There always seem to be enough open important questions to keep ERISA practitioners operating in some uncertainty. When new legislation or regulatory guidance is not forthcoming, ERISA practitioners only have the Supreme Court and the lower federal courts to look to for assistance. Although the Supreme Court usually takes either zero or one ERISA cases per year, beginning earlier in 2019, the Supreme Court has shown a renewed interest in ERISA.
At least four ERISA-related cases will be argued before the Supreme Court this year. It is possible that more will be added, though if so, they likely will not be fully briefed and argued until next Fall.
First, here are the four that are already accepted for review by the Supreme Court:
This case will likely shed more light on the Supreme Court’s prior holding in Fifth Third Bancorp v. Dudenhoeffer, focusing on what must be pled to state a claim that a fiduciary has failed to take an action that would not do more harm than good. After Dudenhoeffer set forth that standard, with really only one exception, ERISA claims involving alleged breaches of fiduciary duty in stock drop cases have been dismissed.
This case may be more about pleading standards under Federal Rule of Civil Procedure 12(b)(6) than ERISA by the time it is written, but it arises in the context of a type of case – – stock drop cases – – that are of great interest to ERISA practitioners.
This case is to be argued on Wednesday, November 6, 2019.
ERISA’s hybrid statute of limitations breach of fiduciary duty claims includes one prong that applies when an individual has actual knowledge of an alleged breach. In that case, an individual must bring an action within three years. This case poses a question what is “actual knowledge.” If the alleged breach is apparent from ERISA-required disclosures, but the Plaintiff claims they cannot recall if they read them, is that actual knowledge?
This case is set to be argued on Wednesday, December 4, 2019.
3. Maine Community Health Options v. United States (and two other cases)
This case is not directly about ERISA, but it does interest ERISA practitioners in that it involves congressional appropriations of amounts to pay insurers under the Affordable Care Act. Congress included an appropriations rider that barred Department of Health & Human Services from using funds to pay a statutory obligation to insurers as part of the ACA. This issue will affect the financial health of these insurers.
This case is set to be argued on December 10, 2019.
This case involves the issue of whether a claim for breach of fiduciary duty regarding a defined benefit plan can be maintained when the plan is fully funded. In a defined-benefit plan, no individual has a right to a portion of the trust funds. Instead they have a right to the timely (eventual) payment of their amount due under the Plan. Therefore, some courts have said that as long as the plan is fully funded by ERISA’s standards, there is no standing to bring a claim for breach of fiduciary duty as no participant has been harmed.
The argument date for this case has not yet been set, but it will be no earlier than January 13, 2020.
There are two other cases awaiting the Supreme Court’s decision as to whether to hear the case where the Court has asked for the view of the government’s top lawyer – the Solicitor General of the United States. While the Court’s request for the Solicitor General’s view does not guarantee that they will take the case – indeed sometimes the Solicitor General recommends that the Court not grant review – it is an indication of heightened interest by the Court.
This involves the issue of which side (the participants who are suing or the fiduciaries who are defending) has the burden of proof to show that a loss did or did not result from an alleged breach of fiduciary duty. The Solicitor General has not yet filed its brief indicating its opinion as to whether the Court should grant review.
This is a throwback to the old days of preemption litigation. This is about Arkansas’ drug reimbursement rate law and whether it is preempted by ERISA. In this case too, the Court is still awaiting the view of the Solicitor General.
There could be additional petitions for review regarding ERISA that catch the Court’s eye later in the term. None of those are likely to be heard this term as the last set of arguments is in April 2020. However, at least for now the Supreme is more focused on ERISA than it has been for years.