Steve Herman's Blog

Plaintiff contracted with Aetna through a Master Services Agreement to provide third-party administrator services for self-funded health benefit plans that the plaintiff, Aramark, maintains. In its role as third-party administrator, Aetna serves as the intermediary between Aramark and health care providers who treat and care for Aramark employees and their family members. Aetna collects a monthly fee and in exchange provides access to its network of providers and adjudicates claims for payment that those providers submit. Aetna is also responsible for handling calls and other correspondence from Plan Participants, creating reports for Aramark, and aiding in the design of Aramark’s Plans.  Aramark filed suit against Aetna alleging that Aetna had engaged in prohibited transactions and otherwise breached its fiduciary duties as a third-party plan administrator. In particular, Aramark alleges that Aetna had approved improper or fraudulent claims for Aetna sub-contractors, provided inadequate subrogation services, made certain post-adjudication claims adjustments to Aramark’s detriment, and commingled Plan funds with Aetna’s.

The defendant moved to stay and compel arbitration. Looking to the MSA – which provided that “any controversy or claim arising out of or relating to this Agreement or the breach, termination, or validity thereof, except for temporary, preliminary, or permanent injunctive relief or any other form of equitable relief, shall be settled by binding arbitration” – the District Court found that: (1) the threshold question of arbitrability had not been delegated to the arbitrator in clear and unmistakable language, and hence was retained by the Court; and (2) the claims at issue were equitable, and, hence, excepted.  And the U.S. Fifth Circuit affirmed.

With respect to the question of whether the relief was equitable, the Fifth Circuit recounted the line of U.S. Supreme Court cases on the issue:  The Supreme Court’s decisions in Mertens, Great-West, and Sereboff explain that ERISA plaintiffs cannot recover money from non-fiduciaries.  But there was uncertainty as to the reach of these holdings. In Amschwand, the Fifth Circuit found that monetary remedies were unavailable against an ERISA fiduciary. But the Supreme Court’s later decision in Amara told us that Amschwand was wrong. The Amara Court discussed what to do with “a suit by a beneficiary against a plan fiduciary (whom ERISA typically treats as a trustee) about the terms of a plan (which ERISA typically treats as a trust).” As the Supreme Court noted, equity courts recognized that an errant trustee could cause distinct harms. Equity courts specifically “possessed the power to provide relief in the form of monetary ‘compensation’ for a loss resulting from a trustee’s breach of duty, or to prevent the trustee’s unjust enrichment.” Different from the restitution remedies at issue in Mertens, Great-West, Sereboff, and Amschwand, “this kind of monetary remedy against a trustee, sometimes called a ‘surcharge,’ was ‘exclusively equitable.’” The Amara Court explained that “the types of remedies the district court entered here fall within the scope of the term ‘appropriate equitable relief’ in § 502(a)(3)” because they resembled equitable surcharge. And it clarified that “the fact that this relief takes the form of a money payment does not remove it from the category of traditionally equitable relief.” Finally, in Montanile, the Supreme Court turned again to issues of money damages against a nonfiduciary under ERISA. As in Great-West, the Court held “that, when a nonfiduciary participant dissipates a whole settlement on nontraceable items, the fiduciary cannot bring a suit to attach the participant’s general assets under § 502(a)(3) because the suit is not one for ‘appropriate equitable relief.’” Montanile also explained that Amara did not overrule Mertens and Great-West, and the Court reiterated that its “interpretation of ‘equitable relief’ in Mertens, Great–West, and Sereboff remains unchanged.” This came as no surprise: Amara, which treated fiduciary defendants, did not overrule Mertens and Great-West because those cases addressed a distinct issue (the remedy against non-fiduciary defendants). The Court in Amara explicitly reiterated that “the fact that the defendant in this case, unlike the defendant in Mertens, is analogous to a trustee makes a critical difference.”

In this case: “Aetna is an ERISA trustee accused of breaching its fiduciary duties. The district court thus found Aramark’s §§ 1132(a)(2) and (3) claims to be equitable under Amara and Gearlds. Following Gearlds, we find Aramark is seeking ‘make-whole relief’ for a ‘violation of a duty imposed upon that fiduciary.’ We therefore hold Aramark’s claims to lie in equity.”

