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(c) 2014 Jon L Gelman, All Rights Reserved.

Thursday, November 29, 2012

"Under the Magnifying Glass" -- US Supreme Court Hears Arguments in ERISA Equitable Reimbursement Claim

The US Supreme Court this week heard arguments in the dispute over whether ERISA claims are subject to equitable reimbursement.

Jurist summaries the case and background:

"The case [SCOTUSblog backgrounder] concerns a former employee of US Airways, James McCutchen, who was injured in a car accident. McCutchen, as an employee, had a self-funded health plan that ended up paying out approximately $66,000 for his injuries. Through insurance payouts and a settlement from the negligent driver, even with a hefty attorney's fee levied against him, McCutchen ended up approximately $66,000 ahead. US Airways then demanded reimbursement of its health plan's payout, since McCutchen's medical care was covered by other insurance options, based on language in the plan itself. The US Court of Appeals for the Third Circuit, in defiance of several other circuits held [opinion] that "appropriate equitable relief" did not include revoking the payment to McCutchen.

Interestingly enough at oral argument justice Breyer directed the parties to the historia; implications of an equitable claim:

"JUSTICE BREYER: Well -- well, let me tell
you what I'm thinking of. The -- there is a contract
all written down. They forgot to put a seal on it.
They forgot to put a seal on it, so I guess it's now
1463 or some year like that. So they go into equity.
And now, they are in equity. And the
plaintiff says, judge, I want you to enforce this
contract. He says, I'm a judge in equity. He says, I
know, but we've agreed, and you enforce it in equity.

"The contract says give Smith all the wheat,
and equity says, you know, there are other people who
would like some of this wheat, too, so we are not going
to follow the contract. We are going to modify the
contract according to equitable principles, which, as
you say, they can do. And the other side says, no, they
wouldn't. They'd follow the contract. They are just in
equity because they forgot the seal.

"Okay. What is your best case to show they
did, indeed, modify it with the Common Fund Doctrine or
some other doctrine? I want to be sure to read it with
a magnifying glass
."

U.S. Airways v. McCutchen (11-1285)
....
Jon L.Gelman of Wayne NJ, is the author NJ Workers’ Compensation Law (West-Thompson) and co-author of the national treatise, Modern Workers’ Compensation Law (West-Thompson).  

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