Tag Archives: appeal

Fair Labor Standard Act and Individual Liability

In Torres et al. v. Gristedes Operating Corp. et al., Case No. 11-4035 (July 9, 2013), the Second Circuit Court of Appeals held that a mayoral candidate, a supermarket owner, and an executive can be individually liable for settlement payments arising of a Fair Labor Standard Act class action.

In this case, the parties settled the class action.  A class action is a discrimination case brought by a few plaintiffs on behalf of many employees.  All of the members who agreed to be part of the class (the individuals who were discriminated against) receive their part of the settlement.  In order for a fair disbursement, the Judge must adopt the settlement.

Under the settlement, the defendants agreed to pay $3.5 million to the class.  However, the defendants defaulted on the payments.  The judge’s order allowed the class to enforce the settlement.  Defendants, who sought to change the settlement, stated that they were not bound by the settlement because they were not “employers.”

The Second Circuit Court of Appeals disagreed.  The Court noted that the defendants exercised “operational control” that affected the class’ employment.  For example, based of their decisions, the employees’ wages were affected.  Because defendants were employers, defendants were bound by the settlement.  Based on this decision, defendants now have to pay the owed money.

via Labor Employment Law Blog: Second Circuit Imposes Individual Liability on New York Mayoral Candidate for Fair Labor Standards Act Settlement.

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Filed under civil rights, discrimination, District Court, employment, federal, legal decision, wage

ERISA: Appeal must be clear

In Reindl v. Hartford Life and Accident Insurance Co., –F.3d __, 2013 WL 425356 ( 8th Cir. February 5, 2013), the 8th Circuit clearly stated that when appealing an ERISA decision – the appeal must be clear.  In this case, the question was: Can a mere request for medical records, and a reference to an “appeal in the future tense,” trigger the appeal?  The 8th Circuit held no.

Here, the participant sought and obtained disability benefits.  Hartford later reassessed the claim of the participant and discontinued the benefits.  On November 25, 2008, Hartford sent a letter informing the participant that she had 180 days to file an administrative appeal.

On December 12, 2008, the participant’s lawyer sent a letter requesting medical records and stating, “We will be reviewing the records and obtaining additional medical information for my client’s appeal of the decision to terminate [benefits].” (emphasis added).

On July 8, 2009 the participant’s attorney expressed disagreement with the benefits termination decision and stated: “I would appreciate your reversal of the decision to terminate [Reindl’s benefit claim].”

The trial court held that the participant failed to file a timely appeal.  The 8th Circuit affirmed.  The 8th Circuit court reasoned that the December letter merely requested medical records.  The reference to a future appeal was not an actual appeal.

via 8th Circuit – Expressing Intent to Appeal in the Future Does Not Constitute an “Appeal.” | Boom: The ERISA Law Blog.

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Filed under ERISA, legal decision

ERISA – changing the reason for denial not allowed

I came across this interesting ERISA cases.  In both cases, the court held that the claims administrator could just not change the reason for denying the benefits.

In both of these cases, the courts ultimately held that the record and the basis for denying benefits were effectively frozen and could not be changed at a later time.

In Rossi v. Precision Drilling Oilfield Servs. Corp. Employee Benefits Plan, 11-50861 (5th Cir. 2013), the Fifth Circuit Court of Appeals held that the claims administrator was not allowed to change the basis for a denial of benefits during the internal appeal.

Initially, the claims administrator denied the benefits because Rossi was not receiving sufficient medical care to be incurring medical expenses.  During the administrative appeal, however, the claims administrator changed his rationale.  The claims administrator denied the benefits because the plan had an exclusion for inpatient care.  The 5th Circuit Court of Appeals reversed summary judgment and remanded the case.

In Sun Life Health Ins., SACV 11-01516, the District Court for the Central District of California held that the claims administrator was not allowed to deny benefits based on factual investigation during the litigation.

In this case, Sun Life granted short-term disability benefits, but denied the plaintiff long-term disability (LTD) benefits.  Sun Life denied the LTD benefits because plaintiff had failed to satisfy the 180 elimination period, and because plaintiff was not employed at the time the medical evidence supported the disability.

During the litigation, Sun Life identified other facts to support its allegation that the claims should be denied.  As a side note, none of the facts raised during the litigation (which never came up during the investigation or appeal) were reviewed by any doctors.

  • First, Sun Life stated that the denial was supported by the fact that plaintiff “did not seek or receive any treatment” prior to the mental-breakdown event.  Sun Life explained that the treatment that plaintiff received after the mental-breakdown event was not his choice.
  • Second, Sun Life stated that plaintiff was unlikely to be disabled because prior to the mental-breakdown, he had gone on a gambling spree.
  • Third, Sun Life stated that after the mental-breakdown but before the hospitalization of plaintiff, plaintiff “appeared to have lived with his family…without incident.”

