Tag: ERISA

Lehman Brothers Wins Stock Drop Lawsuit

Lehman brothers stock dropA New York federal appeals court once again rejected a breach of fiduciary duty claim against the now bankrupt Lehman Brothers brought by its employee stock ownership plan (ESOP) participants. In In Re: Lehman Bros. Sec. and ERISA Litig., No. 15-2229 (2d Cir. 2016), the US Court of Appeals for the Second Circuit on March 18 ruled that participants “failed to allege sufficiently” that plan fiduciaries violated their duties under the Employee Retirement Income Security Act (ERISA). The appeals court upheld an earlier July 15, 2015 decision by a US district court in New York to dismiss the complaint.

Soon after Lehman Brothers declared bankruptcy in September 2008, the ESOP participants sued, claiming that ESOP fiduciaries breached their fiduciary duties under ERISA “by continuing to permit investment in Lehman stock in the face of circumstances arguably foreshadowing its eventual demise,” the Second Circuit said. The New York district court dismissed the complaint for the first time in 2011, and the Second Circuit court upheld the dismissal in 2013. Both courts cited a long-held legal principle applicable to ESOPs—the presumption of prudence—to support the defendants’ request for dismissal.

However, in June 2014, the US Supreme Court nullified this long-standing presumption of prudence principle in a unanimous decision inFifth Third Bancorp, et. al. v Dudenhoeffer, et. al. According to the Supreme Court in the Dudenhoeffer decision, fiduciaries that evaluate an investment in employer stock may rely on its market price unless there are “special circumstances.” Specifically, the court held that “where a stock is publicly traded, allegations that a fiduciary should have recognized, from publicly available information alone, that the market was over or undervaluing the stock are implausible as a general rule, at least in the absence of special circumstances.” This means that the stock market price is the best estimate of employee stock value. But the Supreme Court did not address what it means by “special circumstances,” so, as a result, lower courts will need to determine when a plan fiduciary should have considered the market price as questionable.

Following Dudenhoeffer, the Lehman employees tried to establish special circumstances by pointing to orders issued by the US Securities and Exchange Commission (SEC) in summer 2008 that prohibited the short-selling of Lehman securities. They argued both that the orders described market conditions that constituted special circumstances and that the orders themselves qualified as special circumstances. The Second Circuit rejected this argument, explaining that the SEC orders “speak only conditionally” about the market effects of short sales.

This Second Circuit ruling marks the first time that a circuit court has applied the Supreme Court’s recent decision reaffirming the high hurdle facing employees who challenge company stock losses under ERISA (SeeAmgen Inc. v. Harris 136 S. Ct. 758 (US 2016)). This special circumstances requirement has derailed several lawsuits in the last two years, with courts dismissing claims involving the company stock plans of various major companies.

ARTICLE BY Brian D. Hector & Jason C. Ray of Morgan, Lewis & Bockius LLP
Copyright © 2016 by Morgan, Lewis & Bockius LLP. All Rights Reserved.

Dave & Busted? Reductions in Employee Work Schedules May Not Negate Employer’s ACA Health Coverage Mandate

Under the Affordable Care Act (ACA), employers with at least 50 full-time employees (“FTEs) must generally offer qualifying health insurance to all employees who work at least 30 hours or more per week. A company that fails to satisfy this so-called “employer mandate” faces the possibility of significant penalties under the ACA. As a result, the ACA amplifies many risks for companies with respect to their employment classifications and the delivery of health care benefits to their employees.

ACA Implications for Employers

In response to these uncertainties, some employers have gone so far as to reduce the hourly work schedules of some employees to less than 30 hours per week to avoid any additional costs under the ACA employer mandate.  In what is believed to be a case of first impression, the plaintiffs in Marin v. Dave & Buster’s, Inc., S.D.N.Y., No. 1:15-cv-036081 challenged their employer over the reductions to their work schedules by filing a class action suit in federal court in May 2015. Specifically, current and former employees alleged that Dave & Buster’s, the national restaurant chain, violated the protections under Section 510 of the Employee Retirement Income Security Act (“ERISA”) by intentionally interfering with their eligibility for benefits under the company’s health plan. They also claimed damages for lost wages and demanded the restoration of their health coverage, as well as reimbursement of their out-of-pocket medical costs.

In response to the lawsuit, Dave & Buster’s filed a motion to dismiss and argued that the plaintiffs’ ERISA Section 510 claim failed as a matter of law because there was no guaranteed “accrued benefit” over future health insurance coverage for hours not yet worked.  On February 9, 2016, the United States District Court for the Southern District of New York denied the company’s motion to dismiss.  The court found that the complaint “sufficiently and plausibly” alleged enough facts to support a possible finding that Dave & Buster’s intentionally interfered with the plaintiffs’ rights to receive benefits under the company’s health plan. The court noted that the complaint referenced specific e-mails and other communications that the plaintiffs allegedly received when their work schedules were reduced, as well as public statements by senior executives and disclosures in the company’s securities filings, which overtly explained that the workforce management protocols were instituted to thwart the potential impact of the ACA on the company’s bottom line.

While the decision on the motion to dismiss does not necessarily mean that the employer will ultimately lose, it does signal the court’s willingness to allow the plaintiffs to develop their legal theories in subsequent court filings. One can also question the impact to the court, at least initially, of the company’s open and obvious disclosures about its reasoning for reducing the employees’ work schedules.  Based on the strong wording of the court’s ruling, however, these obvious and seemingly bold statements certainly did not help the company’s request for an early exit from this case.  As a result, the court may eventually allow robust discovery which could, of course, be cumbersome and expensive for the company.

Takeaways for Employers

In light of this case development, companies that are subject to the ACA employer mandate should review their compliance strategies now to address any risks with their employment classifications and the delivery of future health care benefits to their FTEs, and also take heed in the manner as to how they communicate any reductions in employees’ work schedules.

Article By W. Andrew Douglass & Brian M. Johnston of Polsinelli PC

© Polsinelli PC, Polsinelli LLP in California

Dave & Busted? Reductions in Employee Work Schedules May Not Negate Employer’s ACA Health Coverage Mandate

Under the Affordable Care Act (ACA), employers with at least 50 full-time employees (“FTEs) must generally offer qualifying health insurance to all employees who work at least 30 hours or more per week. A company that fails to satisfy this so-called “employer mandate” faces the possibility of significant penalties under the ACA. As a result, the ACA amplifies many risks for companies with respect to their employment classifications and the delivery of health care benefits to their employees.

