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A federal court in California agreed to remove the two songwriters of the Disney animated film Frozen from a copyright infringement lawsuit, for now. The lawsuit claims that the hit song “Let It Go” was copied from a Chilean song called “Volar,” and that the two songs are so strikingly similar that Disney could not claim its song was independently created.

The plaintiff, Jamie Ciero, originally filed the lawsuit in November 2017 wherein he alleged that the songwriters, Bobby Lopez and Kristen Anderson-Lopez, copied “quantitatively and qualitatively distinct, important, and recognizable portions of his song.” This included note combinations, hooks, and melodies that are, according to Ciero, almost identical to those in his song.

Continue Reading <i>Frozen</i> Songwriters Removed from Copyright Infringement Lawsuit

How long does a copyright owner have to bring suit for copyright infringement? The answer is three years from the date of the last infringement, regardless of when the very first infringement occurred. Copyright law follows the “separate-accrual rule,” which provides for a new three-year statute of limitations each time an infringement occurs. While the three-year look back period allows copyright owners to maintain actions years or decades after the initial infringement occurs (assuming subsequent infringements), the copyright holder would only be entitled to damages for that three-year period, rather than the entire period of time the infringing activity had occurred.

Continue Reading Delay in Bringing Suit Is No Bar to Copyright Infringement Claims

Trade secrets, amorphously defined as any confidential business information which gives an enterprise a competitive edge, have not had much federal protection as compared to other intellectual property vehicles such as copyrights, trademarks and patents. Traditionally, trade secret misappropriation cases have been litigated in state court using state law. Even though the majority of states have adopted the Uniform Trade Secrets Act (“UTSA”), there are still notable differences among the various version of the UTSA implemented by the individual states. This has resulted in inconsistent and sometimes contradictory decisions regarding what a state court considers a “trade secret,” what constitutes “misappropriation” of a trade secret, and what the proper recourse is for a proven misappropriation.

Continue Reading Uniform Federal Protection for Trade Secrets Under the Newly Passed Defend Trade Secrets Act Of 2016

As a general rule a party must exhaust its administrative remedies before it can invoke the jurisdiction of the courts. However, the Third, Fourth, Fifth, Sixth, Ninth, and Tenth Circuits have all held that exhaustion is not a prerequisite to suits alleging statutory ERISA violations.

One potential administrative remedy that employees should consider is filing a complaint with the US Department of Labor, Employee Benefits Security Administration.

Before Congress enacted the Multiemployer Pension Plan Amendments Act of 1980 (“MPPAA”), “many employers were withdrawing from multiemployer plans because they could avoid withdrawal liability if the plan survived for five years after the date of their withdrawal,” and Congress was concerned “ ‘that ERISA did not adequately protect multiemployer pension plans from the adverse consequences that result when individual employers terminate their participation or withdraw.’ ”

The MPPAA was therefore enacted and was “designed ‘(1) to protect the interests of participants and beneficiaries in financially distressed multiemployer plans, and (2) to encourage the growth and maintenance of multiemployer plans in order to ensure benefit security to plan participants.’ ”

To accomplish these goals, the MPPAA “requires that a withdrawing employer pay its share of the plan’s unfunded liability,” which “insures that the financial burden will not be shifted to the remaining employers” in the fund. 

The pension fund determines whether withdrawal liability has occurred and in what amount.  A “complete withdrawal … occurs when an employer-(1) permanently ceases to have an obligation to contribute under the plan, or (2) permanently ceases all covered operations under the plan.” The amount of an employer’s withdrawal liability is the employer’s proportionate share of the unfunded vested benefits existing at the end of the plan year preceding the plan year in which the employer withdraws.

A trustee is empowered to sue a withdrawing employer for its share of the unfunded liability of the plan. If, however, the trustee does not sue, a beneficiary may sue the trustee as well as the party or parties the trustee failed to sue. Consequently, should we discover that the trustees of the merged pension plan at issue failed to sue a withdrawing employer, we would have a cause of action against the trustees and the withdrawing party. 

