The Oyez Project: Economic Activity Issues - Employee Retirement Income Security Act Decisions

Alessi v. Raybestos-Manhattan, Inc.

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Bay Area Laundry & Dry Cleaning Pension Trust Fund v. Ferbar Corp.

Does the Multiemployer Pension Plan Amendments Act of 1980's six-year statute of limitations begin to run on a pension fund's action to collect unpaid withdrawal liability on the date the employer withdraws from the plan?

No. In a unanimous opinion delivered by Justice Ruth Bader Ginsburg, the Court held that the MPPAA's six-year statute of limitations on a pension fund's action to collect unpaid withdrawal liability does not begin to run until the employer fails to make a payment on the schedule set by the fund. Justice Ginsburg reasoned that a plan's interest in receiving withdrawal liability does not ripen into a cause of action triggering the limitations period until the trustees determine and demand payment and the employer defaults on an installment. The Court's conclusion prompted a second decision, that a pension fund's action to collect unpaid withdrawal liability is timely as to any installment payments that came due during the six years preceding the suit, but payments that came due prior to that time are lost.

Black & Decker Disability Plan v. Nord

Under ERISA, are companies required to defer to the decision of a disability claimant's personal physician?

No. In a unanimous opinion delivered by Justice Ruth Bader Ginsburg, the Court held that plan administrators are not obliged to accord special deference to the opinions of treating physicians. The Court reasoned that the Court of Appeals erroneously applied a "treating physician rule" because nothing in ERISA gave rise to such a rule. Justice Ginsburg wrote, "courts have no warrant to require administrators automatically to accord special weight to the opinions of a claimant's physician; nor may courts impose on plan administrators a discrete burden of explanation when they credit reliable evidence that conflicts with a treating physician's evaluation."

Central Laborers' Pension Fund v. Heinz

Did Central Laborers' Pension violate the "anti-cutback" provision of the Employee Retirement Income Security Act of 1974 when it added to a list of positions that temporarily disqualified pension holders from receiving their benefits?

Yes. The Court unanimously held that the amendment to the plan had narrowed Heinz's rights to the benefits promised him at the time he retired, and that such a narrowing violated ERISA. Justice David H. Souter, in the Opinion of the Court, wrote, "'[A] participant's benefits cannot be understood without reference to the conditions imposed on receiving those benefits.' ... We simply do not see how, in any practical sense, this change of terms could not be viewed as shrinking the value of Heinz's pension rights and reducing his promised benefits."

Central States Pension Fund v. Central Transp.

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Central States, Southeast and Southwest Areas Pension Fund v. Central Transport, Inc.

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Concrete Pipe & Products Of California, Inc. v. Construction Laborers Pension Trust For Southern California

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Curtiss-Wright Corp. v. Schoonejongen

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Firestone Tire & Rubber Co. v. Bruch

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Geissal v. Moore Medical Corporation

Does 29 USC section 1162(2)(D)(i) allow an employer to deny Consolidated Omnibus Budget Reconciliation Act of 1985 continuation health coverage to a qualified beneficiary who is covered under another group health plan at the time he makes his COBRA election?

No. In a unanimous opinion delivered by Justice David H. Souter, the Court held that an employer may not deny COBRA continuation coverage under its health plan to an otherwise eligible beneficiary because he is covered under another group health plan at the time he elects COBRA coverage. "It is undisputed that both before and after James Geissal elected COBRA continuation coverage he was continuously a beneficiary of [his wife's employer's] group health plan," wrote Justice Souter, "[b]ecause he was thus covered before he made his COBRA election, and so did not 'first become' covered under the [his wife's employer's] plan after the date of election, Moore could not cut off his COBRA coverage under the plain meaning of [section 1162(2)(D)(i)]."

Great-West Life and Annuity Ins. v. Knudson

Does the Employee Retirement Income Security Act of 1974 authorize a suit to enforce a reimbursement provision by a health plan to recover from a beneficiary any proceeds paid by a third party?