ACA Implications for Employers

In response to these uncertainties, some employers have gone so far as to reduce the hourly work schedules of some employees to less than 30 hours per week to avoid any additional costs under the ACA employer mandate.  In what is believed to be a case of first impression, the plaintiffs in Marin v. Dave & Buster’s, Inc., S.D.N.Y., No. 1:15-cv-036081 challenged their employer over the reductions to their work schedules by filing a class action suit in federal court in May 2015. Specifically, current and former employees alleged that Dave & Buster’s, the national restaurant chain, violated the protections under Section 510 of the Employee Retirement Income Security Act (“ERISA”) by intentionally interfering with their eligibility for benefits under the company’s health plan. They also claimed damages for lost wages and demanded the restoration of their health coverage, as well as reimbursement of their out-of-pocket medical costs.

In response to the lawsuit, Dave & Buster’s filed a motion to dismiss and argued that the plaintiffs’ ERISA Section 510 claim failed as a matter of law because there was no guaranteed “accrued benefit” over future health insurance coverage for hours not yet worked.  On February 9, 2016, the United States District Court for the Southern District of New York denied the company’s motion to dismiss.  The court found that the complaint “sufficiently and plausibly” alleged enough facts to support a possible finding that Dave & Buster’s intentionally interfered with the plaintiffs’ rights to receive benefits under the company’s health plan. The court noted that the complaint referenced specific e-mails and other communications that the plaintiffs allegedly received when their work schedules were reduced, as well as public statements by senior executives and disclosures in the company’s securities filings, which overtly explained that the workforce management protocols were instituted to thwart the potential impact of the ACA on the company’s bottom line.

While the decision on the motion to dismiss does not necessarily mean that the employer will ultimately lose, it does signal the court’s willingness to allow the plaintiffs to develop their legal theories in subsequent court filings. One can also question the impact to the court, at least initially, of the company’s open and obvious disclosures about its reasoning for reducing the employees’ work schedules.  Based on the strong wording of the court’s ruling, however, these obvious and seemingly bold statements certainly did not help the company’s request for an early exit from this case.  As a result, the court may eventually allow robust discovery which could, of course, be cumbersome and expensive for the company.

Takeaways for Employers

In light of this case development, companies that are subject to the ACA employer mandate should review their compliance strategies now to address any risks with their employment classifications and the delivery of future health care benefits to their FTEs, and also take heed in the manner as to how they communicate any reductions in employees’ work schedules.

Article By W. Andrew Douglass & Brian M. Johnston of Polsinelli PC

© Polsinelli PC, Polsinelli LLP in California

A Look Ahead to The Supreme Court’s 2015-16 Term

As the Supreme Court winds down its 2014-15 term, the Benefits Law Advisor looks ahead to the ERISA cases and issues the Supreme Court may confront in its next terms. The Supreme Court’s recent ERISA jurisprudence has touched on issues such as remedies (CIGNA Corp. v. Amara and US Airways v. McCutchen), retiree entitlement to healthcare benefits (M&G Polymers v. Tackett), time-based defenses to ERISA claims (Tibble v. Edison Int’l and Heimeshoff v. Hartford Life & Accident Ins.), and the now-defunct “presumption of prudence” that lower courts had applied to ERISA plans’ decision to offer employer stock as an investment option (Fifth Third Bank v. Dudenhoeffer).

As of this writing, the Court has only granted certiorari in one ERISA case for next year’s term, Montanile v. Board of Trustees, No. 14-723, cert. granted Mar. 30, 2015. The Montanile case arose from the familiar situation where an ERISA plan seeks to recover medical benefits paid to an injured participant, after that participant receives a tort recovery for those injuries. Both lower courts granted summary judgment to the plan, with the additional proviso that the plan could impose an equitable lien (under the terms of the plan) on Montanile’s settlement proceeds, even if those monies have been dissipated.

In granting Montanile’s petition, the Court interprets, once again, the term “equitable relief” in ERISA §502(a)(3) – an issue the Court has addressed has repeatedly revisited. In particular, the Montanile case gives the Court a chance to address an open question from its equitable-remedies jurisprudence: is there an “equitable tracing” requirement that obligates ERISA plaintiffs to identify a specific sum of money that may be the subject of an equitable recovery?

The existence of an equitable-tracing requirement has been hotly debated since at least 2003, when the Court’s decision in Great West Life & Annuity v. Knudson firmly established that equitable relief under ERISA was limited to those forms of relief traditionally available in the courts of equity. Since Knudson, many ERISA defendants have successfully argued that equitable relief was only available where plaintiff could identify a particular asset or sum of money that could be made subject to a restitutionary recovery, constructive trust or equitable lien. As a result, the Court has struggled (in this author’s view) with how to apply traditional “tracing” rules, because the Court’s answer could have far-reaching implications both for plans seeking reimbursement, and for participants invoking ERISA §502(a)(3) for redress in fiduciary-breach claims or other violations of ERISA.

It seems that the Court is ready to answer that question in Montanile, judging from the question presented in the Court’s writ. Another similar case, Elem v. AirTran Airways, No. 14-1061 (cert. pet. filed Feb. 27, 2015). is pending before the Court on the participant’s petition.

Beyond Montanile, the Court has several other writ petitions pending, including three cases where the Court has invited the Solicitor of Labor to weigh in with an amicus brief. These cases include:

  • Smith v. Aegon Cos. Pension Plan – In this case, the lower courts dismissed benefits claims on grounds of improper venue. In doing so, the lower courts held that an exclusive-venue provision in the plan required the participant to bring his benefits suit in the specified venue. The Department of Labor (DOL) had submitted an amicus brief to the Sixth Circuit, arguing that venue-selection provisions ran afoul of ERISA’s goal of providing participants with ready access to the courts. The Sixth Circuit, however, rejected DOL’s position and enforced the plan’s venue provision. A Supreme Court decision on this issue would likely be significant, because many plan sponsors are using the plan document to “hard wire” certain defenses to benefits claims – for example, the Court’s recent Heimeshoff decision approved a limitations period established by the plan.
  • Gobeille v. Liberty Mut. Ins. Co. – This case presents a pre-emption question – specifically, whether ERISA pre-empts a Vermont law requiring healthcare payors (including ERISA plans) to submit certain claims data to the state. A split panel of the Second Circuit held the Vermont law was pre-empted because it imposed additional reporting requirements on those already imposed by ERISA. At the Court’s invitation, DOL filed an amicus brief opining that ERISA does not pre-empt the Vermont statute because it applies to non-ERISA entities, as well, and does not impose significant reporting burdens. The DOL brief added, however, that the Court’s review was not currently warranted, and suggested that “further percolation” of the issue in the appellate courts would be beneficial. Given that the Court’s last decision on ERISA pre-emption was over 10 years ago, the Court may nevertheless be signaling its readiness to take the case, and to issue further guidance on ERISA’s pre-emptive reach.
  • RJR Pension Inv. Comm. v. Tatum – The Tatum case arose from a dispute over plan fiduciaries’ decision to divert the plan of company stock, at a time when the stock was distressed. After the company stock recovered dramatically, participants asserted ERISA claims that plan fiduciaries had acted imprudently in selling the stock at a time when the price was down significantly. The Fourth Circuit held, among other things, that (1) the burden of proving loss causation shifted to plan fiduciaries, upon a showing that the fiduciaries had breached their duty of prudent investment; and (2) plan fiduciaries must show a hypothetical prudent fiduciary “would have” (as opposed to “could have”) made the same investment decision, where there was no evidence that the plan’s fiduciaries had undertaken robust deliberations before divesting the plan’s holdings in company stock. The Court invited the DOL to brief both issues. If the Court takes the case, its decision could be significant. On the former issue, a decision from the Court would resolve diverging lower-court decisions on whether the plaintiff bears the ultimate burden of proof (including loss causation), or whether the burden-shifting approach of trust law – requiring a trustee, upon a showing of a breach of duty, to demonstrate that the breach did not cause the loss – is more appropriate for ERISA cases. On the latter issue, a decision from the Court could provide much-needed guidance on the proper scope of judicial review of fiduciary decision-making.

Although the Court has taken no action yet on the petition, it may be worth watching to see whether the Court takes up the case of UnitedHealthcare of Arizona, Inc. v. Spinedex Physical Therapy USA, Inc., No. 14-1286 (cert. pet. filed April 24, 2015). There, the Ninth Circuit held that a claims administrator is a proper party defendant in a medical benefits claim, even though it otherwise had no obligation as the benefits payer. Because ERISA §502(a)(1)(B) only authorizes suit for “benefits due … under the terms of his plan,” the Ninth Circuit’s reading of the statute – which purports to make claims administrators liable for benefits in a manner not contemplated by “the terms of the plan” – clearly seems overbroad. If left unaddressed, the Spinedexdecision could ultimately prove counter-productive, in that it will inevitably raise costs for service providers, which in turn, will be passed along to the plans, and ultimately to the participants in the form of higher premiums, larger deductibles, or less-generous coverage.

The Supreme Court has demonstrated some enthusiasm for ERISA in recent years. The Montanile case represents a significant beginning to the Court’s ERISA work for the next term. Given the cases and issues before it, however, the odds are that the Court will consider more ERISA cases in the next twelve months.

This post was written with contributions from William H. Payne IV.

ARTICLE BY Charles F. Seemann III of Jackson Lewis P.C.
Jackson Lewis P.C. © 2015

What ERISA Plans Should Know about Money Market Reform

Drinker Biddle Law Firm

Most U.S. money market funds will begin restructuring their operations beginning in 2014 and throughout 2015 and 2016 as a result of the SEC’s adoption of wide ranging changes to the rules regulating these funds.  Since many plan participants invest in money market funds, ERISA plan sponsors, recordkeepers and investment consultants and other advisers will need to plan for operational, contractual, disclosure and other changes in connection with these new rules.

Floating and Stable NAV Funds

One of the biggest rule changes involves how money market funds will be allowed to value their shares.  Currently, money market funds generally offer shares at a stable net asset value (“NAV’) of $1.00.  Under the SEC’s new money market rules, only government and “retail” money market funds can offer their shares at a stable NAV.  Government money market funds are those funds that hold at least 99.5% of their investments in government securities, cash or repurchase agreements collateralized by government securities.  Money market funds that don’t qualify to offer shares at a stable NAV because of the nature of their shareholder base (i.e., institutional money market funds) will have to float their NAVs, meaning the share price will fluctuate from day to day.

Retail money market funds are funds that restrict investors only to beneficial owners that are natural persons.  A beneficial owner is any person who has direct or indirect, sole or shared voting and/or investment power.  Under the new rules, retail money market funds will be required to reasonably conclude that beneficial owners of intermediaries are natural persons.  The SEC stated that tax-advantaged savings accounts and trusts, such as (i) participant-directed defined contribution plans; (ii) individual retirement accounts; (iii) simplified employee pension arrangements, and other similar types of arrangements, would qualify for the natural person test.  On the other hand, defined benefit plans, endowments and small businesses are not considered “natural persons” and would not be eligible to invest in a retail money market fund.

It is widely expected that the SEC’s new money market rules will result in many changes in fund offerings.  For example:

  • Money market funds that currently have both institutional and natural persons as holders may spin off the institutional holders into separate floating NAV funds;

  • Some institutional funds may decide to liquidate or merge with other funds;

  • Some advisers may begin offering new money fund-“like” products that only hold short term securities (60 days or less maturity) and therefore value fund holdings at amortized cost; and

  • Some prime money market funds may change their investment strategies to operate as a government money market fund in order to steer clear of the floating NAV and liquidity fee and gate rules (discussed below).

Effect on ERISA Plans.  The SEC provided examples of how funds could satisfy the natural person definition with intermediaries, including through: contractual arrangements, periodic certifications and representations or other verification methods.  Accordingly, ERISA service providers who hold fund shares in omnibus accounts may expect to be contacted by retail money market funds to provide these certifications or representations and/or to enter into new agreements with funds for this purpose.

ERISA plan sponsors and investment consultants and advisers will also need to be alert to potential changes to existing money market funds currently offered in plans to which they provide services and/or new fund offerings that may be appealing to and/or better serve the best interests of participants.

Liquidity Fees and Redemption Gates

All money market funds, except government money market funds, will be subject to the SEC’s new rules with respect to the imposition of liquidity (or redemption) fees and redemption gates during periods when a money market fund’s weekly liquid assets dip below certain thresholds.  Under these new rules a fund board may impose up to a 2% liquidity fee and a gate on fund redemptions if weekly liquid assets fall below 30% of total assets.  The fund board must impose a 1% liquidity fee if weekly liquid assets fall below 10% of total assets, unless the board decides otherwise.  Of course, if 10% of a money market fund’s assets are below 10% of a fund’s total assets, it would be unlikely that a board would not impose liquidity fees and redemption gates.  The redemption gates can last no longer than 10 days and cannot be imposed more than once in a 90-day period.