Aramark Services Group Health Plan v. Aetna, No.24-40323, 2025 WL 3676864 (5th Cir. Dec. 18, 2025).

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Plaintiff is a former NFL player who sought disability benefits for his injuries from the NFL Player Retirement Plan, a welfare benefit plan jointly administered by representatives of NFL players and team owners. The Plan awarded plaintiff some benefits based on his injuries, but concluded that he was ineligible for the highest tier of benefits. Cloud eventually sued under ERISA, claiming that the Plan unlawfully denied him the highest category of benefits, and failed to provide a “full and fair” review. The District Court ordered the Plan to pay the benefits sought and awarded roughly $1.2 million in attorney’s fees, as well as $600,000 in conditional fees. On appeal, however, the Fifth Circuit reversed and remanded to the District Court to enter judgment in the Plan’s favor.  Although the NFL Plan’s review board may well have denied Cloud a full and fair review, and Cloud was probably entitled to the highest level of benefits, the Court found that Cloud didn’t immediately appeal his benefits denial, even though he could have, and indeed should have. So even if the Plan did deny Cloud a full and fair review, no amount of additional review can change the fact that Cloud is ineligible for reclassification. See Cloud v. Bert Bell/Pete Rozelle NFL Player Ret. Plan, 95 F.4th 964 (5th Cir. 2024).

Coming back up to the Fifth Circuit on the attorneys’ fee issue, the Court explained that: Numerous federal laws authorize the award of attorney’s fees only to a “prevailing party.” While other federal laws, including ERISA, allow fee awards so long as the court deems it “appropriate” or within its “discretion.”  Even in the latter setting, however, some degree of success is still required before a fee award may be granted. The only question is the quantum of success obtained. Under prevailing party statutes, fees may be awarded only to “those who prevail in full,” while in provisions like the one at issue here, fees are also available to those who “prevail in part.”

Cloud insists that he achieved some degree of success on the merits because the district court found — and the court of appeals essentially agreed — that although the Plan ultimately prevailed on other grounds, it was nevertheless wrong to deprive Cloud of various benefits. But without any relief awarded to Cloud, mere factual findings, however favorable, are nothing more than a purely procedural victory. And that’s insufficient to justify a fee award.

Cloud v. Bert Bell/Pete Rozelle NFL Player Ret. Plan, No.25-10337, 2025 WL 3673303 (5th Cir. Dec. 18, 2025).

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A securities fraud class action was filed over the 2018 merger between McDermott, an upstream offshore development company, and Chicago Bridge & Iron Company, a downstream engineering and construction company. After the merger, CB&I ceased to exist and became a part of the new McDermott entity. CB&I stockholders received 0.82407 shares of McDermott stock in exchange for every one share of CB&I stock they held pre-merger. Pre-existing McDermott stockholders became the owners of about 53% of the new entity and former CB&I stockholders became the owners of about 47%. The merger was pitched as an opportunity for McDermott to diversify its holdings and form a vertically integrated, downstream-upstream company, while offering the struggling CB&I an alternative to bankruptcy. The Lead Plaintiff, NSHEPP, alleged that Defendants made misleading or untrue statements of material fact that caused McDermott’s shares to be inflated at the time of the merger, and that, on the release of subsequent corrective disclosures, McDermott’s stock price fell and resulted in economic damage to NSHEPP and other McDermott stockholders.

The District Court certified a class with two sub-classes and the Court of Appeals affirmed.

