Over the past 3 months we have seen some interesting trends developing in the case law behind ERISA liens. This post will not go into detail on those cases – but it’s time we shared this information:
- Cigna Corp. v. Amara in the Supreme Court: Although the district court did not have authority under Section 502(a)(1)(B) of ERISA to reform CIGNA’s pension plan, it did have authority to do so under another provision, Section 502(a)(3). The SOCTUS Blog’s “Plain English Holding”: Courts may order changes to the terms of a pension plan to remedy false or otherwise unlawful disclosures by the plan to the plan participants. The progeny ofAmara will begin to take this holding a step further.
- Zurich American Ins. Co. v. O’Hara, 11th Circuit: WhileAmara seemed to open the use of equitable defenses in ERISA liens, Zurich ignored this opening and relied strictly on the plain language of the ERISA plan.
- U.S. Airways v. McCutchen, 3rd Circuit: Citing Amara, the Court noted that an ERISA Plan’s ability to recover was limited by statute to “appropriate equitable relief.” The court then reasoned that appropriate equitable relief requires application of defenses available in equity actions. These defenses include the common fund doctrine and perhaps the made whole doctrine.
- The 9th Circuit heard arguments on the same situation in Seattle on February 9, 2012. We await its decision (that court has been historically liberal in its pro-plaintiff view of ERISA).
If the 9th Circuit follows the 3rd Circuit a large portion of Americans will be covered by pro-beneficiary (pro-plaintiff) ERISA lien laws – there should be little doubt the Supreme Court will get its chance to way in sooner or later.
We will post more detailed analysis on each of these cases in the upcoming weeks.
Ryan J. Weiner Co-Founder Lien Resolution Services www.lienresolutionusa.com https://lienblog.wordpress.com Twitter: @LienResolve rweiner@lienresolutionusa.com
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