ERISA §1182 Claims-Experience Discrimination Requires Discriminatory Intent; Lifetime-Benefit Assurances Can Support Reformation When Reservation-of-Rights Notice Is Ineffective

Case: Benny Fitzwater v. CONSOL Energy, Incorporated (consolidated appeals Nos. 24-2088, 24-2091, 24-2105, 24-2106)
Court: United States Court of Appeals for the Fourth Circuit (unpublished)
Date: March 3, 2026
Author: Judge Wynn (joined by Judge Wilkinson and Senior Judge Keenan)

1. Introduction

This consolidated ERISA dispute arose after CONSOL Energy, Inc. (“CONSOL”) terminated retiree welfare benefits following a sequence of notices in 2014 and 2015. Seven retired coal miners (and one additional plaintiff below) alleged multiple ERISA violations, including (i) classwide claims and (ii) an ERISA breach-of-fiduciary-duty theory based on alleged promises that retiree medical and related benefits would last “for life,” despite plan documents containing broad reservation-of-rights language.

The Fourth Circuit addressed three clusters of issues: (1) whether the district court abused its discretion in denying class certification; (2) whether summary judgment was proper on an ERISA “claims experience” discrimination theory under 29 U.S.C. § 1182(a)(1); and (3) whether, after a bench trial, the district court correctly found a fiduciary breach (and ordered plan reformation) for two retirees while rejecting the remaining retirees’ claims for lack of detrimental reliance (or untimeliness).

2. Summary of the Opinion

The Fourth Circuit affirmed in full. It held:

• Class certification: No abuse of discretion. Plaintiffs’ appellate arguments did not meaningfully confront the district court’s distinct rationales across two orders, including Plaintiffs’ abandonment of an earlier discrimination theory and forfeiture by failing to address the later timeliness ruling.
• Claims-experience discrimination (summary judgment): Plaintiffs failed to produce evidence of discriminatory intent as required for a disparate-treatment statute that bars establishing eligibility rules “based on” health-status factors such as “claims experience.” Different impacts between retiree subgroups were insufficient.
• Breach of fiduciary duty (bench trial): The district court’s factfinding (especially on what each plaintiff knew about CONSOL’s right to terminate benefits) was not clearly erroneous. CONSOL’s challenges failed as to the two prevailing retirees (Prater and Bright), for whom the district court found misleading assurances and detrimental reliance and ordered reformation to lifetime benefits.

3. Analysis

3.1. Precedents Cited

A. Class certification: deference and appellate forfeiture

• Monroe v. City of Charlottesville and Simmons v. Poe: The court invoked these cases for the highly deferential “abuse of discretion” standard and “great deference” owed to class certification decisions. This framing mattered because Plaintiffs’ briefing did not surgically address the district court’s reasons for denial across the separate class-certification orders.
• Platt v. Mansfield: Used to enforce the principle that arguments not clearly raised in the opening brief are forfeited—here, Plaintiffs’ attempt to broaden class-certification error claims in a later brief.
• United States v. Evans: Cited for the proposition that failure to address the district court’s reasoning leaves an argument “not properly before us,” underpinning affirmance of the July 2020 timeliness-based denial.

B. ERISA § 1182 “claims experience” discrimination: disparate treatment, not disparate impact

• Tex. Dep't of Hous. & Cmty. Affs. v. Inclusive Communities Project, Inc.: The court used this decision to distinguish statutes that reach disparate impacts (text focused on “consequences”) from those aimed at disparate treatment (text focused on decision rules and actor behavior). That distinction supported reading § 1182(a)(1) as targeting how eligibility rules are set, not merely who ends up worse off.
• Hazen Paper Co. v. Biggins and Teamsters v. United States: These cases were cited for the centrality of discriminatory motive where a statute prohibits disparate treatment. The court imported that framework to § 1182(a)(1), concluding Plaintiffs needed evidence that CONSOL considered claims experience when drawing eligibility/payment lines.
• Merritt v. Old Dominion Freight Line, Inc.: Cited to acknowledge plaintiffs need not produce “smoking gun” evidence, but must still offer evidence permitting a reasonable inference of discriminatory intent—missing on this record.

