Four Court Cases for Benefits Attorneys to Watch

Fifth Circuit Affirms Texas Federal Court’s Injunction in Abortion/Transgender Healthcare Dispute

In Franciscan Alliance v. Becerra, case number 21-11174, the U.S. Court of Appeals for the Fifth Circuit affirmed a Texas federal court judge’s permanent injunction, enjoining the U.S. Department of Health and Human Services from enforcing certain requirements under Section 1557 of the Affordable Care Act (ACA) against several religious healthcare providers. More specifically, the injunction blocks HHS from requiring the medical providers to perform abortions or gender transition-related health care procedures in violation of their sincerely-health religious beliefs.

While the Fifth Circuit found that the medical providers’ challenge, based on violations of the Administrative Procedure Act (APA), was moot, the court affirmed the district court’s holding in two other respects. First, the appellate court found that the district court did not err in granting permanent injunctive relief against Section 1557 and all future agency action. Second, the appellate court ruled that the district court did not err in finding that the medical providers had demonstrated irreparable harm.

Pastors Sue Church Over Missing Retirement Funds

A group of pastors has sued the African Methodist Episcopal Church for over $90 million missing from their retirement funds. Multiple individual lawsuits have been consolidated into the single lawsuit of In re: AME Church Employee Retirement Fund Litigation, case number 1:22-md-03035, U.S. District Court for the Western District of Tennessee. The consolidated lawsuit covers an estimated 5,000 retired and current church employees.

The pastors recently sought a preliminary injunction prohibiting the church from sending retirement plan participants letters, with checks, describing valuation adjustments to their individual retirement accounts. The AME Church (AMEC) began sending these letters to named plaintiffs and proposed class members after the pastors filed the first lawsuit in March 2022. The pastors argue that the letters use language foreshadowing AMEC’s argument that cashing the checks constitutes a waiver of claims and damages in the case.

AMEC defended the communications by stating that they accompanied distributions that were either the minimum required by federal law, or responses to individual retiree requests.

The pastors also recently amended their complaint to include seven alternative claims for relief under the Employee Retirement Income Security Act (ERISA), should the court determine that federal law governs the church retirement plan.

Virginia Federal Court to Hear Gannett’s Bid to End ERISA 401(k) Mismanagement Suit

A Virginia federal court was poised to hear arguments on Gannett Co. Inc.’s motion for summary judgment in a proposed class action suit from workers over the mismanagement of their 401(k) funds. The workers allege that Gannett, a newspaper conglomerate, mismanaged their 401(k) plan in violation of ERISA by keeping stock from former parent company Tegna Inc. in its offerings for too long. They claim that Gannett invested too much of the plan’s assets into Tegna common stock despite awareness of problems with the investment and its volatility, costing plan members about $135 million.

Gannett filed a motion for summary judgment in the suit, alleging that a safe harbor provision protected it from plan participant claims concerning investment outcomes resulting from individual investment decisions. The company also argued that phasing out of the Tegna stock fund was within the range of reasonable judgments that plan fiduciaries may make.

The case is Quatrone v. Gannett Co. Inc. et al., case number 1:18-cv-00325, U.S. District Court for the Eastern District of Virginia.

Fifth Circuit Weighs BP ERISA Class Action Suit

The U.S. Court of Appeals for the Fifth Circuit is considering issues in two proposed class action lawsuits. Former employees claim that BP Corp. diminished the retirement benefits of Standard of Ohio, or Sohio, workers, after converting their legacy retirement plan. The former employees allege that BP misinformed them about their retirement benefits during the conversion process.

About 300 former employees in an ERISA class action filed in 2020 want to join Guenther v. BP Ret. Accumulation Plan, case number 21-20617, an ERISA class action first filed in 2016. The Texas federal district court denied their motion to intervene. The proposed class has appealed the denial of their motion to intervene before the Fifth Circuit.

The court has stayed the employees’ 2020 class action suit pending the resolution of Guenther after certifying that case as a class action in March 2021. The class in the Guenther suit seeks no monetary damages, although reformation of the retirement plan could result in BP owing the class members additional funds.

HBL has experience in all areas of benefits and employment law, offering a comprehensive solution to all your business benefits and HR/employment needs. We help ensure you are in compliance with the complex requirements of ERISA and the IRS code, as well as those laws that impact you and your employees. Together, we reduce your exposure to potential legal or financial penalties. Learn more by calling 470-571-1007.

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Hall Benefits Law, LLC

HBL offers employers comprehensive legal guidance on benefits in mergers and acquisitions, Employee Stock Ownership Plans (ESOPs), executive compensation, health and welfare benefits, healthcare reform, and retirement plans. We counsel a wide spectrum of clients including small, mid-sized, and large companies, 401(k) investment advisors, health insurance brokers, accountants, attorneys, and HR consultants, just to name a few. HBL is passionate about advising clients, and we are dedicated to our mission: to provide comprehensive, personalized, and practical ERISA and benefits legal solutions that exceed client expectations.

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