Five from the Fourth: new published opinions on ERISA, immunity, debt collection, arbitration, and immigration

The Fourth Circuit issued published opinions in five cases today. That is a large number of opinions in argued cases for a single day. Two of the cases were argued in September. Both were split decisions. Two of the cases were argued in October. Both were unanimous as to outcome, but one featured an unusual concurring opinion joined by a panel majority. The fifth decision, from a case argued in December, was unanimous. I hope to have more to say about at least some of these opinions in the future, but here is a capsule summary for now.

Fortier v. Principal Life Ins. Co.  is a dispute over disability insurance. A split panel affirms the interpretation of an ERISA plan administrator that resulted in a denial of benefits. Judge Niemeyer wrote the opinion, which was joined in by Judge Wilkinson. Judge Floyd dissented. 

Lee-Thomas v. Prince George’s County is a dispute over sovereign immunity for a county board of education. A split panel affirms the district court’s decision that a statutory waiver of immunity, as interpreted by Maryland’s Court of Appeals, preserved claims against a county board’s of education for $100,000 or less. Judge King wrote the opinion, which was joined by Judge Davis. Judge Keenan dissented. 

Peabody Holding v. United Mine Workers presents a dispute about who decides arbitrability. A Fourth Circuit panel unanimously holds that the court rather than arbitrator must decide arbitrability, because the agreement contains no language unmistakably designating arbitrability for arbitration. Addressing arbitrability in an exercise of its independent judgment, the appellate court concludes that the dispute is arbitrable. Judge Diaz wrote the opinion, which was joined in by Judge Niemeyer and Judge Wynn. 

Zelaya v. Holder is an immigration case. The Fourth Circuit denies the petition for review with respect to an asylum claim and a withholding of removal claim, but grants the petition for review with respect to a Convention Against Torture claim. Senior Judge Hamilton wrote the opinion for the court, which was joined in by Judge Davis and Judge Floyd. Judge Floyd wrote a separate concurrence, in which Judge Davis joined. (One lesson? When Judge Floyd writes a separate concurrence, turnabout is fair play. See here for this panel’s similar voting in a different case. One question: What is going on with this panel?)

Warren v. Sessoms & Rogers is a case about the Fair Debt Collection Practices Act. The Fourth Circuit holds that the district court, based on the defendant’s characterizations of its Rule 68 offer of judgment, incorrectly dismissed the FDCPA complaint. Judge Motz wrote the opinion, in which Judge Gregory and Judge Floyd joined. (Judge Floyd did not write a separate concurrence.)

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4th Circuit vacates judgment against super-cautious former trustees of ERISA plan

The Fourth Circuit today vacated  a judgment issued against the former trustees of an ERISA plan. Judge Agee wrote the opinion  in Plasterers’ Local Union No. 96 Pension Plan v. Pepper, which was joined in by Judge Duncan and Senior Sixth Circuit Judge Damon Keith.

After losses in the 1970s and ’80s, the former trustees adopted a very conservative investment plan and refused to consider deviations from it. Consequently, the plan generated lower returns than it would have adopted had it followed a more aggressive strategy.

The opening paragraph of the opinion:

Edgar Pepper and James Lertora (collectively “the Former Trustees”), former trustees of the Plasterers’ Local Union No.96 Pension Plan (“the Plan”), appeal from the judgment of the United States District Court for the District of Maryland in favor of the current trustees of the Plan (“the Current Trustees”). The district court’s judgment was based on its finding that the Former Trustees breached their fiduciary duties under the Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1001 et seq., regarding the investment of Plan assets as set forth under 29 U.S.C. § 1104(a)(1)(B) and (C). On appeal, the Former Trustees challenge the district court’s determination as to liability, its method of calculating damages, and the award of attorneys’ fees. We conclude that the district court erred as to each of these issues, and therefore vacate the judgment and remand the case for further proceedings.

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Fourth Circuit reverses district court reversal of benefit denial notwithstanding testimony of well-meaning family doctor

The Fourth Circuit issued an unpublished per curiam opinion today in Scott v. Eaton Corp. Long Term Disability Plan. The panel, composed of Judges Motz, King, and Duncan, unanimously reversed a district court decision (Senior Judge Herlong, D.S.C.) that reversed a disability plan’s denial of benefits. The appellate panel accepted the plan’s argument that its decisionmaking process was sound and that its ultimate decision was supported by substantial evidence. After setting forth the law that an ERISA plan administrator’s decision is reviewed for abuse of discretion, the court wrote:

The record is clear that Eaton thoughtfully considered the views of Dr. Riley. Eaton and its  reviewers discussed Dr. Riley’s views, but gave them little weight because of their inconsistency and the fact that many of them were not based on objective evidence. Furthermore, Dr. Riley’s conclusions–those of a well-meaning family doctor–were contradicted by several specialists, who gave no indication of unreliability. It was not unreasonable to discount Dr. Riley’s conclusions in these circumstances.

 

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Fourth Circuit affirms denial of preliminary injunction seeking continuation of health care benefits

The Fourth Circuit issued a published opinion in Dewhurst v. Century Aluminum Company affirming the denial of a preliminary injunction seeking continuation of certain health care benefits. The dispute in Dewhurst arose out of Century’s decision to modify or terminate retiree health benefits for certain retirees, who then filed a suit contending that their benefits were vested and therefore protected from modification under the the Labor Management Relations Act and ERISA. Judge Copenhaver of the Southern District of West Virginia denied a motion for a preliminary injunction. Judge Agee authored the unanimous opinion affirming Judge Copenhaver’s denial of relief. Judges Wilkinson and King joined Judge Agee’s opinion.

The decision rejects appellants’ reliance on the so-called Yardman inference (named for the Sixth Circuit’s decision in Intl. Union, United Automobile, Aerospace & Agricultural Implement Workers of America v. Yard-Man, Inc., 716 F.2d 1476 (6th Cir. 1983)). Appellants relied on Yard-Man for the proposition that retiree benefits “continue so long as the prerequisite status is maintained.” Judge Agee’s opinion concludes that the appellants overread not only Yard-Man, but also a Fourth Circuit decision (Keffer v. H.K. Porter Co., 872 F.2d 60, 62 (4th Cir. 1989)) that appellants (mistakenly) characterized as adopting appellants’ overly expansive interpretation of Yard-Man.

The decision also contains language emphasizing the clear showing of a likelihood of a success on the merits that must be made by one seeking a preliminary injunction.

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