ERISA section 1054(g)(1), provides in relevant part: “The accrued benefit of a participant under a plan may not be decreased by an amendment of the plan ….” The anti-cutback rule is a “crucial” aspect of ERISA’s protection of pension benefits. In light of the importance of the anti-cutback rule and in order to avoid work-arounds that curtail accrued benefits by means other than formal plan amendments, courts have deemed actions to be violative of the anti-cutback rule even when there had not been a formal amendment of a pension plan. 

Treasury regulations implementing the anti-cutback rule make the point explicitly: a pension plan may not deny a protected benefit “directly or indirectly, through the exercise of discretion ….”  Moreover, plan participants are entitled to notice whenever a plan amendment is seriously considered or enacted. 

Sometimes a violation of the anti-cutback provision will give rise to a breach of fiduciary duty claim.  According to the Second Circuit, amendments to multi-employer plans which “affect the allocation of a finite asset pool to which each participating employer has contributed” could properly be treated as fiduciary functions.  However, the Third Circuit does not agree and does not make a distinction between single-employer or multi-employer pension plans.

Thus, the Third Circuit has adopted the view that ERISA’s fiduciary duty provision does not apply to amendment of multiemployer plans. Therefore, absent some other culpable conduct, a violation of ERISA’s anti-cutback provision will not, by itself, support a breach of fiduciary claim in New Jersey.

Each plan subject to minimum-funding requirements must maintain a minimum-funding standard account and meet a minimum-funding standard. A funding standard account consists of charges for normal costs, amortization costs and funding deficiencies, offset by credits for amounts contributed by the employer, amortization gains, waived funding deficiencies, and the excess of any debit balance in the funding standard account over any debit balance in the alternative minimum standard account, if any.

All costs, liabilities, rates of interest, and other factors under the plan must be determined on the basis of actuarial assumptions and methods that must be reasonable in the aggregate and in combination offer the actuary’s best estimate of anticipated experience under the plan. A plan meets the minimum-funding requirements only if, at the end of each plan year, the account does not have an accumulated funding deficiency.

ERISA establishes the fiduciary responsibilities applicable to employee benefit plan administrators and sets out certain fiduciary standards by which trustees’ actions will be measured, including the mandate that trustees are to discharge their duties solely in the interest of the plan with the care, skill, and diligence which a prudent individual would use in similar circumstances in accordance with the instruments governing the plan and through diversifying the plan’s investments.


Supplementing these fundamental standards prohibits specific transactions. A plan fiduciary may not cause the plan to engage in a transaction that constitutes a loan, sale, or other transfer of assets to a party in interest, or the improper acquisition of employer security or real property. The statute also forbids a fiduciary from dealing with assets of the plan in his own interest or receiving consideration from any party dealing with the plan in a transaction involving plan assets; nor may a fiduciary participate in any transaction involving the plan on behalf of a party whose interests are adverse to the plan. Trustees who violate their fiduciary duty may be held personally liable and the courts are free to fashion equitable relief appropriate to the circumstances, including removal of the trustee. 

Fiduciary duty under ERISA has three components:

  1. a duty of loyalty pursuant to which all decisions regarding an ERISA plan must be made with an eye single to the interest of the plan participants and beneficiaries;
  2. the prudent-person obligation imposes an unwavering duty to act both as a prudent person would act in a similar situation and with single-minded devotion to those same plan participants and beneficiaries; and
  3. an ERISA fiduciary must act for the exclusive purpose of providing benefits to plan beneficiaries.

Of these, the duty to act solely in the interest of plan participants and beneficiaries has been called the main fiduciary duty.

A participant, beneficiary, or other fiduciary may bring a civil action against any plan fiduciary who breaches any responsibilities, obligations, or duties under ERISA. However, the statutory provisions recognizing a right of action against an administrator for breach of trust obligations are limited to claims on behalf of the plan for misconduct regarding the trust itself, not the payment of benefits to participants. Recovery from a fiduciary for breach of fiduciary duty inures to the benefit of the plan as a whole. 

