Overview
Steptoe partner Eric Serron was quoted in a Law360 article titled “Attorneys React to High Court ERISA Reimbursement Ruling.” The article, published January 20, features commentary from lawyers on the Supreme Court’s ruling in Montanile v. Board of Trustees of the National Elevator Industry Health Benefit Plan. The justices ruled that a retirement plan cannot sue under the Employee Retirement Income Security Act (ERISA) for reimbursement of medical expenses from a third-party settlement that a plan participant has already spent.
Mr. Serron tells Law360: “Montanile will give participants an incentive to dissipate settlement recoveries as quickly as possible on non-traceable items like consumable goods, services and vacations. To minimize the threat of dissipation, plans will have to carefully monitor participant suits against third parties and bring suit to enforce their subrogation rights at the earliest possible time, which will not be cost-effective for smaller claims. The decision could also make it harder for pension plans to recover pension overpayments made to participants. There is a silver-lining for defendants in fiduciary litigation. In rejecting the plan’s broad reading of Amara, eight Justices reaffirmed Mertens and characterized Amara’s discussion of ERISA Section 502(a)(3) as dictum. Montanile will thus be cited as authority for reversing the trend in the lower courts to recognize monetary remedies against ERISA fiduciaries under Section 502(a)(3).”
The full article can be read at Law360 (subscription required).
