Case Studies

Epstein Becker Green Obtains Dismissal of ERISA Action Against Health Care Benefits Companies

On March 13, 2012, Epstein Becker Green obtained the dismissal of an action brought by a chiropractic practice group against Aetna Inc. and certain subsidiaries alleging that the defendants breached fiduciary duties imposed by ERISA and tortiously interfered with the practice's patients by not paying for chiropractic treatment they claimed was covered by their patients' employee health benefit plans. Chief Judge Carol Amon of the U.S. District Court in Brooklyn held that although pleaded as such, the breach of fiduciary duty claims were in actuality claims for benefits, and that such claims could be brought only against the benefit plans themselves or the named plan administrator. Since none of the defendants was a plan administrator, but merely rendered "third-party administrator" or claims processing services, they could not be sued under ERISA.

The court also held that if any of the defendants owed any fiduciary duties arising under ERISA, such duties ran to the plans themselves, and plan participants, such as plaintiffs' patients, could not assert such fiduciary breach claims in order to recover any money to cover their own medical expenses.

Lastly, the court held that the plaintiffs' state law claim for interference with the practice's business necessarily included analyzing the patients' claims for benefits, which in turn would involve interpretation of the terms of the benefit plans, and as a result would require examination of rights and obligations created by ERISA. Accordingly, the court held that ERISA preempted the state law claim and the claim was dismissed.

The EBG team representing the defendants was New York Litigation attorneys Kenneth J. Kelly and Diana C. Gomprecht. Staten Island Chiropractic Assoc., PLLC v. Aetna, Inc., 09-CV-2776(CBA) (E.D.N.Y. 3/12/12).

Epstein Becker Green Achieves Twin Victories in Investment Banking Bonus Arbitrations

Epstein Becker Green obtained awards dismissing the claims of nine investment bankers in two arbitrations for bonuses totaling more than $10 million in January and April 2013. Our client, an investment banking firm, had decided as a result of the 2008 crash to award "provisional" bonuses in December 2008 that were subject to adjustment, depending on the firm's then-undetermined audited year-end financial results. Because the firm lost several billion dollars and had to borrow TARP-like funds from the government to maintain its capital requirements, the directors reduced the provisional awards by 90 percent across the board.

The bankers commenced two arbitrations before FINRA for the unpaid balances, claiming breaches of contract and detrimental reliance, on the basis that their particular business units did not contribute to the firm's loss. The firm defended by arguing that, because the bonuses were discretionary, it could properly place decisive weight on its overall performance. Further, the firm argued that the bankers' reliance argument was undermined by layoffs and hiring freezes globally in the financial services industry—a fact confirmed in the bankers' internal emails.

The two panels independently awarded "zero" to the two groups of bankers and dismissed all of the claims. Kenneth J. Kelly and Diana C. Gomprecht led the Epstein Becker Green defense team in both cases.

Epstein Becker Green Obtains Dismissal of Discrimination Suit Against Charitable Organization

On May 1, 2013, Epstein Becker Green obtained a summary judgment victory in the U.S. District Court for the Southern District of New York on behalf of a client, one of the largest not-for-profit charitable organizations in New York City.  The litigation was brought by the former Chief Financial Officer ("CFO") of the client who alleged that his termination for performance issues was unlawfully motivated by age and gender bias, as well as retaliation for engaging in a protected activity relating to an adverse employment action.  The former CFO filed a charge with the Equal Employment Opportunity Commission, which was dismissed, and subsequently commenced litigation in federal court.  The plaintiff's complaint asserted violations under Title VII of the Civil Rights Act of 1964, the New York State Human Rights Law, the New York Executive Law, and the New York City Human Rights Law.

The District Court dismissed the case in its entirety based upon the undisputed evidence, which demonstrated that the plaintiff was terminated for legitimate non-discriminatory reasons.  In his decision, Judge Vincent Briccetti noted that there was insufficient evidence from which a reasonable jury could infer discrimination. 

Kenneth J. Kelly and Diana Costantino Gomprecht led the Epstein Becker Green defense team in this litigation.  Forbes v. Lighthouse International, 11 CV 7065, 2013 WL 1811960 (S.D.N.Y. May 1, 2013).