Therefore, ERISA actions for breach of fiduciary duty should be brought in representative capacity on behalf of the plan as whole. The trick seems to be proving that the plan assets themselves have been improperly depleted, rather than just the anticipated benefits of the individual plaintiffs being extinguished. 

Moreover, there is usually a question or disagreement regarding whether the alleged wrongdoer, is actually a fiduciary or trustee of the pension plan. To determine whether a person is a fiduciary under ERISA with respect to the particular function at issue, discretionary authority or responsibility of such person with respect to that function must be examined and the actions of the person to be charged as a fiduciary for the function must be considered. However, the ERISA provisions, creating a duty of care by requiring the administrator to use the care, skill, prudence, and diligence, under the circumstances then prevailing, that a prudent person acting in a like capacity and familiar with such matters would use in conduct of like enterprise does not create a standard of absolute liability. For an ERISA fiduciary to be liable for a breach of duty, there must be a showing of some causal link between the alleged breach and the loss the plaintiff seeks to recover. To show that a fiduciary is excused from liability for any loss which results from a participant’s or beneficiary’s exercise of control over an investment under an ERISA provision, the causal nexus between the participant’s or beneficiary’s exercise of control and claimed loss is established with proof that the participant’s or beneficiary’s control is the cause-in-fact, as well as a substantial contributing factor in bringing about the loss incurred.  Notably, the fiduciary duties owed participants and beneficiaries under ERISA apply only to the administration of the plan, not to its formation, amendment, or modification.

However, vested pension rights may not be altered without the consent of the retirees. Vesting of pension rights occurs when all the eligibility requirements of a voluntary noncontributory pension plan have been met, and the retiree may not therefore be divested of his rights. 

Nonetheless, in the past, courts have upheld the district court’s conclusion that an employer was not acting in an ERISA fiduciary capacity in amending its pension and welfare plans to allocate assets and liabilities between itself and a newly created subsidiary, even though it allegedly "rigged" the allocation procedures so that the subsidiary might not have enough money to provide the benefits by the time it became responsible for the retirement benefits of the former employees of the parent corporation.  The district court had rejected arguments that the employer, although not a fiduciary in making the decision to restructure, became a fiduciary when it "invaded" its ERISA plan trust corpus to allocate the trust assets and thereby exercised management and control over the assets.  In upholding this decision, the court noted that changing the design of a trust does not involve the kind of discretionary administration that typically triggers fiduciary responsibilities.  The court concluded that the conduct complained of—that the employer had allocated the assets of its plans in a manner allegedly benefiting the employer to employees’ detriment—might violate ERISA provisions regarding transfer of plan asset, but that the allocation did not implicate ERISA’s fiduciary provisions. 

The 1980 amendments provided that a plan sponsor (the trustees) may cause a multiemployer plan to merge with another only if it complies with regulations of the Pension Benefit Guaranty Corporation, the benefits of participants are not adversely affected, and other statutory conditions are observed.

As a long-term employee, it is important to know what is happening with your pension plan, but more importantly, what could happen.  There is an enormous body of law that covers retirement plans, however, given its convoluted nature, a simple question or issue may require a lengthy and complex answer.  Nonetheless, below, and following in later posts, is a condensed discussion of the general law and some of the more prominent issues that arise in the context of pension plans.

The Employee Retirement Income Security Act of 1974 (“ERISA”), established a comprehensive regulatory and remedial scheme designed with a curative aim to protect individual pension rights and is liberally construed to safeguard the interests of fund participants and beneficiaries and to preserve the integrity of fund assets. 

