[firm] blog logo

U.S. Supreme Court Denies Cert in Sun Capital Appeal; Leaves Door Open for Private Equity Fund Liability for Portfolio Company Pension Liabilities

In the latest development in the Sun Capital line of cases, on October 5, 2020, the U.S. Supreme Court denied certiorari review of New England Teamsters & Trucking Industry Pension Fund v. Sun Capital Partners. The Sun Capital cases center around the issue of whether affiliated private equity funds, Sun Capital Partners III and Sun Capital Partners IV (collectively, the ?Ç£Funds?Ç¥), can be held liable for the pension fund withdrawal liability of a portfolio company, Scott Brass Inc. (?Ç£SBI?Ç¥), which went into bankruptcy while owned by the Funds. In 2013, the First Circuit held that multiple private equity funds could be jointly and severally liable under ERISA for the withdrawal liability of a portfolio company if such funds were (i) a trade or business and (ii) in the company?ÇÖs controlled group (see our prior blog post on that court decision here). On remand by the First Circuit in 2016, the… Continue Reading

Fifth Circuit Defers to Plan Administrator?ÇÖs Claim Appeal Decision Involving Competing Medical Opinions

In Rittinger v. Health Alliance Life Insurance Company, the U.S. Court of Appeals for the Fifth Circuit, whose jurisdiction includes Texas, analyzed the claims decision-making process of a group health plan administrator that had been granted discretion under the terms of the employer?ÇÖs group health plan. The court determined that, based on such grant of discretion, the plan administrator?ÇÖs decision regarding a participant?ÇÖs benefits claim appeal was entitled to judicial deference, even with respect to the plan administrator?ÇÖs selection of competing medical providers?ÇÖ opinions. Background regarding Grant of Discretion under ERISA Under general standards, a court will consider denials of appealed benefits claims under an employer-sponsored employee benefit plan (including a group health plan) that is subject to ERISA on a ?Ç£de novo?Ç¥ basis, which means that the court will not give any deference to the plan administrator?ÇÖs prior decision on a benefit claim appeal, but instead can substitute its… Continue Reading

Court Finds Plan Language Does Not Require a Second Level Appeal

In this case, the summary plan description (?Ç£SPD?Ç¥) described a participant?ÇÖs ability to submit a second level appeal for a denied benefits claim under an employer-sponsored group health plan subject to ERISA and stated that failure to submit such an appeal would constitute a waiver of the participant?ÇÖs right to review the decision. In addition, the denial letter received by the participant stated that she had a right to request a second level appeal. However, the court found neither the plan document, SPD, or denial letter obligated the participant to file a second level appeal before filing a lawsuit, thus resulting in the court?ÇÖs denial of the defendant?ÇÖs motion for summary judgment for failure to exhaust the plan?ÇÖs administrative remedies. This case highlights the importance of reviewing plan and related documents to ensure they expressly state that submitting a second level appeal is required before a lawsuit over a denied… Continue Reading

October 2021
S M T W T F S
 12
3456789
10111213141516
17181920212223
24252627282930
31  

Archives