WSY Secures Major Fifth Circuit Win in ERISA Life Insurance Dispute

Wynne, Smith & Young attorney J. Michael Young recently secured a significant appellate victory in a complex life insurance case governed by the Employee Retirement Income Security Act of 1974 (ERISA).

Michael represented the named beneficiaries of a life insurance policy. After the policyholder’s death, other family members asserted a competing claim under the plan’s default beneficiary provisions, prompting the insurer to file an interpleader action in the U.S. District Court for the Southern District of Texas, Houston.

The district court ruled in favor of our clients. That decision was appealed, and WSY continued the fight to the U.S. Court of Appeals for the Fifth Circuit in New Orleans.

The Fifth Circuit unanimously affirmed the judgment, issuing two key rulings:

1. ERISA Standing: The Court clarified that beneficiaries in interpleader actions have standing to proceed even without exhausting administrative remedies when doing so would be futile.

2. Substantial Compliance Doctrine: The Court upheld that a policyholder’s intent to change beneficiaries, backed by substantial actions such as verbal instructions, documentation, or insurer communication, is sufficient under federal common law.

This hard-fought case reinforces important beneficiary rights and federal principles under ERISA. Congratulations to Michael Young and our litigation team for this meaningful result.