Effect on ERISA Plans.  The liquidity fee and gate requirements will usually only be triggered in times of extreme market stress.  But they are features that many ERISA participants and ERISA service providers will not find appealing.  For that reason, there may be more demand from participants for government money market funds, which may, but are not required to, comply with the fee and gate rules.  It is not expected that government money market funds will opt to become subject to these fee and gate rules.

The liquidity fee and redemption gate rules will require recordkeepers to make technical changes in their operations.  These operational changes could be expensive and time consuming to implement especially for smaller plans.  In particular, it should be noted that liquidity fees may vary in amount depending on a fund board’s determination and redemption gates may vary in the amount of days and will need to be removed quickly upon notice by a fund board.  Additionally, there may be contractual impediments to implementation of liquidity fees and gates, which are discussed below.

Many commenters on the proposed money market rules raised questions with the SEC regarding possible conflicts caused by the application of the fee and gate rules to funds in ERISA and other tax-exempt plans.  Specifically, commenters mentioned the following issues with the fee and/or gate rules:

  • possible violations of certain minimum distribution rules that could be interfered with by the gate rule;

  • potential taxation as a result of the inability to process certain mandatory refunds on a timely basis;

  • delays in plan conversions or rollovers;

  • possible conflicts with the Department of Labor’s (“DOL”) qualified default investment (“QDIA”) rules; and

  • conflicts with plan fiduciaries’ duties regarding maintenance of adequate liquidity in their plans.

The SEC’s response generally was that these concerns either were unlikely to materialize or could be mitigated by ERISA plan sponsors or service providers.  For example, with respect to QDIAs, the SEC suggested that a plan sponsor or service provider could (i) loan funds to a plan for operating expenses to avoid the effects of a gate, or (ii) pay a liquidity fee on behalf of a redeeming participant.  In connection with rollovers or conversions, the SEC likewise pointed out that if the liquidity fee caused a hardship on a participant, then the ERISA fiduciary or its affiliate could simply pay the liquidity fee; failing that, the SEC suggested that the fiduciary consider a government money market fund for investment purposes, which is not required to comply with the fee and gate rules.

The SEC continues to work with the DOL on these and other ERISA-and tax exempt specific issues but thus far has not provided any relief from its fee and gate rules for these types of plans and accounts.  Thus, ERISA fiduciaries and plan sponsors may need to consider money market fund offerings in their plans in light of these issues.

Contractual Issues

As noted above, the “natural person” requirements for retail money market funds will require these funds to ascertain information regarding beneficial ownership of fund shares from ERISA intermediaries.  Retail money market funds may ask ERISA intermediaries to make representations about their customers through revised service agreements containing representations about the nature of the intermediaries’ customers.  These funds may also use periodic certifications or questionnaires to obtain this information.

In addition, many existing contracts between money market funds and intermediaries have restrictions in them regarding the imposition of redemption fees and may restrict a fund’s right to delay effecting redemptions thereby putting them in conflict with the new liquidity fee and redemption gate rules.  Recordkeepers who contract with retail or institutional money market funds may therefore be asked by these funds to amend or otherwise revise their servicing agreements with the funds to provide for liquidity fees and redemption gates.

Pricing Changes

The new money market rules will require all floating NAV money market funds to price their shares to four decimal places (e.g., $1.0000).  Recordkeepers will need to adjust their systems to accommodate the four-decimal place pricing system.

Disclosure and Education/Training

ERISA service providers will need to train and educate their personnel on the new money market rules and fund options so that they can answer participants’ questions.  ERISA service providers will need to develop disclosure for ERISA participants that clearly describes the risks and differences in money market funds and new fund options.

Compliance Dates

The new money market rules take effect in various stages over the next two years.  Importantly, the floating NAV, decimal pricing, and liquidity fee and gate rules become effective on October 14, 2016.  That said, the mutual fund industry appears to be moving quickly to prepare to comply, and it is probable that investment advisers to money market funds will begin to make some changes, for example, creating new funds and separating retail and institutional shareholders into different funds well ahead of the 2016 compliance date.  Therefore, ERISA service providers will need to be alert to the possibility that their operations may need to be adjusted as these changes occur.

The SEC’s new money market rules will usher in many changes to money market funds over the next 18-24 months that will affect ERISA and tax-exempt participants who invest in these vehicles and ERISA service providers.  ERISA service providers should begin preparing for these changes by assessing their systems, as applicable, to evaluate whether they can comply with the new rules and, if not, what other investment options might be available to address participants’ short-term investment needs.  ERISA service providers may also want to consider whether non-government money market funds or other short-term liquidity vehicles should be offered to ERISA participants in light of the new fee and gate rules.

ARTICLE BY

Diana E. McCarthy
OF
Drinker Biddle & Reath LLP

Oregon’s Same-Sex Marriage Ban Unconstitutional, Judge Rules

Jackson Lewis Law firm

 

Oregon’s prohibition on same-sex marriage conflicts with the United States Constitution’s guarantee of equal protection, newly appointed U.S. District Court Judge Michael McShane has held in a case filed on behalf of four couples in Multnomah County. Geiger v. Kitzhaber, No. 6:13-cv-01834-MC (May 19, 2014).

Judge McShane explained the measure discriminates against same-sex couples. “The state’s marriage laws unjustifiably treat same-gender couples differently than opposite-gender couples. The laws assess a couple’s fitness for civil marriage based on their sexual orientation: opposite-gender couples pass; same-gender couples do not. No legitimate state purpose justifies the preclusion of gay and lesbian couples from civil marriage.”

A state Constitutional amendment, enacted pursuant to a 2004 ballot initiative organized and sponsored by the Defense of Marriage Coalition, had prohibited same-sex marriage, stating that only “marriage between one man and one woman shall be valid or legally recognized as a marriage.” This initiative and the subsequent Constitutional amendment were in response to the Multnomah County commissioner’s decision to issue marriage licenses to same-sex couples. During the Geiger litigation, Oregon’s Attorney General stated she found it impossible to legally defend the ban because “per- forming same-sex marriages in Oregon would have no adverse effect on existing marriages, and that sexual orientation does not determine an individual’s capacity to establish a loving and enduring relation- ship.” With Geiger, and the U.S. Supreme Court’s 2013 decision in United States v. Windsor invalidating the federal Defense of Marriage Act, same-sex marriage is valid under Oregon state and federal law.