“Importantly, when a court analyzes adequacy and determines that a fundamental conflict exists, that conflict is between the class representative and other members of the class it represents — as opposed to conflicts among unnamed class members themselves….  Here, the court did not abuse its discretion when it found a fundamental conflict between purchasers and exchangers. The magistrate judge reasoned that this issue of comparative inflation would only impact exchangers because purchasers do not have any reason to care about the CB&I stock inflation, and NSHEPP’s exchanger role will require it to spend a lot of time briefing and arguing issues related to CB&I inflation that would do little to nothing to vindicate the interests of purchasers. The court reasoned that if half the class are exchangers and half are purchasers, two subclasses would be the best way to resolve the conflict so that a significant part of a merits trial is not focused on an issue of importance to only half the class. Similarly, the court reasoned that certain issues would be only relevant to purchasers, such as post-merger market efficiency and the ‘correctiveness of the last five alleged corrective disclosures,’ which occurred post-merger. The court did not abuse its discretion when it determined, based on the evidence before it, that subclassing was the most appropriate path to resolve the conflict it identified. However, we must also address whether the court abused its discretion in holding that class members who are both purchasers and exchangers can hold claims in both classes. Defendants maintain that the fundamental conflict multiplies if the court allows class members who are both exchangers and purchasers — that is, someone who both held CB&I stock that was converted in the merger, and who also went out on the open market during the Class Period to purchase McDermott stock — to hold claims in both classes. We disagree.

“We shall use an imaginary investor, John Doe. Assume that Doe was both an exchanger and a purchaser. Doe therefore has two interests that he wants adequately represented in this class action: (1) he wants damages in connection with his exchanged shares and, to further that interest, he wants NSHEPP to prove minimal inflation in CB&I stock and maximum inflation in McDermott stock (to maximize the difference and thus his damages); and (2) he wants the purchaser subclass’s lead plaintiff to prove that defendants’ misrepresentations fraudulently inflated McDermott stock price so he can recover the difference between his purchase price and the price it should have been priced at but for the misrepresentations. NSHEPP will adequately represent his exchanger interest — maybe trial proves he has a net negative; maybe it proves he has a net benefit — but, either way, NSHEPP will be protecting his exchanger interest and will fight to maximize his exchanger recovery because NSHEPP itself wants maximum recovery under this theory. The purchaser lead plaintiff will then protect Doe’s purchaser interest by bringing its strongest fraud-on-the-market case — again, because that lead plaintiff itself will be incentivized to maximize its own recovery as a purchaser. We see no logical reason why Doe cannot recover with respect to both of these separate interests — any conflict between purchasers and exchangers from a class-representative standpoint does not to trickle down to unnamed class members seeking only their own personal damages.”

Nova Scotia Health Employees’ Pension Plan v. McDermott International, No.24-20326, 2025 WL 2814735 (5th Cir. Oct. 3, 2025).

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The Arizona Supreme Court agreed to amend Official Comment 8 to Ethical Rule 3.3, making it clear that:

“If a lawyer reasonably believes that evidence has been materially altered or generated with the intent to deceive the court, the lawyer has an obligation to conduct a reasonable inquiry before submitting the evidence to the court. The scope of the inquiry will vary according to the circumstances of each case, but factors to consider may include the probative value of the evidence, the value or importance of the case or issue, the source of the evidence, and what, if any, accessible, reliable, and affordable tools or methods are available to assess the evidence’s authenticity or integrity. If after inquiry the lawyer still does not know that the evidence has been materially altered or generated with intent to deceive, the lawyer retains discretion to submit the evidence to the court.”

 Order, No.R-25-0029 (Ariz. Aug. 28, 2025) (eff. Jan. 1, 2026).

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Almost twenty years ago, I lost Glanton v. AdvancePCS, 465 F.3d 1123 (9th Cir. 2006), in which we were suing the plans’ PBMs as fiduciaries for disgorgement and restoration of plan losses and ill-gotten gains under ERISA Sections 409 and 502(a)(2), and the Court (incorrectly, in my view, for whatever it’s worth) held that there was no Article III standing, even though Congress had expressly vested plan participants and beneficiaries with the statutory standing to sue for losses on behalf of their plans.

When the U.S. Supreme Court appeared to expand Article III standing for participants to sue for plan losses in the 401(k) context a few years later in LaRue v. DeWolff Boberg & Associates, 128 S.Ct. 1020 (2008), I thought that might have signaled a different result.

