In the February episode of Seventh Circuit Roundup, Kian Hudson and Mark Crandley explore two decisions — one on ERISA beneficiary designations, one on pleading racial-discrimination claims— with practical implications that extend well beyond their facts.

Packaging Corp. of America Thrift Plan v. Langdon: When a Fax Doesn't Suffice (To Change a Beneficiary)

The Facts

Carl Kleinfeldt divorced his wife, Dená Langdon, who remained the named beneficiary on his employer-sponsored retirement plan. In September 2022, he faxed the plan administrator to notify it of the divorce and request it to change his beneficiary designation. Carl did not, however, follow the plan's rules for changing beneficiaries — which said to contact the administrator "at [a designated phone number] or you can update your beneficiaries online” — and he died shortly thereafter without having made any further attempt to change his beneficiary.

Three parties then claimed the same retirement funds: Langdon as the named beneficiary, Carl's estate through his sister Terry Schultz as personal representative, and Schultz herself as contingent beneficiary. Faced with competing claims and no clear answer, the plan administrator did what plan administrators in this position should consider doing: it filed an interpleader action, deposited the funds with the court, and asked the court to determine to whom the funds belonged.

The district court found that Carl had substantially complied with the plan's requirements and ruled against Langdon. The Seventh Circuit reversed.

The Analysis

The case turned on the "substantial compliance" doctrine — a federal common law rule that permits federal courts hearing ERISA cases to honor a participant's attempted beneficiary change even when the participant falls short of strict compliance with a plan's rules, provided the participant demonstrated clear intent and took a meaningful step toward effectuating the change.

Carl's intent was not in dispute; his fax said exactly what he wanted. The problem was the step he took: While the plan required participants to contact the benefits center by phone or update their designation online, Carl did neither. That, the Seventh Circuit held, was insufficient. The Court explained that courts have generally applied the substantial compliance doctrine where a participant engaged the plan's actual process but made a technical error along the way — a missing field, a wrong address, a form submitted through a slightly incorrect channel. What the doctrine has not covered, and what Langdon now confirms it does not cover, is a situation where the participant bypassed the plan's process entirely. A fax to HR, however clearly intentioned, is simply not close enough to calling a benefits hotline or submitting an online form to count.

The opinion also addressed two significant threshold questions. First, because the plan administrator made no determination — interpleader is precisely the mechanism for avoiding that — there was no administrative decision to which to defer, and the Court thus addressed the question de novo. Second, the Court declined to read the Supreme Court's decision in Kennedy v. Plan Administrator for DuPont Savings & Investment Plan as eliminating the substantial compliance doctrine altogether. The Court explained that Kennedy (which held that plan administrators are entitled to rely on the plan documents) applies where plan administrators apply their plan documents to make a decision, and says less about what courts should do when administrators have affirmatively declined to answer the question at issue.

Key Takeaways

For practitioners advising clients through major life events — divorce in particular — beneficiary designations require active follow-through, not just an expression of intent. A client who contacts HR, sends an email, or makes an informal request may not have changed their beneficiary. The plan document controls, and courts will hold parties to it.

The substantial compliance doctrine remains available, but primarily where a participant engaged the correct process and stumbled on a technicality. If the plan's process was not followed at all, the doctrine is unlikely to help.

For plan administrators, Langdon reinforces the utility of interpleader: Filing early, depositing funds, and letting the court resolve the dispute is both legally defensible and practically sound.

Miao v. United Airlines: What a Discrimination Complaint Needs to Survive Dismissal

The Facts

The plaintiff, a Chinese-American man, filed a complaint alleging the following sequence of events while boarding a United Airlines flight. A white flight attendant stared at him as he boarded. He placed two suitcases and a lunch bag in the overhead bin. The flight attendant asked him to move the lunch bag under his seat. He declined, placing it on the empty adjacent seat and stating he would comply when the seat's occupant arrived. The flight attendant repeated the request. He began to comply, but the flight attendant then raised her voice, threatened to involve the captain, and — after another passenger remarked that she had been disrespectful — a supervisor removed the plaintiff from the aircraft, citing the flight attendant's allegation that he had struck her. The plaintiff further alleged that a white passenger boarding the same flight had stowed two suitcases and an equally large bag in the overhead bin without receiving any instruction from the flight attendant. 

The complaint raised claims under Title VI of the Civil Rights Act and 42 U.S.C. § 1981, both of which require proof of intentional race discrimination. The district court dismissed under Rule 12(b)(6). And the Seventh Circuit affirmed, 2-1.

The Analysis

The Seventh Circuit majority held that none of the facts alleged — taken individually or together — plausibly suggested that plaintiff was subjected to mistreatment because of his race. The majority explained that being treated badly by someone of a different race does not, without more, provide plausible basis for a racial discrimination claim. The operative question is always whether race was the cause, and the complaint needs facts that make that causal inference plausible, not merely possible.

The majority concluded that the only allegation in the vicinity of pointing toward racial motivation was the complaint's allegation that a white passenger had placed a similar volume of luggage in the overhead compartment without objection. The court found that allegation insufficient because, by the time the plaintiff was removed from the aircraft, the sequence of events between him and the flight attendant had diverged materially from anything the comparator experienced. The white passenger stowed luggage and sat down, whereas the plaintiff had a back-and-forth with the flight attendant, declined her initial request, and was involved in a confrontation. Those situations, the majority held, are not sufficiently comparable to make causation plausible.

In reaching this conclusion, the majority was careful to note that plaintiffs are not required to identify a comparator to survive dismissal. But where a purported comparator is the only allegation tying adverse treatment to race, and where that comparison does not withstand minimal scrutiny, the plausibility threshold is not met.

Judge Ripple dissented, arguing that plaintiff's complaint, fairly read, described someone attempting to comply with instructions who was overtaken by an escalating situation before he had the chance to do so. In Judge Ripple's view, the comparison to the white passenger was apt, which in turn made causation sufficiently plausible to proceed past the pleadings stage.

Key Takeaways

For plaintiffs' counsel, Miao is a useful reminder that discrimination complaints require more than a narrative of unfair treatment followed by a conclusory allegation of discriminatory motive. Where a comparator is the primary vehicle for establishing racial causation, the comparator must be genuinely similar at the point in the sequence that matters most — not merely at the outset.

For defense counsel, the case confirms that the presence of an alleged comparator in a complaint does not foreclose a 12(b)(6) motion, and courts are willing to assess whether the comparison actually supports the requisite inference.

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