C. ERISA fiduciary duty and equitable relief: misrepresentation, reliance, and standards of review

• Griggs v. E.I. DuPont de Nemours & Co. (quoting Harte v. Bethlehem Steel Corp.): Provided the Fourth Circuit’s fiduciary disclosure rule—fiduciaries must avoid not only intentional deceit but also “material misrepresentations and incomplete, inconsistent or contradictory disclosures.” This principle animated the affirmance for Prater and Bright: lifetime assurances, coupled with ineffective communication of reservation-of-rights, were found misleading.
• CIGNA Corp. v. Amara: Cited for the remedial point that the “standard of harm” depends on the equitable theory used. Although the panel ultimately declined to revisit reliance standards due to forfeiture/waiver, Amara framed the background for Plaintiffs’ late-breaking argument that reformation may not require individual detrimental reliance.
• Burstein v. Ret. Acct. Plan for Emps. of Allegheny Health Educ. & Rsch. Found.: The district court used Burstein’s four-part test (fiduciary status, misrepresentation, materiality, detrimental reliance). On appeal, the panel accepted the detrimental-reliance element as the operative framework because Plaintiffs did not timely contest it in their opening brief and indeed litigated as if it applied.
• deWet v. Rollyson and Wiener v. AXA Equitable Life Ins. Co.: These cases supported the court’s procedural holdings: arguments not raised in an opening brief are forfeited (deWet), and positions affirmatively adopted in litigation can be waived (Wiener). Together they foreclosed Plaintiffs’ attempt to shift the harm standard late in the appeal.
• Al-Sabah v. World Bus. Lenders, LLC and Chavez-Deremer v. Med. Staffing of Am., LLC: Used to articulate the mixed standard of review after a bench trial—clear error for facts (especially credibility determinations), de novo for law. This standard was outcome-determinative: the court refused to reweigh the district court’s individualized findings about each retiree’s knowledge and reliance.
• American Pipe & Construction Co. v. Utah and Bell v. Brockett: Plaintiffs invoked American Pipe tolling to rescue Jack’s claim, but the panel declined to reach it because the argument was not preserved below, citing Bell’s preservation rule.
• Peters v. Aetna Inc. and Osberg v. Foot Locker, Inc.: Plaintiffs cited these authorities late (including via Rule 28(j)) to argue reliance is not required for reformation. The panel declined to consider the belated argument. Their practical influence here was negative: they highlight a potentially important remedial debate that the panel expressly did not decide.

3.2. Legal Reasoning

A. Class certification: theory drift, timeliness, and inadequate appellate engagement

Plaintiffs’ class arguments failed because the litigation theories changed midstream. The first class bid targeted an alleged discrimination between “active employees” and “retirees,” but Plaintiffs later “dropped” that theory. The second class bid reframed discrimination around CONSOL’s 2015 decision to offer prorated transition payments only to a subset of retirees. The district court denied the renewed bid as untimely and not supported by new evidence, and Plaintiffs did not confront that reasoning on appeal. Under the Fourth Circuit’s preservation and briefing rules, that omission was dispositive.

B. § 1182(a)(1) “claims experience”: eligibility-rule discrimination requires intent evidence

The core statutory move was textual: § 1182(a)(1) bars a plan from “establish[ing] rules for eligibility” based on enumerated health-status factors, including “claims experience.” The panel treated this as a constraint on the employer’s rule-setting process (a disparate-treatment focus). Accordingly, Plaintiffs had to show that CONSOL’s differential treatment (offering prorated payments to September 30, 2014 “new retirees” but not earlier retirees) was adopted because of claims experience, not merely correlated with it.

The record, however, showed an employment-status and offer-history rationale: CONSOL sought to compensate those who, as active employees on September 30, 2014, allegedly gave up a lump-sum transition payment in exchange for promised five-year benefits, and then had that promise shortened when CONSOL accelerated termination to end-2015. That explanation fit within “bona fide employment-based classifications” contemplated by 29 C.F.R. § 2590.702(d)(1). Without evidence CONSOL considered or targeted claims experience, summary judgment was affirmed.