The district court did two things.  First, it stated that those rationales were inapplicable because they were not raised before and never reviewed by medical professionals.  Second, the court went through the factual rationales and explained why they were unsupported based on the facts.

 

via Don’t Look Back, Something Might Be Gaining On You: Whether a Plan Administrator Can Raise New Bases For Denying a Claim Beyond Those Raised in the Initial Denial of Benefits : Boston ERISA Law Blog.

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Wal-Mart Class Action: class not narrowed

I bring to you this legal decision in a sex discrimination class action against Wal-Mart because it provides an example of a class that was not narrowed by the Court.  This is the Dukes case that went up to the Supreme Court to discuss the issue of commonality.  This decision can be found here.

In a 2001 federal complaint led by Betty Dukes, a putative class claimed that Wal-Mart Stores received paid women less and offered them fewer promotions than it offered men in comparable positions.

Though a San Francisco federal judge initially certified a class that would cover estimated 1.5 million women, making it the largest civil rights case in U.S. history, the Supreme Court disbanded that class in 2011 on the basis of lacking commonality. On remand, the plaintiffs filed a fourth amended complaint that seeks to certify a narrower class than that rejected by the high court.

The Bentonville, Ark.-based company responded with a motion to strike the class allegations. It claims that the statute of limitations bars the claims, and that the newly proposed class still fails to meet the commonality requirement.

Denying that motion, the Northern District of California set a deadline of Jan. 11, 2013, for the class-certification motion.  Undeterred, Wal-Mart sought leave to file an interim appeal with the 9th Circuit.

Wal-Mart argued that the Dukes Supreme Court decision should be interpreted as a total rejection of plaintiffs’ theories.  The District Court disagreed.  The District Court held that the Dukes Supreme Court decision rested on plaintiffs’ “inadequacy of their proof.”

The District Court explained:

The Supreme Court’s decision foreclosed claims that delegated discretion -alone- is sufficient to state a common question for purposes of Rule 23.  It does not follow that any time a plaintiff alleges that a company has a policy involving some amount of delegated discretion, the plaintiff is precluded from showing a classwide pattern or practice of discrimination or a common mode of exercising delegate discretion susceptible to classwide relief.  That is why the Supreme Court reached the question whether the plaintiffs had evidence on those points sufficient to establish a common question under Rule 23.

In his conclusion, Judge Breyer denied the interlocutory appeal “on the grounds that (1) immediate appeal would not, at this time, materially advance the ultimate termination of the litigation in light of the impending certification motion, and (2) no substantial grounds for difference of opinion exist regarding the commonality issue.”

via Courthouse News Service.

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Filed under Appellate, courts, employment, legal decision, Supreme Court, wage

DC upholds challenge to Health Care Rule

In San Miguel Hosp. Corp. v. NLRB, ___F.3d___ D.C. Cir. 11/02/12, The DC Court of Appeals affirmed the NLRB’s decision to certify the Union as the sole representative of a unit that comprised professionals and non-professional employees.

The Hospital raised two main arguments.

  1. The Hospital argued that the Health Care Rule violated Section 9 of the NLRA because it endorses the extent of a union’s organization as the controlling factor in unit determination.
  2. The Hospital also argued that unit certification is improper when the unit comprises professional and non-professional employees.

The Court responded to these arguments as follows.

  1. The Court held the argument to have “zero merit.”  First, the Court explained, the administrative record makes “quite clear that the factors the Board considered in deciding upon the eight listed units included ‘uniqueness of function; training, education and licensing; wages, hours and working conditions; supervision; employee interaction; and factors relating to the collective bargaining agreement.'”  Second, the Court stated that the NLRA only requires that the extent of organization not be the controlling factor.  Therefore, the “consideration of that factor among others is entirely lawful.”
  2. Regarding the second Hospital’s argument, the Court highlighted the fact that the Hospital never challenged this issue.  The Court also stated that there is no precedent, in the NLRB or Courts, that addressed this specific issue.  As a consequence, the Court concluded that no remand was necessary since the Hospital waived any subsequent challenge.

In plain words, the DC Circuit Court of Appeals reaffirmed two main conclusions, supported by precedent.

First, that if you don’t raise a challenge below — you cannot raise a challenge in appeal.

Second, that the NLRA Section 9(c) provides that the NLRB can use the extent of the organization as a factor, as long as it is not controlling.  Since the NLRB used a plethora of factors, it was clear that it did not decide the issue solely on the extent of union organization.

What we can learn from this case is simple.  Raise all challenges in the court below to make sure you preserve these challenges in an appeal.

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Filed under Appellate, courts, labor, legal decision, NLRB, union