Fast-forward to last year, in which suits were filed challenging much of the same PBM conduct that we were challenging back in the early 2000s.  Instead of suing the PBMs themselves as alleged ERISA fiduciaries, however, the plan participants sued the formal Plan Trustees for breach of fiduciary duty in selecting and maintaining the services of these PBMs – who enriched themselves with plan assets and/or otherwise caused losses to the plan.

In at least one of these cases, a District Court in New Jersey has taken the Glanton approach, and dismissed at least the plan loss claims for lack of Article III standing.  The Court found that:

“The connection between what plan participants were required to pay in contributions and out-of-pocket costs, and the administrative fees the Plan was required to pay the PBM, is tenuous at best. The Plans vest Defendants with ‘sole discretion’ to set participant contribution rates. Participant contribution amounts may be affected by several factors having nothing to do with prescription drug benefits, such as: group health plan market trends; administrative expenses; non-drug medical costs; the costs of other prescription drugs and categories of drugs; historical cost-sharing levels under the Plan; and other internal or external factors impacting employees. The Plans authorize Defendants to require participants to fund all plan expenses, not just expenses related to their own individual benefits….

“Put simply, it is too speculative that the allegedly excessive fees the Plan paid to its PBM “had any effect at all” on Plaintiffs’ contribution rates and out-of-pocket costs for prescriptions….

“Plaintiffs allege that any reduction in overall healthcare spending — e.g., if Defendants stopped causing the Plans to overspend on prescription drugs by millions of dollars each year — would result in proportionally lower employee contributions in accordance with the established contribution ratio. And, similarly, because Defendants caused the Plans to overspend on prescription drugs, overall healthcare spending increased, and employee contributions in the form of premiums increased in tandem. Plaintiffs’ argument fundamentally misses the point: if Plaintiffs prevailed in this case and received every bit of the relief they request, Defendants could still increase Plan participants’ contribution amounts under the Plans’ terms without any violation of ERISA having occurred. Defendants have the sole discretion to set participant contribution rates. Plaintiffs cannot articulate how this Court could alter the terms of the Plans to expressly require Defendants to reduce or maintain participants’ contribution amounts. Whether removal of the current fiduciaries, appointment of an independent fiduciary, replacement of the Plans’ PBMs, surcharge, restitution, or other remedies, Plaintiffs’ theory of redressability stumbles on the same obstacle — Defendants’ discretion to set participant contribution rates. Simply put, while Plaintiffs’ requested relief could result in lower contribution rates and out-of-pocket costs, there is no guarantee that it would, and pleadings must be something more than an ingenious academic exercise in the conceivable to meet the standing threshold. Accordingly, the Court separately finds that Plaintiffs also lack standing based on the lack of redressability.”

Lewandowski v. Johnson & Johnson, No.24-671, 2025 WL 3296009 (D.N.J. Nov. 26, 2025).

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The plaintiff began experiencing coughing and pain in her hands and feet in December 2015. Seven months later, in July 2016, she was hired to work at the William Carter Company, and bought a long-term disability insurance policy from Reliance Standard. The policy took effect on October 12, 2016.  By January 26, 2017 — about four months after the policy kicked in — the plaintiff could no longer work, and, in insurance-speak, was “totally disabled.” Because that happened within one year of the date that she became insured, the plaintiff was subject to the policy’s Pre-Existing Conditions Limitation, which allowed the insurance company to deny benefits if her disability was “(1) caused by; (2) contributed to by; or (3) resulting from; a Pre-existing Condition,” defined as: “any Sickness or Injury for which the Insured received medical Treatment, consultation, care or services, including diagnostic procedures, or took prescribed drugs or medicines,” during the lookback period of three months immediately prior to the effective date. Both parties agree that the relevant “Sickness” is scleroderma, and that the lookback period ran from July 12, 2016, through October 12, 2016.