Further, although Oregon enacted a domestic partnership law in 2008, the Family Fairness Act, granting domestic partners similar rights and privileges to those enjoyed by married spouses, the Legislature acknowledged domestic partnerships did not reach the magnitude of rights inherent in the definition of marriage. For example, same-sex couples in Oregon were not entitled to the rights or benefits under the federal Family and Medical Leave Act because Department of Labor guidance recognizes same-sex marriage only if valid under the employee’s state of residence. The DOL, however, has proposed a rule expanding the term “spouse” and, if implemented, will recognize same-sex marriages when recognized in the couple’s state of residence or if performed in a state recognizing same-sex marriage. According to the Secretary of Labor, “The basic promise of the FMLA is that no one should have to choose between succeeding at work and being a loving family caregiver. Under the proposed revisions, the FMLA will be applied to all families equally, enabling individuals in same-sex marriages to fully exercise their rights and fulfill their responsibilities to their families.” No changes have been proposed, however, for purposes of the Employment Retirement Income and Security Act (“ERISA”), the federal law governing employee benefit plans. The DOL counsels employers that, for purposes of ERISA, same-sex marriage should be recognized if valid in the state it is performed.

While Geiger will simplify the legal landscape, employers should review policies, procedures, and benefit plans closely to ensure that same-sex spouses are treated equally in all respects. In addition, Oregon law further prevents employment discrimination based on sexual orientation and family status. Requiring same-sex couples to “prove their status” or take other similar measures that are not required of opposite-sex couples may increase the risk of potential litigation under these laws.

Mei Fung So contributed to this article. 

ARTICLE BY

Scott Oborne
Bryan P. O’Connor
Roger S. Kaplan
 
OF
Jackson Lewis P.C.

The Supreme Court of the United States Holds that ESOP Fiduciaries are not Entitled to a Presumption of Prudence, Clarifies Standards for Stock Drop Claims

Dickinson Wright Logo

On June 25, 2014, the Supreme Court of the United States unanimously held that there is no special presumption of prudence for fiduciaries of employee stock ownership plans (“ESOPs”). Fifth Third Bancorp v. Dudenhoeffer, No. 12-751, 573 U.S. ___ (June 25, 2014) (slip op.).

Background

The Employee Retirement Income Security Act of 1974, as amended (“ERISA”) imposes legal duties on fiduciaries of employee benefit plans, including ESOPs.[1] Specifically, ERISA requires the fiduciary of an employee benefit plan to act prudently in managing the plan’s assets.[2] In addition, ERISA requires the fiduciary to diversify plan assets.[3]

ESOPs are designed to be invested primarily in employer securities.[4] ERISA exempts ESOP fiduciaries from the duty of diversify plan assets and from the duty to prudently manage plan assets, but only to the extent that prudence requires diversification of plan assets.[5]

The recent financial crisis generated a wave of ERISA “stock drop” cases, which were filed after a precipitous drop in the value of employer securities held in an ESOP. Generally, the plaintiff alleged that the ESOP fiduciary breached its duty of prudence by investing in employer securities or continuing to offer employer securities as an investment alternative. Defendant fiduciaries defended on the ground that the plaintiff failed to rebut the legal presumption that the fiduciary acted prudently by investing in employer securities or continuing to offer employer securities as an investment alternative.

The Federal Circuit Courts of Appeals that had considered the issue adopted the rebuttable presumption of prudence but split on the issues of (1) whether the legal presumption applied at the pleadings stage of litigation or whether the legal presumption was evidentiary in nature and did not apply at the pleadings stage of litigation and (2) the rebuttal standard that the plaintiff of a stock drop action must satisfy.[6]

Dudenhoeffer held that ESOP fiduciaries are not entitled to a legal presumption that they acted prudently by investing in employer securities or continuing to offer employer securities as an investment alternative.[7]

The Dudenhoeffer Case

Fifth Third Bancorp maintained a defined contribution plan, which offered participants a number of investment alternatives, including the company’s ESOP. The terms of the ESOP required that its assets be “invested primarily in shares of common stock of Fifth Third [Bancorp].”[8] The company offered a matching contribution that was initially invested in the ESOP. In addition, participants could make elective deferrals to the ESOP.

ESOP participants alleged that the ESOP fiduciaries knew or should have known on the basis of public information that the employer securities were overvalued and an excessively risky investment. In addition, the ESOP fiduciaries knew or should have known on the basis of non-public information that the employer securities were overvalued. Plaintiffs contended that a prudent ESOP fiduciary would have responded to this public and non-public information by (1) divesting the ESOP of employer securities, (2) refraining from investing in employer securities, (3) cancelling the ESOP investment alternative, and (4) disclosing non-public information to adjust the market price of the employer securities.

Procedural Posture

The United States District Court for the Southern District of Ohio dismissed the complaint for failure to state a claim, holding that ESOP fiduciaries were entitled to a presumption of prudence with respect to their collective decisions to invest in employer securities and continue to offer employer securities as an investment alternative.[9] The District Court concluded that presumption of prudence applied at the pleadings stage of litigation and that the plaintiffs failed to rebut the presumption.[10]

The United States Court of Appeals for the Sixth Circuit reversed the District Court judgment, holding that the presumption of prudence is evidentiary in nature and does not apply at the pleadings stage of litigation.[11] The Sixth Circuit concluded that the complaint stated a claim for a breach of the fiduciary duty of prudence.[12]

ESOP Fiduciaries Not Entitled to Presumption of Prudence

In a unanimous decision, the Supreme Court of the United States held that ESOP fiduciaries are not entitled to a presumption of prudence with regard to their decisions to invest in employer securities and continue to offer employer securities as an investment alternative; rather, ESOP fiduciaries are subject to the same duty of prudence that applies to other ERISA fiduciaries, except that ESOP fiduciaries need not diversify plan assets.[13]

The Court began its analysis b
y acknowledging a tension within the statutory framework of ERISA. On the one hand, ERISA imposes a duty on all fiduciaries to discharge their duties prudently, which includes an obligation to diversify plan assets. On the other hand, ERISA recognizes that ESOPs are designed to invest primarily in employer securities and are not intended to hold diversified assets. The Court concluded that an ESOP fiduciary is not subject to the duty of prudence to the extent that the legal obligation requires the ESOP fiduciary to diversify plan assets. The Court found no special legal presumption favoring ESOP fiduciaries.

