Labor & Employment Law Daily Wrap Up, WORTH NOTING—Federal appeals court cases of note, (Sep 5, 2025)

By WK Editorial Staff

A roundup of recent federal appeals court decisions of interest to the labor and employment law community.

3d Cir.: Court holds rapid transit system is not a railroad, dismisses FELA claim. A technician was killed while working for a transit authority at its maintenance yard, prompting the administrator of his estate to seek recovery under the Federal Employers Liability Act (FELA) against the transit authority and its owner. However, because FELA applies exclusively to “common carriers by railroad,” the transit authority and its owner moved to dismiss for lack of subject matter jurisdiction, arguing that the transit line in question is a rapid transit system, not a railroad. The district court agreed with the transit authority and dismissed the claim. The Third Circuit affirmed, finding that the Speed Line operates as a rapid transit system, characterized by short-haul, high-capacity passenger transport within a single metropolitan area—between Philadelphia, Pennsylvania and Lindenwold, New Jersey—and lacks integration with other rail traffic or freight operations. Consequently, the Speed Line does not meet the criteria of a “common carrier by railroad” under FELA, the court found (Estate of John Schroeder ex rel. Tucker v. Port Authority Transit Corp., No. 24-2515 (3d Cir. Aug. 26, 2025)).

6th Cir.: Statute of limitations, lack of regulatory obligation doom tribe’s claims against health insurer. A federally recognized Indian Tribe and its employee welfare plan sued the Tribe’s health insurer alleging it breached its fiduciary duties by failing to apply Medicare-Like Rate (MLR) discounts, resulting in overpayments for hospital services. The Tribe contended that the insurer’s actions violated ERISA, the Michigan Health Care False Claims Act (HCFCA), and constituted common-law breaches of fiduciary duty. After the district court dismissed the ERISA and common-law fiduciary claims, and granted summary judgment to the insurer on the HCFCA claim, the Tribe appealed. The Sixth Circuit affirmed the district court's decision, holding that the Tribe had actual knowledge of the insurer’s failure to apply MLR discounts by 2009, but that it did not file suit until 2014. The court also found that the HCFCA claim failed because the MLR regulations, which apply only to Medicare-participating hospitals, did not impose obligations on the insurer (Grand Traverse Band of Ottawa and Chippewa Indians v. Blue Cross Blue Shield of Michigan, No. 24-1367 (6th Cir. July 28, 2025)).

Fed. Cir.: Reduction in pension benefits under MPRA was not Fifth Amendment taking. Pension beneficiaries under a “private multiemployer defined-benefit plan” sued the government in Claims Court challenging the reduction of their benefits following the enactment of the Multiemployer Pension Reform Act of 2014 (MPRA). The MPRA aimed to “prevent future shortfalls by reducing the benefits of current beneficiaries,” and its enactment involved an amendment to ERISA that “[made] ERISA’s definition of insolvency more closely resemble that in the Bankruptcy Code.” The pension beneficiaries argued that the MPRA, as applied to their plan, constituted an uncompensated physical taking under the Fifth Amendment. The parties cross-moved for summary judgment, and the court found that a physical taking analysis did not apply, that a regulatory taking analysis did instead, and that, under that framework, no regulatory taking occurred. On appeal, the Federal Circuit affirmed. The appeals court found that the beneficiaries “d[id] not hold a property interest in the underlying assets of the [p]lan, only a contractual right, making them akin to unsecured creditors.” Regarding the regulatory takings analysis, the court concluded that the economic impact was insufficient to demonstrate that a regulatory taking occurred, the beneficiaries lacked reasonable expectations to be free from “the challenged government conduct,” and the MPRA served a substantial public purpose by ensuring the solvency of pension plans (King v. United States, No. 2023-1956 (Fed. Cir. Aug. 18, 2025)).

Cases: Procedure Safety PensionBenefitPlans TortClaims StateLawClaims