Legal Roundup: NFL Facing Backlash Over Benefits ‘Maze’, GE Accused of Fraud and More
Former Player Sues NFL Over Disability Benefits ‘Maze’
The Case: Christopher Hudson, who played eight years in the NFL as a safety, sued the league over disability benefits.
In a complaint filed in May, Hudson claimed that former players must navigate through a complicated “maze” of legal jargon and purposely confusing processes to gain benefits.
Bloomberg explains: “Hudson claims that a summary of the retirement plan ‘failed to define or explain terms, used legal jargon’ and ‘discouraged players from retaining a lawyer to assist them through the benefit process.’ “
It went on to say, “The average plan participant ‘is disabled and likely affected by head trauma,’ Hudson claims. If that participant is initially classified at a lower level of benefits, he may not understand how hard it is to get reclassified as having injuries that can be shown to be related to playing football, according to the complaint.”
Scorecard: On September 5, U.S. Magistrate Judge Robert Lehrburger recommended that the case be dismissed.
Coincidentally, it was the same day Hudson’s former team, the Chicago Bears, kicked off the NFL season against the Green Bay Packers.
“He found that neither the council nor the union is a fiduciary — a party bound to act in the interest of another — responsible for monitoring the board of the retirement plan and its members,” according to Bloomberg.
The judge said the plan descriptions reasonably inform participants of how to gain benefits. A judge in Manhattan will decide whether to accept Judge Lehrburger’s recommendation.
Takeaway: The NFL is facing plenty of lawsuits over head injuries, but it appears that the league’s disability plan is reasonable in the eyes of the law.
GE Accused of Concealing $24 Billion in Insurance Liabilities
The Case: A group of GE investors allege that the company hid $24 billion in insurance liabilities while artificially inflating its power business with fraudulent accounting.
Reuters reports that the suit alleges that GE understated “exposure to long-term care insurance risks and risks related to its long-term service agreements with customers that bought power plant equipment from GE.”
The suit states that in 2013, “top GE executives repeatedly misled investors by saying GE had sold its insurance business even though GE remained liable for money-losing long-term care policies,” Reuters said.
Scorecard: The case was partially dismissed by a federal judge in Manhattan. But the plaintiffs can amend their complaint if they want.
Reuters reports: “GE has denied using fraudulent accounting to hide falling sales and profits at its power unit. It said investors were victims of ‘business setbacks and forecasting misses’ that GE disclosed at the time. GE also said the suit failed to point out specific information it should have provided ‘that a reasonable investor would need to avoid being misled.’ ”
Takeaway: GE isn’t totally in the clear, but the partial dismissal represents a big win for the company in this case.
After Boat Fire Killed 34, Owners File Suit to Limit Payouts
The Case: The 75-foot Conception ship burned last weekend near California, killing 34 people.
The owners of the ship filed a petition in federal court, claiming that they should not have to pay any money to the families of victims.
No victims have sued and authorities are still searching for the 34th body. The Los Angeles Times reports that the owners “cite an 1851 statute in asking a judge to eliminate their financial liability or lower it to an amount equal to the post-fire value of the boat, or $0.”
Scorecard: The case is still brand new, so it’s anybody’s guess as to how it’ll turn out.
But it’s certainly a bad PR look for owners Truth Aquatics. Attorney Robert J. Mongeluzzi, who isn’t involved in the case but has worked extensively on maritime law, told the newspaper: “It is pretty heartless when not all the bodies have been recovered to file something saying their lives are worthless.”
Takeaway: Apparently it’s never too early to start legal wrangling. &