During that look-back period, the plaintiff went to the doctor complaining of a wide variety of symptoms. At these appointments, doctors diagnosed her with nearly a dozen ailments: fibromyalgia, borderline lupus erythematosus, and epistaxis, just to name a few. What they did not diagnose was the disease she actually had — scleroderma, a rare autoimmune condition that causes hardening and thickening of the skin and other tissues. No one had suspected this diagnosis before it happened. And no one argues that the failure of diagnosis resulted from malpractice, bad faith, or evasion.  Nevertheless, the plaintiff’s disability was determined to be a “pre-existing” condition, and her benefits were denied.

Applying the six-step review process adopted by the Eleventh Circuit, the court of appeals reversed the plan administrator and district court’s denial of benefits.

One – A lot hinges on for — a word that connotes intent. Applying that meaning to Johnson’s case, we have little difficulty concluding that Reliance Standard’s benefit-denial decision was wrong. No one “intended or even thought” to treat Johnson “for” scleroderma during the lookback period. As then-Judge Alito explained, “it is hard to see how a doctor can provide treatment ‘for’ a condition without knowing what that condition is or that it even exists.” We reach this conclusion without a thumb on the scale in Johnson’s favor. To be sure, part of the federal common law for ERISA is that the rule of contra proferentem requires us to construe any ambiguities against the drafter. But we invoke this interpretive canon only when a term is ambiguous and both sides advance reasonable interpretations that can be fairly made. Because Reliance Standard’s interpretation falls far short, we see no need to resort to contra proferentem to buttress our straightforward conclusion. In short: because scleroderma was not a condition for which Johnson received medical treatment during the lookback period, Reliance Standard was wrong to deny coverage.

Two – Johnson’s policy states that Reliance Standard “has the discretionary authority to interpret the Plan and the insurance policy and to determine eligibility for benefits.”

Three – Even though Reliance Standard’s decision was wrong, because the firm was vested with discretion in reviewing claims, we protect that discretion by evaluating whether reasonable grounds supported its decision. Reliance Standard’s interpretation of the preexisting condition language as applied to Johnson’s claim is unreasonable because it completely elides the distinction between receiving medical care for symptoms not inconsistent with a preexisting condition and receiving medical care for a preexisting condition itself. Reliance Standard agrees that its interpretation of the plan means that any symptom experienced before the ultimate diagnosis would allow the company to deny coverage so long as the symptom was not later deemed inconsistent with that condition. It is no exaggeration to say that under Reliance Standard’s view, a patient told to drink more water because her headache was likely caused by her dehydration has been treated for cancer if she turns out to have a brain tumor. And that is true even if dehydration really was the root cause of the headache. Headaches, after all, are a symptom of both brain tumors and dehydration. So, to Reliance Standard, treatment for a headache during the lookback period converts any disease or condition that causes headaches into a preexisting condition under the policy. We do not overstate the company’s view — Reliance Standard doubled down on it at oral argument. This position is unreasonable — full stop. To be sure, Reliance Standard is right that Johnson presented many symptoms to her doctors during the lookback period, some of which were not inconsistent with scleroderma. But recall that these symptoms — things like nausea, vomiting, cough, fatigue, and swelling— w ere vague and general, pointing to any variety of other ailments. And though Johnson received no fewer than ten diagnoses, scleroderma was conspicuously absent from the list.

Because no reasonable grounds were found to exist, the Court did not have to proceed to Steps 4-6, in order to consider the conflict-of-interest under which the plan administrator’s decision was made.  The Court, nevertheless, noted that the insurance company’s decision was “arbitrary and capricious.”

Johnson v. Reliance Standard Insurance, No.23-13443, 2025 WL 3251015 (11th Cir. Nov. 21, 2025).

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The Model Rules require that any disclosure in support of withdrawal be narrowly tailored, protective of the client’s interests, and undertaken only within the scope of an applicable exception.

Unless an explicit exception to the duty of confidentiality applies or the client provides informed consent, the lawyer may not reveal “information relating to the representation” in support of a withdrawal motion.

Disclosure of information relating to the representation is not “impliedly authorized in order to carry out the representation” under Rule 1.6(a) or otherwise impliedly authorized even when Rule 1.16(a) requires the lawyer to seek to withdraw.

