Liberty Life Veterans Long-Term Disability Litigation

Bush v. Liberty Life Assurance Company of Boston, et al., No. 4:14-cv-01504-YGR (N.D. Cal.)

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Summary of the Lawsuit

The lawsuit challenges Liberty Life Assurance Company of Boston (“Liberty Life”) policy and practice of offsetting the benefits its group long-term disability plans for veterans of the United States Armed Forces by the amount of Veterans Disability Benefits they receive from the Department of Veterans Affairs (“VA”).

Summary of the Claims

The Lawsuit concerns group long-term disability plans administered by Liberty Life. These plans, offered through participants’ employers, provide income to employees in the event of disability. The plans allow for offsets of certain “other income” specified in the Plans’ policies.

The lawsuit alleges that Liberty Life improperly interprets the policy to deem Veterans Disability Benefits as “other income” under the plan, despite the policy of the plan making no specific reference to Veterans Benefits. The lawsuit also alleges that even if the terms of the policy itself permits such offsets, offsets of Veterans Benefits were insufficiently disclosed to participants and any offsets violate the Veterans Act. As a result, the lawsuit alleges that Liberty Life has improperly withheld payments of benefits owed to the disabled veterans in the class or improperly attempted to collect prior payments of those amounts.

The lawsuit also alleges that Hyundai Motor America (“Hyundai”) failed to establish the Hyundai Motor America Group Disability Income Plan pursuant to a written instrument, preventing participants and beneficiaries from being able to clearly understand their benefits or challenge any incorrect interpretation of them.

Class Action Information

The Court has certified two settlement classes defined as follows:

(1) the Liberty Life Settlement Class - All veterans who were honorably discharged from service in the United States Armed Forces and who are participants in ERISA-covered employee welfare benefit plans that provide long-term disability benefits (“LTD benefits”) which are insured by group longterm disability policies (“LTD Policies”) issued by Liberty Life Assurance Company of Boston (“Liberty Life”); and all beneficiaries of such participants.

(2) the Liberty Life Settlement Subclass – Members of the Liberty Life Settlement Class whose LTD benefits were reduced or offset by the amount of VA benefits paid or payable to that Settlement Subclass Member from January 1, 2008 through the Settlement Effective Date.

The following persons are excluded from the Classes: persons who had decision-making or administrative authority relating to the establishment, administration, modification, funding, or interpretation of any plan funded or insured by a group long-term disability plan issued by Liberty Life or persons who had decision-making or administrative authority relating to the establishment, administration, modification, funding, or interpretation of any other employee welfare benefit plan to which a Liberty Life policy, contract, certificate, or agreement is offered.

Status of the Litigation

The Complaint was filed on April 1, 2014. Defendants filed a Motion to Dismiss several counts of the complaint on July 22, 2014. The Court issued a decision on January 2, 2015 finding that certain claims could be brought only against the plan administrator, Hyundai, not Liberty Life, but found that all claims could proceed against at least one of the defendants. Plaintiff filed an Amended Complaint on April 20, 2015 which Defendants moved to dismiss some claims; a decision on that motion is pending. The Parties then enaged in significant discovery.

Plaintiff and Liberty Life executed a Settlement Agreement on August 15, 2016. Plaintiff filed motion for Class Certification and Preliminary Approval of Settlement on August 16, 2016. A hearing on preliminary approval was held on September 27, 2016, and the Court granted preliminary approval of the settlement the same day.

A hearing on Final Approval of Settlement is set for 2pm on February 28, 2017 in Courtroom 1 on the 4th floor of the Oakland Courthouse located at 1301 Clay Street, Oakland, California 94612.


Pursuant to the settlement, Liberty Life agreed to stop reducing or offsetting LTD benefits by VA benefits under their current policies. While the agreement does not prevent Liberty Life from seeking regulatory approval of a new policy in the future that explicitly provides and discloses that future LTD policy to allow for an offset for VA benefits, Liberty Life will need to obtain such approval and explicitly disclose the offsets and nothing prevents a future challenge to those policies. For those class members who had VA offsets imposed, Liberty Life has agreed to pay 60% of the amount of LTD benefits offset by VA benefts to members of the Settlement Subclass.

Additionally, Liberty Life has agreed to incur any costs with notice or administration of the settlement. Finally, Liberty Life agreed to pay an additional $425,000 to Class Counsel as attorneys’ fees and expenses.

Whom to Contact for More Information

If you are a member of either of the proposed classes or you have information which might assist us in the prosecution of these allegations, please contact one of the following persons:

R. Joseph Barton, Esq. (
Ming Siegel, Paralegal (
Block & Leviton LLP
1633 Connecticut Ave. NW, Suite 200
Washington DC 20009
(202) 734-7046

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