Category: Erisa

Mayer, Brown Rowe & Maw has a wealth of information at this site: Appellate.net. There are some great links to explore here as well as a listing of links to federal court and state supreme court judges biographies which you can access here.

For those who have not done so already, you can access How Appealing’s 20 Questions for Circuit Judge Stanley F. Birch, Jr. of the U.S. Court of Appeals for the Eleventh Circuit here. In response to Howard’s question regarding what makes a good brief, I particularly enjoyed the following comments:

That is a tough question. The truly outstanding briefs are those that succinctly and with straight-forward clarity relate the existing law to their case. Too much time is spent, even in good briefs, reviewing legal principles with which most judges are familiar. I have proposed that each circuit publish a web-site on which the “boilerplate” for each area of law in that circuit is contained and referenced by an identifying number — much like standard jury charges. A committee of judges and/or staff attorneys could maintain the currency of the citations and text. In briefs all of those familiar legal principles could simply be enumerated (and perhaps “jump-cited” for the benefit of law clerks or new judges) thereby reducing the volume of reading and compelling counsel to focus on applying the law to the circumstances in the case before us. I have waded through pages chronicling the shifting burdens in an employment discrimination case only to be presented with a couple of paragraphs relating all of that law to the facts in the case on appeal.

The suggestion for circuit “boilerplate” is a great one, in my opinion. It would not only help judges, but also the lawyers who write these briefs and the clients who pay their bills.

Law.com reports: “Becker Calls on Congress, Justices to Fix ERISA.” According to the article, 3rd Circuit Court Judge Edward Becker, “in his opening paragraph of a lengthy and powerfully worded concurring opinion” in DiFelice v. Aetna, states that he wants to add his voice “to the rising judicial chorus urging that Congress and the Supreme Court revisit what is an unjust and increasingly tangled ERISA regime.” The opinion is artfully written and a must-read for anyone interested in ERISA preemption.

Continue reading for the facts of the case as well as key portions from the opinion, including the answer to this question: “What is a Serbonian blog?” Judge Becker used the term in his opinion.

UPDATE: By the way, at the end of the opinion, Judge Becker writes:

The Clerk of Court is directed to send a copy of this opinion (with attention directed to the concurrence) to the Solicitor of the Department of Labor; the Chair, Ranking Member, Chief Majority Counsel, and Minority Counsel of the Senate Committee on Health, Education, Labor, and Pensions; and the Chair, Ranking Member, Chief Majority Counsel, and Minority Counsel of the House Committee on Education and the Workforce.

(This post should probably be entitled: “3rd Circuit Court Judge Becker has had it with ERISA!”)

“Treasury May Delay Pension Rules: White House Will Wait for Congress To Take Action on Cash-Balance Plans“: the Wall Street Journal reports how “the Treasury Department may be backing off releasing long-awaited regulations on cash-balance pension plans, and will instead wait for Congress to act before it proceeds.” The source of the information was an interview by Tax Analysts with Pam Olson, the assistant secretary for tax policy. (Tax Analysts reported the information on Wednesday.) The article also reports that the Journal confirmed this information with Treasury spokeswoman Tara Bradshaw who said that Ms. Olson had been accurately quoted in the Tax Analysts article, but added that the agency is still “working on the regulations — we’ve been looking at all the [court] rulings and all the comments and are trying to figure out how to proceed.”

Gardner, Carton & Douglas provides this article–“Enron Case Moves Forward: Plan Fiduciaries Should Take Note.” You can read more about the recent Enron case–Tittle v. Enron Corp., 2003 WL 22245394 (S.D. Tex. Sept. 30, 2003)–in many previous posts which you can access here.

Thanks to Broc and Mike, I was able to share with readers last week in this post that the SEC, the Department of Justice and the President’s Corporate Fraud Task Force had jointly concluded that Section 906 of Sarbanes-Oxley does not apply to 8-Ks, 6-Ks and 11-Ks. Broc and Mike share some additional thoughts this week.

Also, the Wall Street Journal had this article on Monday (subscription required): “SEC, Justice Dept. Say Execs Needn’t Certify All Reports.” Quote of Note from the WSJ article: “The staff of the SEC and the Justice Department, in consultation with their representatives on the corporate fraud task force, have concluded that the criminal certification requirements of Sarbanes-Oxley don’t apply to current reports on form 6-K or 8-K, or employee benefit plan reports on form 11-K ,” SEC corporation finance division director Alan Beller said in a telephone interview with Dow Jones Newswires on Friday.

This is a great article by Brown Rudnick Berlack Israels LLP which takes some very complicated laws and regulations and boils them down into a simpler Q & A format: “Group Health Plan Compliance with HIPAA and ERISA: Navigating the Legal and Administrative Maze.”

In a previous post, I noted the fact that plan fiduciaries are inquiring into their ERISA fiduciary duties regarding a 401(k) plan’s offering of mutual funds which have been the subject of allegations by New York Attorney General Elliot Spitzer. The allegations relate to improper “late trading” and “market timing” in mutual fund shares by hedge funds. Gardner Carton & Douglas highlights some of the points to consider in a client alert entitled “How Should Plan Fiduciaries Respond to Current Investigations of Mutual Fund Practices?.”

For those who do not know, a decision to offer or continue to offer a fund in a 401(k) plan as an investment option for participants is a fiduciary act, subject to all of the fiduciary duties and responsibilities under ERISA. The fiduciaries are subject to an ongoing responsibility of monitoring those investment options, and certainly once fiduciaries receive information that casts some doubt on whether or not an investment option continues to be prudent to offer, they must engage in prudent processes and procedures to evaluate that information and determine whether or not the investment option should be replaced. Such processes and procedures should, of course, be well-documented.

But what about the duty to disclose to participants what is going on with these funds if the fiduciaries decide not to eliminate the mutual fund option? The article states that fiduciaries must, of course, respond to any participant inquiries about the mutual funds in question, but goes on to state that “disclosure would generally not be required” absent a change in the investment funds offered. My view would be that the fiduciaries should tread carefully here. Most of the recent class action lawsuits are pivoted around this duty to disclose and most of the courts have held that fiduciaries have a an affirmative duty to disclose material information which might affect a participant’s or beneficiary’s interest in the plan even though the participant or beneficiary does not make an inquiry.

Denise Howell at Bag and Baggage has some great info on the U.S. Supreme Court here and here:

• Note-taking is now permissible.
• The Court now makes available on its website the merits briefs in cases scheduled for oral argument. They do it through a link to the American Bar Association’s Preview.

The Corporate Board Member has this very good article: “What if Your Company’s 401(k)Plan Lays an Egg?” With respect to the Department of Labor’s suit filed against the Enron plan fiduciaries last summer, the article notes:

The lawsuit, filed by the Department of Labor in June, doesn’t just go after the Enron officers in charge of the 401(k) plan and the executives to whom they reported. It also names as defendants Enron’s board of directors, for not properly overseeing the plan. If the Labor Department prevails at trial, each director will be potentially liable for the entire $2.1 billion Enron 401(k) participants lost.

The article emphasizes how boards can’t afford to wait for Congress to act in defining their ERISA fiduciary responsibilities. It goes on to point out that the suit brought by the DOL “charges Enron’s top officers and board, the supposed monitors of the retirement investment plan, with failing to act on public and private information about the company’s financial condition” and that “[m]any would define this as a brand-new boardroom responsibility.” Quote of note: “Says attorney Sherwin Kaplan: “If plaintiffs’ lawyers had stood up a year ago and said that directors were responsible for telling employees that the company stock was not a good investment, they would have been laughed out of court. This suit has made it a credible position to assert.”