If disclosure is permitted by an exception to the duty of confidentiality, such as when disclosure is required by a court order, it must be strictly limited to the extent reasonably necessary and, whenever possible, made through measures that protect confidentiality such as by making submissions in camera or under seal.

When a lawyer moves to withdraw for non-payment of the lawyer’s fees as permitted by Rule 1.6(b)(5), the lawyer may disclose information relating to the representation to the extent reasonably necessary to obtain the tribunal’s permission to terminate the representation based on nonpayment. ABA Formal Opinion No. 476 explained that when judges rule on motions to withdraw for nonpayment of legal fees, they sometimes expect lawyers to explain the basis for the motion. Judicial decisions recite detailed information provided by moving lawyers about the money owed, the legal services performed, and other related facts. The decisions cited by Opinion 476 demonstrate “that these courts found such details pertinent to their assessment of the motions.” The Opinion, however, was limited to the specific circumstance in which “a judge has sought additional information in support of a motion to withdraw for failure to pay fees.” The Opinion explained that “Rule 1.6(b)(5) authorizes the lawyer to disclose information regarding the representation of the client that is limited to the extent reasonably necessary to respond to the court’s inquiry and in support of that motion to withdraw.”

Rules 3.3, 1.13 and 1.14 expressly permit or require disclosure of information relating to the representation and may conceivably permit disclosures in support of a withdrawal motion in specific circumstances. Rule 3.3(a) provides: “If a lawyer, the lawyer’s client, or a witness called by the lawyer, has offered material evidence and the lawyer comes to know of its falsity, the lawyer shall take reasonable remedial measures, including, if necessary, disclosure to the tribunal.” Rule 1.13(c)(2) permits a lawyer representing an organization to reveal information relating to the representation if the organization’s highest authority fails to address an act, or refusal to act, that is clearly a violation of law that the lawyer reasonably believes is reasonably certain to cause substantial injury to the organization “whether or not Rule 1.6 permits such disclosure, but only if and to the extent” the lawyer reasonably believes the disclosure is necessary to prevent substantial injury to the organization. Rule 1.14(c) allows lawyers to take protective action to aid a client with decision-making limitations who is at risk of financial or other harm. If the requirements of these rules are otherwise satisfied, they may authorize disclosure in the context of withdrawal.

When the client does not give informed consent to disclosing information relating to the representation in support of a motion to withdraw, and there is no applicable exception to the duty of confidentiality, lawyers should proceed in stages:

(1) initially submit a motion providing no confidential client information apart from a reference to “professional considerations” or “irreconcilable differences”;

(2) upon being informed by the court that further information is necessary, respond, when practicable, by seeking to persuade the court to rule on the motion without requiring the disclosure of confidential client information, asserting all nonfrivolous claims for maintaining confidentiality consistent with Rule 1.6(a) and for protecting the attorney-client privilege;

(3) if that fails and the lawyer is nonetheless ordered to submit information by the court—thereby invoking Rule 1.6(b)(6)’s exception—do so only to the extent “reasonably necessary” to satisfy the needs of the court and preferably by whatever restricted means of submission are available, such as in camera review, under seal, or such other procedures designated to minimize disclosure as the court determines is appropriate; and

(4) if the court does not order the lawyer to disclose but states that the motion to withdraw will be denied unless the lawyer provides more information, the lawyer remains bound by the duty of confidentiality and should remind the judge that, absent an order from the court, the lawyer is obligated under Rule 1.6 to maintain the confidentiality of the information. In doing so, the lawyer should also request that, if the court does order the lawyer to disclose, the court require the lawyer to disclose only so much information protected by Rule 1.6 as is necessary and allow the lawyer to make those disclosures in camera or submitted under seal so as to minimize harm to client’s interests.

Ultimately, the lawyer’s paramount duty is to preserve client confidentiality, even at the risk that the tribunal may deny the motion to withdraw.

ABA Formal Opinion No. 519 (Dec. 3, 2025).

