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BenefitsLink Health & Welfare Plans Newsletter

Supplement to
April 16, 2013
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BULLETIN

Supplement to April 16, 2013

 

U.S. Supreme Court Decision: 'Unjust Enrichment' Defense Did Not Override Terms of Health Plan Document Providing Right to Reimbursement from Participant's Recovery from Third-Party Tortfeasor, But 'Common Fund' Doctrine Applied Because Document Was 'Silent' Regarding Attorney's Fees (PDF)
"In a Section 502(a)(3) action based on an equitable lien by agreement -- like this one -- the ERISA plan's terms govern. Neither general unjust enrichment principles nor specific doctrines reflecting those principles -- such as the double-recovery or common-fund rules invoked by [health plan participant] McCutchen -- can override the applicable contract.... While McCutchen's equitable rules cannot trump a reimbursement provision, they may aid in properly construing it. US Airways' plan is silent on the allocation of attorney's fees, and the common-fund doctrine provides the appropriate default rule to fill that gap." US Airways v. McCutchen, No. 11-1285 (U.S. Supr. Ct. Apr. 16, 2013). [Editor's note: The linked opinion includes a dissent written by Justice Scalia, in which three justices joined, opining that the participant already had conceded that the plan's right to recovery was without any contribution to attorney's fees or expenses, such that the majority opinion was wrong to find that a 'contractual gap' existed in the document.] (Supreme Court of the United States)

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