Ninth Circuit Reverses District Court Ruling in $4.1 Million ERISA Health Benefits Case

NORTHRIDGE, Calif., Jan. 28, 2026 /PRNewswire/ -- Kantor & Kantor, LLP announced today that the U.S. Court of Appeals for the Ninth Circuit reversed a district court ruling that had upheld the denial of millions of dollars in health insurance benefits to union dockworkers, sending the case back to the lower court and reviving approximately $4.1 million in disputed claims.

In an unpublished opinion issued January 21, 2026, a divided Ninth Circuit panel held that a California district court erred in concluding that a medical center where the workers received outpatient surgical treatment did not qualify as a "hospital" under the terms of a multiemployer health plan governed by the Employee Retirement Income Security Act (ERISA). The court ruled that, even under the deferential abuse-of-discretion standard, the plan administrator's interpretation lacked a reasonable basis and could not stand.

The plaintiffs - union dockworkers and their dependents - alleged that the ILWU-PMA Welfare Plan wrongfully denied coverage for facility fees associated with outpatient surgical care provided at an accredited medical center, exposing workers to substantial out-of-pocket medical expenses.

Glenn R. Kantor, Founding Partner at Kantor & Kantor, LLP, represented the workers in the litigation.

"This decision reinforces a fundamental principle of ERISA law," Kantor said. "Plan administrators do not have unfettered discretion to deny valid claims based on strained or unsupported interpretations of plan language. Even under an abuse-of-discretion standard, benefit denials must be grounded in reason and evidence - and the Ninth Circuit correctly held that standard was not met here."

The Ninth Circuit rejected the district court's reliance on internal accreditor classifications and emphasized that California regulates outpatient surgical facilities through accreditation rather than licensure. The court found that the medical center's accreditation satisfied the plan's requirements and that it was error to deny benefits based on arbitrary distinctions unsupported by governing law.

The case, Delgado et al. v. ILWU-PMA Welfare Plan, No. 24-1845, now returns to the district court for further proceedings consistent with the Ninth Circuit's ruling.

About Kantor & Kantor, LLP

Kantor & Kantor, LLP is a nationally recognized, plaintiff-side law firm dedicated exclusively to representing policyholders and beneficiaries in complex ERISA litigation, health insurance benefit denials, and appellate matters. The firm advocates for individuals and families nationwide in disputes involving health insurance, long-term disability, long-term care, and life insurance benefits.
Learn more at www.kantorlaw.net

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