New Standards for Stock Drop Claims

Although the Court rejected the presumption of prudence, it vacated the judgment of the Sixth Circuit Court of Appeals (which held that the complaint properly stated a claim) and announced new standards for lower courts to observe in evaluating whether a complaint properly pleads a claim that an ESOP fiduciary breached its fiduciary duty of prudence by investing in employer securities or continuing to offer employer securities as an investment alternative.

Public Information

First, the Court concluded that “where a stock is publicly traded, allegations that a fiduciary should have recognized from publicly available information alone that the market was over- or undervaluing the stock are implausible as a general rule, at least in the absence of special circumstances.”[14] In other words, a plaintiff generally cannot state a plausible claim of imprudence based solely on publicly available information. An ESOP fiduciary does not necessarily act imprudently by observing the efficient market theory, which holds that a major stock market provides the best estimate of the value of employer securities. To be clear, the Court did not rule out the possibility that a plaintiff could properly plead imprudence based on publicly available information indicating special circumstances affecting the reliability of the market price.

Non-Public Information

Second, the Court concluded that “[t]o state a claim for breach of the duty of prudence on the basis of inside information, a plaintiff must plausibly allege an alternative action that the [fiduciary] could have taken that would have been consistent with [applicable Federal and state securities laws] and that a prudent fiduciary in the same circumstances would not have viewed as more likely to harm the [ESOP] than to help it.”[15]

The Court reasoned that where a complaint alleges imprudence based on an ESOP fiduciary’s failure to act on non-public information, a lower court’s analysis should be guided by three considerations. First, ERISA does not require a fiduciary to violate applicable Federal and state securities laws. In other words, an ESOP fiduciary does not act imprudently by declining to divest the ESOP of employer securities or by prohibiting investments in employer securities on the basis of non-public information. Second, where a complaint faults fiduciaries for failing to decide, on the basis of non-public information, to refrain from making additional investments in employer securities or for failing to disclose non-public information to correct the valuation of the employer securities, lower courts should consider the extent to which the duty of prudence conflicts with complex insider trading and corporate disclosure requirements imposed by Federal securities laws or the objectives of such laws. Third, lower courts should consider whether the complaint has plausibly alleged that a prudent fiduciary could not have concluded that discontinuing investments in employer securities or disclosing adverse, non-public information to the public, or taking any other action suggested by the plaintiff would result in more harm than good to the ESOP by causing a drop in the value of the employer securities.

Quantifying the Unknowns

Fifth Third Bancorp v. Dudenhoeffer will undoubtedly reshape the landscape of ERISA litigation and, specifically, stock drop litigation. To fully understand the decision’s impact, a number of questions must still be answered, including the correct application of the standards espoused by the Court. In addition, Dudenhoeffer involved a publicly-traded company; it is unclear what application, if any, the decision will have in the context of employer securities of a privately held company.

Article By:

Christopher T. Horner
Eric W. Gregory
 
Of: 
Dickinson Wright PLLC

 

[1] See generally, ERISA § 404(a).

[2] ERISA § 404(a)(1)(B).

[3] ERISA § 404(a)(1)(C).

[4] Code § 4975(e)(7)(A).

[5] ERISA § 404(a)(2).

[6] See e.g. Moench v. Robertson, 62 F.3d 553, 571 (3d Cir. 1995); In re Citigroup ERISA Litig., 662 F.3d 128, 138 (2d Cir. 2011); Kirschbaum v. Reliant Energy, Inc., 526 F.3d 243, 254 (5th Cir. 2008); Kuper v. Iovenko, 66 F.3d 1447 (6th Cir. 1995); White v. Marshall & Ilsley Corp., Case No. 11-2660, 2013 WL 1688918 (7th Cir. Apr. 19, 2013); Quan v. Computer Sciences Corp., 623 F.3d 870, 881 (9th Cir. 2010);Lanfear v. Home Depot, Inc., 679 F.3d 1267 (11th Cir. 2012).

[7] No. 12-751, 573 U.S. ____ at 1-2.

[8] Id.

[9] Dudenhoeffer v. Fifth Third Bancorp, Inc., 757 F. Supp. 2d 753, 759 (S.D. Ohio 2010).

[10] Id. At 762.

[11] Dudenhoeffer v. Fifth Third Bancorp, 692 F. 3d 410, 418-19 (2012).

[12] Id. At 423.

[13] Fifth Third Bancorp v. Dudenhoeffer, No. 12-751, 573 U.S. ___ at 1-2.

[14] Id. At 16.

[15] Id. At 18.

Unpaid Employer Contributions as Plan Assets: Expansion Of Liability Under ERISA (Employee Retirement Income Security Act)

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The Employee Retirement Income Security Act of 1974, as amended (“ERISA”), requires trustees of multiemployer pension and benefit funds to collect contributions required to be made by contributing employers under their collective bargaining agreements (“CBAs”) with the labor union sponsoring the plans. This is not always an easy task—often, an employer is an incorporated entity with limited assets or financial resources to satisfy its contractual obligations. In some instances, an employer will resort to filing for bankruptcy to obtain a discharge of its debts to the pension or benefit funds.

In a distinct trend, federal courts have found that, depending on the text of the underlying plan documents, unpaid employer contributions due under a CBA may be viewed as plan assets, such that the representatives of an employer who exercise fiduciary control over those plan assets can be held individually liable for the unpaid amounts (together with interest and penalties) under ERISA. These cases will no doubt help plan trustees and administrators collect monies owed to the plan. They also should serve as cautionary warnings to contributing employers to ensure that they fully understand the obligations that they are undertaking when they agree to contribute to ERISA funds pursuant to CBAs.

Background

In the typical scenario, an employer will agree under one or more of its CBAs to make specified contributions to fund the pension and health and welfare benefits promised to plan participants under the trust fund’s plan of benefits. If an employer fails to timely remit those payments in violation of the CBA and the plan’s rules, the trustees of the fund have a legal duty to attempt to recover the unpaid contributions unless, after fully examining the facts and circumstances, the trustees conclude that the likelihood of recovery is outweighed by its costs. What happens if the trustees expend the fund’s resources to seek to collect the unpaid obligations and obtain a judgment against the employer, only to find the company’s coffers empty? Or what if the company files for bankruptcy?

