18th Annual Workplace Class Action Report - 2022 Edition

362 Annual Workplace Class Action Litigation Report: 2022 Edition fiduciaries’ selection of imprudent investment options "impacted all Plan participants, including herself." Id . at *9. Therefore, the Court determined that Plaintiff demonstrated no loss to her own account. As to Plaintiff’s recordkeeping fees claim, the Court opined that Plaintiff’s allegation was refuted by Defendant’s evidence that fund participants did not pay any recordkeeping fees to Great-West. Accordingly, the Court granted Defendants’ motion to dismiss for lack of standing. Ortiz, et al. v. American Airlines, Inc., 5 F.4th 622 (5th Cir. 2021). Plaintiffs, a group of retirement plan participants, filed a class action alleging that Defendants, American Airlines (“AA”), the American Airlines Pension Asset Administration Committee (“PAAC”), and the American Airlines Federal Credit Union (“FCU”), breached their fiduciary duties under the ERISA. The parties ultimately settled the matter. The District Court declined preliminary settlement approval and subsequently granted Defendants summary judgment. On appeal, the Fifth Circuit affirmed in part, reversed in part, and vacated in part the District Court’s ruling. Plaintiffs asserted that their losses were between $55 million and $88 million, but under the proposed terms of the settlement, Defendants would pay only $8.8 million to the proposed class. The District Court concluded that the evidence presented did not justify the low settlement figure. The matter proceeded through discovery, and the District Court ultimately granted Defendants’ motion for summary judgement. The District Court had determined that Plaintiffs lacked standing as to their claim against AA and the PAAC, because their allegations of better returns if they invested in a different fund were purely speculative. On appeal, the Fifth Circuit found that "lost investment income" was a "concrete" and redressable injury for the purposes of standing, but stated that Plaintiffs lacked standing for a different reason. Id . at 625. The Fifth Circuit determined that Plaintiffs could not establish that they would have in fact invested in a stable value fund to earn the higher returns had AA and the PAAC never offered the fund in which they did invest. The Fifth Circuit found that the District Court erroneously held that Plaintiffs had standing as to their claim against FCU, and reversed that portion of the ruling. The Fifth Circuit reasoned that Plaintiffs failed to establish the element of causation necessary for the claim to survive. Finally, the Fifth Circuit rejected Plaintiffs suggestion that the District Court abused its discretion by ultimately granting summary judgment in favor of Defendants after initially concluding during the settlement phase that Plaintiffs’ claims would likely succeed. Id . at 631. The Fifth Circuit determined that Plaintiffs provided no evidence to the District Court to answer its concerns regarding the $46.2 million to $79.2 million gap between the settlement amount and Plaintiffs’ alleged losses. The Fifth Circuit therefore held that the District Court did not abuse its discretion in denying preliminary settlement approval. Accordingly, the Fifth Circuit affirmed in part, reversed in part, and vacated the District Court’s ruling. Smith, et al. v. Health Care Services Corp., 2021 U.S. Dist. LEXIS 47997 (N.D. Ill. March 15, 2021). Plaintiff, a beneficiary of Defendant’s employer-sponsored health insurance plan (“the Plan”), filed a class action on behalf of his minor daughter Jane, who was denied treatment for behavior health issues. Plaintiff asserted that the denial of coverage for Jane’s treatment was the result of improperly narrow residential treatment guidelines in violation of the ERISA. Defendant filed a motion to dismiss, which the Court granted. The Plan covered treatment for sickness, injury, and "behavioral health" conditions, but only among "essential conditions," if the services for which coverage was sought were "medically necessary." Id . at *3. Defendant utilized standard approval guidelines, including a sub-set of guidelines for residential treatment services ("the RTC Guidelines"). Plaintiffs contended that the RTC Guidelines were much more restrictive than guidelines established within the medical community, thereby leading to over-denials of coverage. Defendant argued that Plaintiff failed to allege the elements of Article III standing. The Court agreed with Defendant’s position. First, the Court found that Plaintiff failed allege that she was entitled to the benefits under the Plan that she did not receive. The Court noted that Plaintiff sought injunctive relief to prevent Defendant from applying the RTC Guidelines to future coverage requests and to compel it to reprocess her previously denied coverage request using appropriate guidelines. The Court reasoned that even assuming that Defendant improperly denied the coverage request, such "past exposure to illegal conduct" would not confer standing upon Plaintiff to seek prospective forms of relief absent "a real and immediate threat of repeated injury." Id . at *12. The Court explained that in order to pursue injunctive or declaratory relief from Defendant’s future use of the RTC Guidelines, Plaintiff must allege that Jane was likely to be injured by the same policy in the future. The Court found that Plaintiff failed to establish that there was any likelihood that Jane would seek residential treatment again in the future. The Court also concluded that any injury inflicted by a past denial of benefits for residential treatment would be remedied