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Employee Benefits News examines legal developments that impact the employee benefits and executive compensation employers provide, including federal and state legislation, rules from federal...
General Electric Co. convinced a federal judge in Wisconsin to toss out a lawsuit by retirees challenging the company’s amendment and termination of certain health-care benefits provided to them ( Kauffman v. Gen. Elec. Co. , 2017 BL 204157, E.D. Wis., No. 2:14-cv-01358, 6/15/17 ).
The retirees failed to show that they were sufficiently harmed by General Electric’s fiduciary conduct with respect to the plans, so they lack standing to sue the company for breach of its fiduciary duties under the Employee Retirement Income Security Act, Judge Lynn Adelman held June 15. Granting summary judgment to General Electric, Adelman held that most of the retirees’ alleged injuries didn’t amount to an “injury in fact” and thus were insufficient to grant them standing.
The decision is the latest installment in an action brought by two retirees who are seeking class treatment against General Electric for allegedly misleading them about their post-retirement health benefits. At issue in the case is the language of certain summary plan descriptions issued by General Electric stating that the company “expects and intends” to continue retiree health benefits indefinitely.
Adelman in 2015 dismissed the retirees’ claim that the language in the SPDs obliged General Electric to continue providing benefits absent a compelling reason to reduce or terminate them. In that decision, she concluded that the retirees failed to state a valid claim because the terms of an SPD aren’t enforceable as the terms of a plan itself. However, Adelman allowed the retirees to move forward with their claim that General Electric didn’t provide an accurate SPD and it breached its ERISA fiduciary duties by failing to do so.
In her latest decision, Adelman rejected the retirees’ argument that General Electric deprived them of their rights under ERISA to honest fiduciary oversight and service, and to accurate SPDs. The mere deprivation of a statutory right, divorced from any concrete harm, is insufficient to satisfy the injury-in-fact requirement of standing, Adelman said.
Even if General Electric did deprive retirees of their statutory rights under ERISA, they must do more to show that they suffered a concrete injury, she said.
Despres Schwartz & Geoghegan Ltd represented the retirees. Morgan Lewis & Bockius LLP and Quarles & Brady LLP represented General Electric.
To contact the reporter on this story: Carmen Castro-Pagan in Washington at ccastro-pagan@bna.com
To contact the editor responsible for this story: Jo-el J. Meyer at jmeyer@bna.com
Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.
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