Unlike employee contributions, which under U.S. Department of Labor regulations are explicitly deemed to be plan assets, employer contributions are typically found to be contractual obligations that do not become plan assets until such amounts are paid by the employer to the trust fund. Hence, while an employer’s failure to remit an employee contribution relegates the employer to the status of an ERISA plan fiduciary because it is has authority and control over plan assets, employer contributions have generally been held not to constitute plan assets. As a result, an employer who fails to make its contributions due under the CBA may have committed a contractual violation but has not breached an ERISA fiduciary duty.

The Potential for Individual Fiduciary Liability

Recently, courts have regularly carved out an exception to the general rule that unpaid contributions are not plan assets by finding that employer contributions are plan assets where the CBA explicitly defines them as such. In such cases, these courts will then proceed to consider the next question of whether the officers, directors or other representatives of such employer exercised a level of control over corporate assets sufficient to make them an ERISA plan fiduciary and thus individually liable for the contributions—effectively stripping them of the protections of the corporate form. Furthermore, if elevated to the status of a fiduciary breach, the debt may not be dischargeable in a bankruptcy proceeding. Thus, the plan could proceed to collect the unpaid contributions against the principals of the debtor personally.

For over a decade, some federal district courts in the Second Circuit have applied a two-part test in delinquent employer contribution cases to find that: (i) such contributions are plan assets when so specified by the CBA; and (ii) the principals of the employer are an ERISA plan fiduciary. More recently, the Second Circuit concluded that delinquent contributions were not plan assets where there were no provisions in the relevant plan documents that stated that unpaid contributions are assets of the plan. See In re Halpin, 566 F.3d 286 (2d Cir. 2009). The Court expressly stated, however, that “the trustees were free to contractually provide for some other result.” It further noted that merely finding that delinquent contributions constitute plan assets does not end the inquiry. A court must also determine whether an individual defendant has exercised sufficient fiduciary conduct over the unpaid contributions to be found to be a plan fiduciary under ERISA.

While the Court’s statements were extraneous to the holding of the case, some district courts within the Second Circuit have seized upon this language and have cited In re Halpin for the proposition that employer contributions can be plan assets where the plan documents so provide. See, e.g., Trustees of Sheet Metalworkers Int’l Assoc. v. Hopwood, 09-cv-5088, 2012 WL 4462048 (S.D.N.Y. Sept. 27, 2012); Sullivan v. Marble Unique Corp., 10-cv-3582, 2011 WL 5401987, at *27 (E.D.N.Y. Aug. 30, 2011).

Similarly, the Eleventh Circuit, in ITPE Pension Fund v. Hall, 334 F.3d 1011 (11th Cir. 2003), held that delinquent contributions can constitute plan assets when explicitly provided for in the plan documents and corporate officers are plan fiduciaries with respect to those assets. The Court demanded a high level of clarity in the plan documents, however, regarding the delinquent contribution’s status as plan assets. It explained that when a corporation is delinquent in its contributions, the fund “has a sufficient priority on the corporation’s available resources that individuals controlling corporate resources are controlling fund assets. This in effect places heavy responsibilities on employers, but only to the extent that . . . an employer freely accepts those responsibilities in collective bargaining.”

In addition, district courts in the Third, Fourth, and Ninth Circuits have found that employer contributions constitute plan assets when the plan documents so provide. See, e.g., Trustees of Construction Industry and Laborers Health & Welfare Trust v. Archie, No. 2:12-cv-00225 (D. Nev. Mar. 3, 2014) (holding that unpaid contributions were plan assets based upon the CBA’s language and finding that the company principals’ acts and responsibilities demonstrated sufficient control and authority over the company’s operations and financials to qualify as ERISA fiduciaries); Galgay v. Gangloff, 677 F. Supp. 295, 301 (M.D. Penn. 1987) (refusing to dismiss fiduciary breach claims for alleged failure to pay delinquent contributions based upon the “clear and undisputed language [of the agreement] stating that title to all monies ‘due and owing’ the plaintiff fund is ‘vested’ in the fund,” rendering “any delinquent employer contributions vested assets of the plaintiff fund.”; Connors v. Paybra Mining Co., 807 F. Supp. 1242, 1246 (S.D.W.V. 1992) (finding company officers personally liable for delinquent contributions that were plan assets based upon CBA’s language since they breached their fiduciary duty by exercising authority over those assets by favoring other creditors over the fund); see also Secretary of Labor v. Doyle, 675 F.3d 187 (3d Cir. 2012) (holding that district court erred in failing to determine whether payments collected from various employers were plan assets subject to ERISA).

District courts in the Sixth Circuit have even signaled support for finding that contributions are plan assets as soon as they become due, “regardless of the language of the benefit plan.” See, e.g., Plumbers Local 98 Defined Benefit Funds v. M&P Master Plumbers of Michigan, Inc., 608 F. Supp. 2d 873, 879 (E.D. Mich. 2009) (holding company principal personally liable for delinquent contributions since “the CBA and trust agreements . . . treat these unpaid contributions as inalienable plan assets” and signaling support for holding delinquent contributions plan assets “regardless of the language of the benefit plan.”).

In a related context, a federal bankruptcy court recently refused to discharge a debtor’s debt for delinquent contributions based upon the Bankruptcy Code’s “defalcation in the performance of fiduciary duty” exception. See In re Fahey, 494 B.R. 16 (Bankr. D. Mass. 2013). Although the court initially found that the debtor lacked the necessary discretion for fiduciary status under ERISA because the “option to breach a contract does not constitute discretion in the performance of one’s duty,” the United States Bankruptcy Appellate Panel for the First Circuit reversed. The Panel ruled that “even if an ERISA fiduciary does not per se satisfy the § 523(a)(4) requirement for ‘fiduciary capacity,’ an analysis of [the Debtor’s] control and authority over the plan in functional terms nonetheless yields the conclusion that he acted as a fiduciary of a technical trust imposed by common law.” On remand, the bankruptcy court found that the debtor prioritized payments that were personally beneficial over his obligations to the ERISA funds and, consequently, committed defalcation as contemplated by the Bankruptcy Code.