ERISA’s policy is to protect the interests of employee-benefit plan participants and beneficiaries, by requiring the disclosure and reporting to them of financial and other plan information; by establishing standards of conduct, responsibility, and obligation for fiduciaries; by providing appropriate remedies, sanctions, and ready access to the federal courts; and by improving the equitable character and the soundness of such plans through requirements as to the vesting of accrued benefits of employees with significant periods of service, minimum standards as to funding, and a requirement as to coverage by plan termination insurance.
Pension funds are governed by ERISA and it is well established that ERISA displaces all state law purporting to relate to private pension plans. The statute, however, does not address many of the issues that arise in the normal course of the administration of such pension plans. Therefore, in a situation where the statute does not provide explicit instructions, it is well settled that Congress intended that the federal courts would fill in the gaps by developing, in light of reason, experience, and common sense, a federal common law of rights and obligations imposed by the statute.

On August 17, 2006, President Bush signed into law the Pension Protection Act of 2006 (the “PPA”).  The PPA establishes new funding requirements for defined benefit pensions and included reforms that affect cash balance pension plans, defined contribution plans, multiemployer plans and deferred compensation plans for executives and highly compensated employees.  However, as it relates to multiemployer plans such as union pension plans, most of the funding requirements for multiemployer plans that were in effect before enactment of the PPA remain in effect under the new law.  The PPA simply establishes new requirements for multiemployer plans that are in financial distress as a result of being significantly underfunded.  Essentially, the PPA abrogates certain anti-cutback rules and establishes a new set of rules for improving the funding of multiemployer plans that are deemed to be in “endangered”, “seriously endangered” or “critical” status.  These new requirements will remain in effect through 2014.

In general, ERISA prohibits reductions in accrued, vested benefits.  These ERISA provisions are commonly called “anti-cutback” rules.  The PPA changes the ERISA anti-cutback rules so that plans in critical status are permitted to reduce or eliminate early retirement subsidies and other “adjustable benefits” to help improve their funding status if this is agreed to by the bargaining parties.  Benefits payable at normal retirement age cannot be reduced, and plans are not permitted to cut any benefits of participants who retired before they were notified that the plan is in critical status.  Adjustable benefits include certain optional forms of benefit payment, disability benefits, early retirement benefits, joint and survivor annuities (if the survivor benefit exceeds 50%), and benefit increases adopted or effective less than five years before the plan entered critical status.

A multiemployer plan is considered to be in critical status if: (1) it is less than 65% funded and has a projected funding deficiency within five years or will be unable to pay benefits within seven years; (2) it has a projected funding deficiency within four years or will be unable to pay benefits within five years (regardless of its funded percentage); or (3) its liabilities for inactive participants are greater than its liabilities for active participants, its contributions are less than carrying costs, and a funding deficiency is projected within five years.  A plan in critical status has one year to develop a rehabilitation plan designed to reduce the amount of underfunding.  Pursuant to such a rehabilitation plan, the plan is permitted to reduce or eliminate early retirement subsidies to help improve their funding status.  In addition to giving plans the right to eliminate or reduce some benefit payment options and early retirement benefits for plan participants who have not yet retired, the law also establishes new disclosure requirements for multiemployer plans.

The plan must notify all affected parties within 30 days after a determination is made that the plan is in critical status.  Beginning 30 days after this notification, a 5% employer surcharge will apply to keep plan funding from deteriorating while the rehabilitation plan is being developed.  This surcharge increases to 10% in the second year and stays in effect until the rehabilitation plan has been approved.  During this period, increases in benefits and reductions in contributions are prohibited.  The surcharge is no longer required beginning on the effective date of a collective bargaining agreement that includes a rehabilitation plan.  A plan has 10 years to move out of critical status from the earlier of (1) two years after adoption of the rehabilitation plan or (2) the first plan year after the beginning of collective bargaining agreements covering 75% of active participants.  If the parties to the collective bargaining agreements fail to agree on a funding improvement plan, a default schedule will apply that assumes no increases in contributions — unless necessary to exit critical status — after benefit accruals and adjustable benefits have been reduced to the extent permitted by law.  A plan exits critical status if it no longer projects a funding deficiency within 10 years.