A federal court in Pennsylvania recently certified a class of Plaintiffs under Defendant Aetna Life Insurance Co.’s disability benefits plan (“Plan”). The Plaintiffs alleged that the Defendants forced beneficiaries who had received payments for personal injury claims to send the payments back to the company in violation of ERISA.

The named Plaintiff, Joanne Wolff, first filed suit against Aetna in 2019 when the company asked for the repayment of over $50,000 in long-term disability benefits stemming from a temporary disability suffered by the Plaintiff after a car wreck. At the time of the request, Wolff told the Defendants that her employer, Bank of America, did not allow reimbursement, and negotiations ended in an agreement that that Wolff would pay $30,000 despite this fact.

This did not end the dispute, however, and Wolff along with an at least 48-member class now allege that Aetna violated ERISA when it required reimbursement payments of long-term personal injury disability payments. Aetna responded that class certification would be inappropriate, as the proposed class did not meet the specifications required for certification under the Federal Rules of Civil Procedure. Mainly, the Defendants argued that some of the members of the proposed class should be disqualified, thus the number of participants in the class did not meet the numerosity requirement. It argued that since some of the members of the class were from different companies, there was not sufficient typicality to fulfill the requirements under the Civil Rules and members under other employers should be disqualified, reducing the class number to 28. Aetna also argued that timing issues barred several more participants under the relevant statutes of limitations.

The Court disagreed, stating that the class size both exceeded the minimum number of members and that the benefit plans of each member were substantially similar, thus making certification appropriate under the Civil Rules. It was decided that the plans at issue contained similar enough language that the fact that the beneficiaries worked for different companies was irrelevant. Judge Matthew W. Brann stated, “Because Wolff meets all three concerns implicated by typicality, the court finds she had satisfied this requirement.” Regarding the argument that certain members were barred under statutes of limitations, the Court stated that this number was so few that it would not impact the ability for the class to be appropriately certified under the Civil Rules.

Therefore, Wolff and the class of members is permitted to move forward in federal court as all requirements have been satisfied. This decision is a victory not only for members of the class, but for participants in disability plans governed by ERISA. ERISA requires that plan administrators fulfill various fiduciary duties to their participants; when these duties are violated it is often done on a large scale and impacts participants across not only the specific company but under similar plans as well. This decision shows the importance of policy language and similarity between plans, creating the standard that when companies breach their duties to participants, an action may be brought under similar policy language rather than under the same employer. This provides the opportunity for recourse under ERISA to a wider range of plan participants, ensuring the fulfillment of benefits and accountability from administrators.

Recently, the Boston Children’s Hospital asked a judge in federal court to dismiss a case brought by former employees that alleged the charging of “exorbitant” fees relating to the management of ERISA retirement plans. The Hospital argues that fees associated with the plans were not exorbitant and no damage was sustained by plan members under the class, thus the case against them should be dismissed. The Hospital additionally argues that there was no requirement for them to pick the lowest possible costs for administration of their ERISA plans. Further, they argue that the plaintiffs in the class at issue were not deeply invested in the plans that are involved.

The Plaintiffs (former employees of the Hospital) in the class allege that the Hospital’s fiduciary duties under ERISA were breached when they overcharged participants for fees relating to recordkeeping. Further, the Plaintiffs allege that the Hospital encouraged participants to invest in funds that were more expensive than others and underperformed compared to their counterparts. The case was originally brought by four former employees of the Hospital, with the class now encompassing compensation for 18,580 employees. The Plaintiffs state that while participants in similar plans were required to pay between $23 to $42 per year in recordkeeping fees, participants in the Hospital’s plans at issue paid $73. The large size of the plan, according to the Plaintiffs, would have enabled them to negotiate for lower fees if the Hospital had been proactive about ensuring the performance of their duties to the participants.

The Hospital counters in their motion to dismiss that, “ERISA does not require Children’s to select the least expensive or best performing investment, and Plaintiff’s cannot plausibly allege a breach merely by pointing to alternative target date funds that have some similarities and that purportedly cost a bit less or performed a bit better.” Further, the Hospital alleges that the Plaintiffs are essentially attempting to make arguments that are directly opposed, stating that there are no comparable plans that are both less expensive and perform better than that those at issue in the case. Regarding the plans exemplified by the Plaintiffs as less expensive, the Hospital states that the cheaper plans did not perform as well as those chosen by the Defendant. The plans argued by the Plaintiffs to be comparable also had different payment structures and provided different services to participants, according to the Hospital.

The Defendant states that even if the allegations against their management of the plan were accurate, the Plaintiffs in the case have no cause of action for plans in which they did not specifically invest. The Hospital argues that this results in the named Plaintiffs having no claim for relief, therefore the suit should be dismissed.

Lastly, the Hospital argues that the amount of recordkeeping fees alleged in the case relate to 2020 prices, when none of the named Plaintiffs were involved in payment of plan fees.

The question is now posed to the Court of whether the arguments brought by the Defendant should result in dismissal of the case. Courts have recently held that classes of plaintiffs in similar situations are entitled to certification and a chance to litigate their claims. The facts of this case regarding the level of participation the Plaintiffs actually engaged in by paying excess fees may change this result. However, courts have made it apparent that when plaintiffs have paid excess fees under ERISA plans, they are entitled to appropriate legal recourse.