View from Proskauer

Although the general rule that employer contributions do not constitute plan assets until actually received by the trust fund continues, recent decisions indicate an increased willingness by courts to carve out an exception to this rule. Funds looking to protect their ability to collect contributions should explicitly define in the plan documents and agreements with employers that plan assets also include all unpaid contributions in the hands of the employer. Employers should be fully cognizant of these provisions; otherwise its officers, directors and other representatives who choose to pay other creditors rather than the trust fund might be held personally liable for the unpaid amounts and interest and penalties, and possibly be unable to escape this liability through bankruptcy.

Article By:

Neal S Schelberg
Aaron Feuer
Of:
Proskauer Rose LLP.

Do Your Plans Include a Time Limit on a Participant’s Right to Sue?

Poyner Spruill

 

Some, but far from all, employee benefit plans set a limit on the amount of time a participant has to file a lawsuit claiming benefits under the plan.  Until recently, however, not all courts would recognize these plan imposed lawsuit filing deadlines.  The Supreme Court case of Heimeshoff v. Hartford Life, decided in December 2013, changed that by ruling that employee benefit plan contractual provisions that limit the time to file a lawsuit to recover benefits are enforceable, provided the time limitations are not unreasonably short or contrary to a controlling statute.

The Heimeshoff decision involved a plan that provided a participant must file a lawsuit to recover benefits within three years from the date proof of loss was due.  The Supreme Court decision found that the three year limitation period was not too short, noting the plan’s internal claims review process would be concluded in plenty of time for a participant to file a lawsuit to recover benefits. Based on the court’s reasoning, it appears likely that a shorter limitation on filing claims might also be upheld as long as there is sufficient time for the participant to file a lawsuit once the claims procedure period has ended.

While Heimeshoff involved a disability plan, the decision applies equally to all ERISA covered health and welfare plans, retirement plans, and top hat plans.

So, do your employee benefit plans include a limitation on the time a participant has to file a lawsuit to recover benefits?  Don’t assume that they do.  Many plans do not provide a time limit for filing a lawsuit, and now would be a great time to amend those plans to add the limitation.

Article by:

Of:

Poyner Spruill LLP

Supreme Court Affirms Contractually Reduced Limitations Periods for Employee Retirement Income Security Act (ERISA) Benefit Claims Date

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A contractual limitations period in an ERISA disability benefits plan that required participants to bring suit within three years after “proof of loss is due” is enforceable, theU.S. Supreme Court has ruled unanimously. Heimeshoff v. Hartford Life & Accident Ins. Co. et al., 134 S.Ct. 604, 187 L. Ed. 2d 529 (2013).

Whether and under what circumstances an otherwise applicable statute of limitations can be contractually shortened where a claim for benefits is made under a plan subject to the Employee Retirement Income Security Act of 1974 has divided the courts of appeals for years. A participant in an employee benefit plan covered by ERISA may bring a civil action under §502(a)(1)(B) to recover benefits. Courts have generally required participants to exhaust the plan’s administrative remedies before filing these suits. ERISA, however, does not specify a statute of limitations for filing such a suit.

Heimeshoff is significant for three reasons. First, implicit in the Court’s decision is the recognition that “reasonable” contractual limitations periods are generally enforceable for ERISA claims. According to the Court, “in the absence of a controlling statute to the contrary, a provision in a contract may validly limit, between the parties, the time for bringing an action on such contract to a period less than that prescribed in the general statute of limitations, provided that the shorter period itself shall be a reasonable period” (quoting Order of United Commercial Travelers of America v. Wolfe, 331 U.S. 586, 608 (1947)).

Second, the decision also appears to assume, if not specifically hold, that contractual limitations periods for insured ERISA plans (at least where the limitations period is in the insurance policy) are subject to state laws that expressly prohibit contractual limitations periods shorter than a defined period (as opposed to state laws that merely set a default minimum statute of limitations that applies only in the absence of a contractual limitations period).

Finally, the decision overturns the law in certain circuits holding a contractual limitations period cannot begin to run until available administrative remedies have been exhausted. Heimeshoff should not have any application to claims of breach of fiduciary duty under ERISA; it is limited to ERISA benefits claim matters. It is certainly possible that the limitations Heimeshoff applies will have the effect of increasing ERISA fiduciary claims actions, although the federal courts are wary of benefits claim cases denominated as ERISA fiduciary breach matters.

The Court, referring to state insurance statutes, pointed out that “the vast majority of States require certain insurance policies to include 3-year limitations periods that run from the date proof of loss is due.” On the theory that federal law determines when an ERISA cause of action accrues, some circuits previously held the time for bringing the action does not begin to run until the administrative review process has been completed. In Heimeshoff, the Supreme Court held that such a hard and fast rule is inappropriate. Absent unreasonable limitations barring a participant’s ability to assert a claim, it said, the terms of the written plan are paramount and should be enforced. The new rule is more fact-specific. The contractual limitations period, including its commencement date as specified in the policy, should be enforced unless the claimant is left with an unreasonably short period to file suit after the administrative review process ends. The Court recognized that starting the limitations period at the point “proof of loss is due,” which necessarily is before the completion of the administrative review process, “will, in practice, shorten the contractual limitations period.” But the Court nevertheless held that such a requirement is enforceable, provided the claimant is left with a “reasonable” period of time to file suit.

The Court did not indicate what remaining period of time might be unreasonable. Because the plaintiff in Heimeshoff had about one year left to file a complaint following the completion of the review of her claim, 12 months presumably is not “too short” in the run of cases. Relying upon Heimeshoff, a federal District Court in New Jersey dismissed an ERISA benefits claim as untimely, finding a nine-month residual period for filing suit after exhaustion of administrative remedies provided the plaintiff with “ample opportunity to seek judicial review.” Barriero v. NJ BAC Health Fund, 2013 U.S. Dist. LEXIS 181277 at *12-*13 (D.N.J. Dec. 27, 2013).

In Heimeshoff, the Supreme Court recognized that the district courts retain the discretion to use appropriate traditional doctrines to free claimants from a contractual limitations provision “in the rare cases where internal review prevents participants from bringing §502(a)(1)(B) actions within the contractual period.” The Court observed, “[i]f the administrator’s conduct causes a participant to miss the deadline for judicial review, waiver or estoppel may prevent the administrator from invoking the limitations provision as a defense.” The Court also suggested that the doctrine of “equitable tolling” may apply “[t]o the extent the participant has diligently pursued both internal review and judicial review but was prevented from filing suit by extraordinary circumstances.” (Emphasis added.) These cases often include allegations of fraud and other extraordinary facts and are likely to define the limits of Heimeshoff.

Article by:

Of:

Jackson Lewis P.C.