No. In a 5-4 opinion delivered by Justice Antonin Scalia, the Court held that because Great-West is seeking legal relief - the imposition of personal liability on Knudson for a contractual obligation to pay money - ERISA does not authorize this action. The Court reasoned that the suit, which sought relief under section 502(a)(3) of ERISA, was not authorized under ERISA's catch-all provision authorizing equitable relief because the claim was for a legal remedy, or monetary damages. Justice Scalia wrote that "an injunction to compel the payment of money past due under a contract, or specific performance of a past due monetary obligation, was not typically available in equity." Justices John Paul Stevens and Ruth Bader Ginsburg filed dissents. Justices David H. Souter and Stephen G. Breyer joined in Justice Ginsburg's dissent.

Guidry v. Sheet Metal Workers National Pension Fund

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Harris Trust & Sav. Bank v. Salomon Smith Barney Inc.

Does section 502(a)(3) of the Employee Retirement Income Security Act of 1974, which authorizes a "participant, beneficiary, or fiduciary" of a plan to bring a civil action to obtain "appropriate equitable relief" to redress violations of ERISA, extend to a suit against a nonfiduciary "party in interest" to a transaction barred by section 406(a)?

Yes. In a unanimous opinion delivered by Justice Clarence Thomas, the Court held that Section 502(a)(3)'s authorization to a plan "participant, beneficiary, or fiduciary" to bring a civil action for "appropriate equitable relief" extends to a suit against a nonfiduciary "party in interest" to a prohibited transaction barred by section 406(a). "We reject," wrote Justice Thomas that, "absent a substantive provision of ERISA expressly imposing a duty upon a nonfiduciary party in interest, the nonfiduciary party may not be held liable under [section 502(a)(3)]." Justice Thomas concluded that "[section 502(a)(3)] itself imposes certain duties, and therefore that liability under that provision does not depend on whether ERISA's substantive provisions impose a specific duty on the party being sued."

Hughes Aircraft Company v. Jacobson

Did an employer violate federal pension protection law when it amended its retirement plan by establishing an early retirement program and creating a noncontributory benefit structure for new participants?

No. In a unanimous decision, announced by Justice Clarence Thomas, the Court reversed the Court of Appeals. The Court held Hughes did not violate the ERISA by establishing an early retirement program and creating a noncontributory benefit structure for new participants. Justice Thomas, writing for the Court, said the plan amendments "did not affect the rights of pre-existing plan participants and Hughes did not use the surplus for its own benefit."

Inter Modal Rail Employees Association v. Atchison, Topeka & Santa Fe Railway Co.

Does Section 510 of ERISA bar interference only with vested rights?

No. The plain language of Section 510 indicates that the applicability of its interference clause is not limited to vested rights. Congress used the word "plan" to refer to both pension and welfare benefits, and at the same time indicated that welfare plans are exempt from ERISA's stringent vesting requirements. This statutory language forecloses the possibility that Congress meant to limit the protections of Section 510 to vested rights. The Court remanded the case to the Ninth Circuit for determination of whether the fact that the SFTS employees were eligible for welfare benefits meant that they had already "attained" such rights, so that any subsequent actions taken by SFTS could not "interfere" with the "attainment of . . . right[s] . . . under the plan."

John Hancock Mutual Life Insurance Co. v. Harris Trust And Savings Bank, As Trustee Of The Sperry Master Retirement Trust No.2

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Laborers Tr. Fund v. Advanced Lightweight Conc.

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Lockheed Corp. v. Spink

May a business offer early retirement benefits on the condition that an employee give up the right to sue over any job-related claim? Can the federal government retroactively apply retirement income benefit laws?

Yes and no. In unanimous and 7-2 decisions, announced by Justice Clarence Thomas, the Court ruled that businesses may condition early retirement benefits on the forfeiture of the right to sue in a job-related claim. The Court also ruled that the government could not retroactively apply retirement income benefit laws.

Massachusetts Mut. Life Ins. Co. v. Russell

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Massachusetts v. Morash

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Mead Corp. v. Tilley

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Mertens v. Hewitt Associates

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Milwaukee Brewery Workers' Pension Plan v. Jos. Schlitz Brewing Co.

