expense of the plan's beneficiaries. After the Ameritech Pension Trust (APT), an ERISA pension plan, allegedly entered into a transaction prohibited by ERISA with Salomon Smith Barney Inc., APT's fiduciaries sued Salomon under section 502(a)(3), which authorizes a fiduciary to bring a civil action to obtain appropriate equitable relief." Salomon arguing that section 502(a)(3) only authorizes a suit against the fiduciary who caused the plan to enter the prohibited transaction. Ultimately, the District Court held that ERISA provides a private cause of action against nonfiduciaries who participate in a prohibited transaction. In reversing, the Court of Appeals held that the authority to sue under section 502(a)(3) does not extend to a suit against a nonfiduciary "party in interest" to a transaction barred by section 406(a).

• Hughes Aircraft Company v. Jacobson
  

  Stanley I. Jacobson and other retired employees of Hughes Aircraft Company were beneficiaries of Hughes Non-Bargaining Retirement Plan. Jacobson and the others claimed in their class