April 17, 2013
US Airways, Inc. v. McCutchen
Docket No. 11-1285
After health-plan participant recovered damages arising from automobile accident from third party tortfeasor, plan administrator filed suit against participant for “appropriate equitable relief” pursuant to § 502(a)(3) of the Employee Retirement Income Security Act (ERISA), seeking reimbursement of the entire amount it had paid participant for his medical expenses without allowance for participant’s legal costs. The District ordered participant to pay administrator the entire amount, and participant appealed. The Third Circuit Court of Appeals vacated and remanded, reasoning that traditional “equitable doctrines and defenses” applied to § 502(a)(3) suits, and holding that the principle of unjust enrichment overrode U.S. Airways’ reimbursement clause because the clause would leave McCutchen with less than full payment for his medical bills and would give U.S. Airways a windfall.
The Supreme Court reversed, holding that: (1) the ERISA plan’s terms, not unjust enrichment or other equitable principles, govern a plan administrator’s action to enforce an equitable lien by agreement, and (2) the common-fund rule informs interpretation of a plan’s reimbursement provision and, where a plan is silent on the allocation of attorney fees, the doctrine provides the appropriate default.
Justice Kagan delivered the opinion of the Court. Justice Scalia filed a dissenting opinion, joined by Chief Justice Roberts and Justices Thomas and Alito.
Genesis HealthCare Corp. v. Symczyk
Docket No. 11-1059
Employee sought relief under the Fair Labor Standards Act (FLSA) on behalf of herself and all others similarly situated. The District Court dismissed complaint for lack of subject matter jurisdiction after employer extended offer of judgment in full satisfaction of plaintiff-employee’s alleged damages, fees, and costs. The Third Circuit Court of Appeals reversed and remanded, holding held that respondent’s individual claim was moot but that her collective action was not.
The Supreme Court reversed, holding that collective action brought by single employee on behalf of herself and all similarly situated employees for employer’s alleged violation of the Fair Labor Standards Act (FLSA) was no longer justiciable when, as conceded by plaintiff-employee, her individual claim became moot as result of offer of judgment by employer in amount sufficient to make her whole.
Justice Thomas delivered the opinion of the Court. Justice Kagan filed a dissenting opinion, in which Justices Ginsburg, Breyer, and Sotomayor joined.