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Plaintiffs claimed that out-of-network intensive outpatient program services were inappropriately priced by defendants in violation of RICO and ERISA.  Initially, the Court declined to certify the class on adequacy and commonality grounds, while also determining that plaintiffs had failed to demonstrate eligibility for prospective injunctive relief, and therefore rejecting certification under Rule 23(b)(1) and/or 23(b)(2); with respect to damages, the Court was unable to determine, on the record before it at the time, whether plaintiffs satisfied their numerosity or predominance burdens. In so holding, the Court found that “receipt of a balance bill is required for class members to demonstrate an Article III injury,” thereby rejecting “plaintiffs’ argument that injury stems from the underpayment of the disputed claims itself, regardless of balance billing….  In sum, the record before the Court indicates that some, though not most, class members received balance bills.” Therefore, there was not “any way to identify whether plaintiffs have proven numerosity.”

On renewed motion for certification, plaintiffs continued to argue that, for Article III standing purposes, receipt of an inflated balance bill was, in and of itself, an injury-in-fact.  The Court, however, disagreed: “Plaintiffs offer no explanation for what the concrete injury could possibly be as conferred by receipt of balance bill, if not accompanied by payment, and not counting the already excluded underpayment of disputed claims.”  Thus, the Court undertook a review of plaintiffs’ proffered evidence with regard to “those putative class members who have actually paid on balance bills or who plaintiffs show are required to do so.”

As to numerosity, the Plaintiffs “collected balance billing evidence from a limited sample of four providers with a relatively high volume of claims, out of a total of 1,548 providers who treated putative class members and found evidence that at least 37 individuals are known to have made payments in response to those bills…. For twenty-seven of these patients, the evidence comes in the form of a summary table from the provider simply listing the amount paid rather than a picture of the bill. Together with the five named plaintiffs, this brings the total number of class members who have demonstrated payment history to thirty-seven, which plaintiffs argue allows for a reasonable inference that the forty-member threshold can easily be crossed when the total size of the putative class is taken into account.”  After reviewing the record, the Court found that, for class certification purposes, numerosity had been met: “In just a short discovery window, plaintiffs were able to find evidence that thirty-seven putative class members paid on balance bills. Even assuming that defendants are correct some of these reflect charges not relevant to the class definition, plaintiffs’ argument is compelling that it is highly likely when all providers—over 1,500 in total—are considered, at least forty individuals will have paid on relevant charges. Having so found, going bill by bill with an eye towards identifying whether defendants’ raised objections demand each one be removed from the pool of evidence plaintiffs offer would be precisely the sort of ‘free-ranging merits inquiry’ disallowed at this juncture.”

With respect to predominance:

“First, defendants assert that plaintiffs identify no class-wide methodology to prove receipt or payment of balance bills. The arguments as to why this is so lack substance. Though defendants raise some valid questions as to the details of each payment in plaintiffs’ sample of thirty-seven, this is not the same as demonstrating plaintiffs’ offered solution of requesting records from the relevant providers cannot work. Indeed, as plaintiffs note, the process of obtaining the relevant records from the providers is relatively straightforward. This sets this case apart from Olean, as well, to which defendants point, where the question centered around the sufficiency of plaintiffs’ statistical model to identify the fact and amount of injury attributable to the alleged wrongdoing. That is categorically different from this case, where the task is merely to identify class members who paid any amount on a balance bill for a relevant service.

“Second, defendants claim the standard of review issue predominates. The Court finds the existence of only two standards of review does not predominate over the relevant common questions. Though plaintiffs have produced enough class members to satisfy numerosity, discovery revealed that the number of putative class members, and therefore the number of relevant plans, is far lower than earlier thought. The number of plans through which the parties would have to sort is therefore significantly lower than defendants’ motion suggests…. Plaintiffs perhaps exaggerate how binary and rote the sorting task will be. However, the relevant question is not whether the task is completely rote; rather, it is whether this task will predominate over the common questions identified. Because ascertaining the appropriate standard as to each plan is not an overly complicated task, and because ultimately a fact-finder will be tasked with answering at most two questions, the issue does not defeat predominance.”

