The U.S. District Court for the District of Columbia reminds plaintiffs that they may have standing under ERISA for their suit, but they also must have standing to sue under Article III of the U.S. constitution.?á Article III requires plaintiffs to allege a personal stake in the outcome in order to have standing to sue.?á The court followed previous cases which have held that multiemployer plan participants do not have Article III standing to sue plan trustees for breach of fiduciary duty unless the financial viability of the plan is at stake.?á The trustees had failed to collect contributions from the long-delinquent employer, but there was no allegation that those failures adversely affect the plaintiff?ÇÖs benefits under the plan. Although the employees sued on behalf of the Plan, because they could not show that the trustees?ÇÖ failure directly harmed their benefits, there was no injury, and the suit was dismissed… Continue Reading
A former employee sued for denied benefits and breach of fiduciary duty when his employer-provided long-term disability insurance benefits were denied.?á The U.S. Court of Appeals for the Sixth Circuit affirmed the district court?ÇÖs award of the denied benefits.?á The Sixth Circuit also affirmed disgorgement of $3.8 million of the insurer-defendant?ÇÖs profits on the unpaid disability amount.?á The disgorgement was appropriate as ?Ç£equitable relief?Ç¥ for breach of fiduciary duty to prevent defendant?ÇÖs unjust enrichment.?á The $3.8 million was calculated based on defendant?ÇÖs return on average equity, as opposed to returns on investment income, because the defendant held the unpaid benefits in its general account where it could be used for any business purpose, as opposed to a segregated investment account. Rochow v. Life Insurance Co. of North America, No. 12-2074 (6th Cir. Dec. 6, 2013).