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Nachman Corp. v. Pension Benefit Guar. Corp.

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Nationwide Mutual Insurance Co. v. Darden

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Pegram v. Herdrich

Are treatment decisions made by a health maintenance organization, acting through its physician employees, fiduciary acts within the meaning of the Employee Retirement Income Security Act of 1974?

No. In a unanimous opinion delivered by Justice David H. Souter, the Court held that mixed treatment and eligibility decisions to delay medical treatment by sending a patient to a HMO owned facility, with adverse consequences, made by a health maintenance organization through its physician, are not fiduciary decisions under ERISA. Thus, Herdrich did not state an ERISA claim. "Herdrich's remedy -- return of profit to the plan for the participants' benefit -- would be nothing less than elimination of the for-profit HMO," wrote Justice Souter for the Court, "no HMO organization could survive without some incentive connecting physician reward with treatment rationing." Justice Souter noted that "the Federal Judiciary would be acting contrary to the congressional policy of allowing HMO organizations if it were to entertain an ERISA fiduciary claim portending wholesale attacks on existing HMOs solely because of their structure."

Pension Benefit Guaranty Corp. v. The LTV Corp.

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Pension Benefit Guaranty Corp. v. R. A. Gray & Co.

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Sereboff v. Mid Atlantic Medical Services, Inc.

Is a health insurance plan that requires the beneficiary to reimburse the insurer for its expenses when the beneficiary recovers damages from a third party that is responsible for the injury "equitable" under section 502(a)(3) of ERISA?

Yes. Chief Justice John Roberts, for a unanimous Supreme Court, pointed to Barnes v. Alexander, 232 U.S. 117 (1914), in deciding this case. In Barnes, an attorney's promise to pay two other attorneys a portion of the money he collected from a case that had yet to be decided was held legally binding. Roberts wrote that equity had once required a contract to specify an existing fund from which money would be paid (which could not have happened in this case), but that after Barnes this was no longer the case. Roberts wrote that "the most (the Sereboffs) can muster ... are several state cases predating Barnes and a single decision that rests .. on the simple conclusion that a contractual provision purporting to secure an equitable lien did not properly do so.."

Varity Corp. v. Howe

Did the Varity Corporation and Massey-Ferguson, Inc. act their capacity as an Employee Retirement Income Security Act of 1974fiduciary when they significantly and deliberately misled the beneficiaries? By doing so, did Varity and Massey-Ferguson violate the fiduciary obligations that ERISA imposes upon plan administrators? Does ERISA authorize a lawsuit in such cases?

Yes, yes, and yes. In a 6-3 opinion delivered by Justice Stephen G. Breyer, the Court held that, under the specific factual circumstances, Varity and Massey-Ferguson acted in their capacity as an ERISA fiduciary when they significantly and deliberately misled the plan's beneficiaries, thereby violating their fiduciary obligations imposed by ERISA. Finding that ERISA's general purpose of protecting beneficiaries' interests also favors a reading that provides a remedy, Justice Breyer said that Varity and Massey-Ferguson violated the fiduciary obligations imposed upon the plan's administrator by ERISA, by knowingly and significantly deceiving the employees as to the financial viability of the new entity and the future of the new entity's benefits plan, in order to save the employer money at the expense of the beneficiaries and that they could thus be sued for equitable relief by the individual beneficiaries. Justice Clarence Thomas filed a dissenting opinion, in which Justices Sandra Day O'Connor and Antonin Scalia joined.

Yates v. Hendon

Is the owner of a business a "participant" in a profit sharing/pension plan established under the Employee Retirement Income Security Act (ERISA)?

Yes. Justice Ruth Bader Ginsburg delivered the Court's unanimous opinion holding that a business owner, such as Yates, qualifies as a "participant" in an ERISA pension plan. The Court reasoned that this was the intent of Congress and that the act's text verifies this. In a business in which an ERISA plan covers employees, the employer can essentially qualify as an employee and receive the plan's protections. In light of this, the Court sent Yates' bankruptcy issues to a lower court for resolution.