Denice Lessard v. Applied Risk Management Mmi Companies Professional Risk Management

Plaintiff-Appellant Lessard appeals a grant of summary judgment on her claim that Defendants Appellees Applied Risk Management, Inc. (“ARM”), its successor, Professional Risk Management (“PRM”), and the parent of PRM, MMI Companies, Inc. (“MMI”), violated section 510 of the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1140 , when Lessard’s medical benefits were terminated following the sale of ARM’s assets to PRM and Lessard was subsequently denied benefits under the new plan established by PRM7MMI. Because we find that the Asset Sale Agreement (“Agreement”) between the defendants facially discriminated against persons on disability and medical leave, we reverse the decision of the district court and remand for judgment and an award of damages in favor of the Plaintiff-Appellant.

I. FACTUAL BACKGROUND

Denice Lessard began working as a workers’ compensation analyst for ARM in February 1996. In the course of her employment with ARM, Lessard enrolled in a self-funded employee welfare benefits plan, the Group Benefit Plan (“Plan”), administered by ARM. As a Plan participant, Lessard was entitled to participate in the medical portion of the Plan. Following a…

307 F.3d 1020 Denice LESSARD, Plaintiff-Appellant, v. APPLIED RISK MANAGEMENT; MMI Companies; Professional Risk Management, Defendants-Appellees. No. 01-15648. United States Court of Appeals, Ninth Circuit. Argued and Submitted April 12, 2002. Filed October 3, 2002. Laurence F. Padway, Alameda, CA, for the plaintiff-appellant. Carolyn A. Knox, San Francisco, CA, for the defendant-appellee. Stephen C. Tedesco, San Francisco, CA, for defendant-appellee Prof. Risk Management. Appeal from the United States District Court for the Northern District of California; William H. Orrick, Jr., District Judge, Presiding. D.C. No. CV-99-03371-WHO. Before: SCHROEDER, Chief Judge, B. FLETCHER and KOZINSKI, Circuit Judges. BETTY B. FLETCHER, Circuit Judge. 1 Plaintiff-Appellant Lessard appeals a grant of summary judgment on her claim that Defendants Appellees Applied Risk Management, Inc. ("ARM"), its successor, Professional Risk Management ("PRM"), and the parent of PRM, MMI Companies, Inc. ("MMI"), violated section 510 of the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1140 , when Lessard's medical benefits were terminated following the sale of ARM's assets to PRM…

concurring:

This ploy to dump workers on long-term disability violates ERISA for the reasons cogently explained in Judge Fletcher’s opinion, plus one more: It runs afoul of the “too clever by half’ doctrine. See, e.g., Foster v. Dalton, 71 F.3d 52, 56 (1st Cir. *1028 1995) (Selya, J.); Sisters of the Third Order of St. Francis v. SwedishAmerican Group Health Benefit Trust, 901 F.2d 1369, 1372-73 (7th Cir.1990) (Easterbrook, J.). Parties acting in concert can’t get away with what they couldn’t do separately. See Maj. Op. at 1023. The lawyers who papered this transaction should have advised against it, and the clients should have heeded the warning. One hopes, perhaps in vain, that future lawyers and clients will know better.