L.D. v. United Behavioral Health, No.20-2254, Rec. Doc. 516 (N.D.Cal. Oct. 3, 2025).

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Plaintiffs were members of a Federal class action for property damage caused by chemical explosions at Arkema’s industrial plant. After the District Court certified a class for injunctive relief, but not monetary damages, the plaintiffs filed individual actions in Texas state Court seeking monetary relief. Arkema removed the cases to Federal Court, and the District Court dismissed them as untimely.  The U.S. Fifth Circuit agreed:

“In American Pipe, the United States Supreme Court held that the commencement of a class action suspends the applicable statute of limitations as to all asserted members of the class who would have been parties had the suit been permitted to continue as a class action…. Texas intermediate appellate courts have imported the American Pipe tolling doctrine into the Texas state class action context.”  However, Texas State Courts have not extended this “to allow cross-jurisdictional tolling — i.e., to allow a federal class action to toll a state statute of limitations.” (The one Texas intermediate appellate court to consider this issue declined to apply American Pipe tolling to a Texas personal injury action based on a federal class action filed in New Mexico.)  Twice, the U.S. Fifth Circuit predicted that the Texas Supreme Court would likely not extend American Pipe tolling to Texas State Law claims based on the filing of a Federal class action.  Since Texas courts had not since re-addressed this cross-jurisdictional tolling issue, the Fifth Circuit followed its earlier decisions.

Judge Haynes, dissenting, suggested that the issue should be certified to the Texas Supreme Court: “As the United States Supreme Court noted, where someone is part of a class action, that person’s individual case on the same issues should have its statute of limitations suspended. That makes a great deal of sense because making individuals file a bunch of litigations while having a class action adds a lot of cases to courts which might not be needed. Even if put ‘in abeyance,’ they are still on the court’s list for no good reason given the pending class action. If the class action resolves all issues, then the individuals will never have to sue. If it does not, then the statute of limitations should come back in play, and they should sue if they wish within that time period…. To me, it makes little sense to require individuals to file individual cases when there is already a case in which they are part of a class addressing their specific issues. I don’t think state district courts want to have a bunch of abeyance cases sitting in their office awaiting a class action decision. Nor would it make sense to make the individuals litigate the issues that the class action is litigating. That is the whole reason for the class action to resolve the issues in one case and why it makes sense to suspend the statute of limitations.”

Ackerman v. Arkema, No.25-20006, 2025 WL 3039221 (5th Cir. Oct. 31, 2025).

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Having conducted an in camera review of a sampling of documents over which the attorney-client privilege had been claimed, including ex parte submissions from Reed Smith with attempts to explain why the crime-fraud exception did not apply to each of the sample documents in question, Judge Liman, sitting in the Southern District of New York, reaffirmed its previous finding based on Levona’s showing that there was probable cause to believe that a fraud was committed by Eletson on the Arbitration Panel through the withholding of documents and presentation of perjured testimony.

With respect to the specific communications reviewed over which an attorney-client privilege had been claimed: “These documents include communications regarding the drafting of an affidavit alleged to be false and misleading, responses to document production that were intended to be fraudulent and to conceal fraudulent conduct, a conversation among lawyers and client where testimony to be given and that is alleged to be false was discussed, communications regarding the recitation of facts alleged to be false, and documents concerning the concealment of fraudulent conduct after the conclusion of the arbitration.”

“‘To properly override the privilege, a court must determine whether each communication at issue was made in furtherance of a crime or fraud.’ .… Thus, to the extent that Levona asks that the Court issue a blanket order directing the production of all of the documents on the privilege log (except those from the sample the Court has found not to be subject to the crime-fraud exception), the motion is denied.”

At the same time, the Court ordered Levona and Reed Smith to attempt to meet and confer with respect to a process regarding the review of the remainder of the documents over which the privilege has been claimed and challenged, including whether the Court should retain a special master to review them.

Eletson Holdings v. Levona Holdings, No.23-7331 (S.D.N.Y. Sept. 19, 2025).

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