C. Fiduciary breach and reformation: individualized knowledge and reliance

On fiduciary breach, the panel emphasized the district court’s individualized determinations: some retirees knew (or were found to have known) of CONSOL’s reservation-of-rights and therefore could not show detrimental reliance on lifetime-benefit assurances. Plaintiffs’ appellate briefing did not meaningfully grapple with those individualized findings, which were central after a bench trial.

As to Prater and Bright, the panel held CONSOL’s arguments failed on the district court’s supported findings: (i) Bright was not made aware of the reservation-of-rights clause; and (ii) Prater was told not to worry about it because it was “attorney’s language.” On those facts, lifetime-benefit assurances could be materially misleading even if CONSOL subjectively intended, at the time, to provide benefits for life. The panel also found no clear error in the district court’s detrimental reliance findings: Prater took and stayed in employment based on the promised benefits; Bright planned retirement based on similar assurances. Reformation to provide expected lifetime medical and related benefits was affirmed as “appropriate equitable relief.”

3.3. Impact

• For ERISA health-status discrimination claims in the Fourth Circuit: The opinion operationalizes § 1182(a)(1) as requiring proof of disparate-treatment intent where the challenged action is framed as “eligibility rule” discrimination. Plaintiffs alleging “claims experience” discrimination should anticipate the need for evidence showing the employer actually considered claims-cost history in drawing the line.
• For welfare-benefit termination disputes: The decision underscores that reservation-of-rights language can permit termination, but fiduciary liability may still arise where communications about “lifetime” benefits are made without effective disclosure of the termination power—especially where employees are told to disregard reservation-of-rights language.
• For litigation strategy and appellate preservation: The case is a cautionary example: theory changes can undermine class efforts; and remedial arguments (e.g., whether reformation requires detrimental reliance post-Amara) must be squarely raised early, or they may be forfeited/waived.
• For remedies: The affirmance of plan reformation for two individuals highlights that, even when most claims fail, individualized equitable relief can survive if the factfinder credits evidence of misleading communications and reliance.

4. Complex Concepts Simplified

• Welfare benefits vs. pension benefits (under ERISA): Retiree medical/dental/vision/life insurance are generally “welfare” benefits. Unlike pensions, welfare benefits do not automatically “vest” for life; employers may reserve the right to amend or terminate them.
• Reservation-of-rights clause: Plan language stating the employer can change or terminate benefits at any time. If effectively disclosed and understood, it can defeat “lifetime promise” expectations. But if the employer’s communications render it ineffective (e.g., “don’t worry, that’s attorney language”), those communications can become actionable.
• Fiduciary misrepresentation: ERISA fiduciaries must avoid materially misleading statements or omissions when communicating about benefits. Liability can arise not only from outright lies but also from incomplete or contradictory explanations.
• Detrimental reliance: Acting to one’s detriment because of a misrepresentation—e.g., taking or keeping a job, retiring when one otherwise would not, or making retirement planning decisions based on a benefit promise. (The panel treated this as a required element here due to forfeiture/waiver, not as a universally required element in all reformation cases.)
• Disparate treatment vs. disparate impact: Disparate treatment focuses on intent—was the rule adopted because of a protected/forbidden factor? Disparate impact focuses on outcomes—does a neutral rule disproportionately harm a group? The court treated § 1182(a)(1) as the former in this context.
• Clear error review: After a bench trial, appellate courts rarely disturb fact findings, especially those based on credibility assessments. That deference was decisive for the individualized reliance/knowledge findings.

5. Conclusion

Fitzwater v. CONSOL Energy, Incorporated affirms that ERISA permits employers to terminate welfare benefits where plan documents reserve that right, but it also reinforces that fiduciaries can be liable for materially misleading “lifetime benefit” assurances when reservation-of-rights notice is ineffective or undercut. On the statutory discrimination claim, the court treated § 1182(a)(1)’s “claims experience” prohibition as requiring evidence of discriminatory intent in the setting of eligibility rules, rejecting a theory grounded primarily in differential effects between retiree groups. Finally, the opinion illustrates the practical power of preservation rules: arguments about class certification, tolling, and the harm standard for equitable relief must be timely and clearly developed, or they will not be reached.