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Supreme Court of the United States
November 27, 2012, Argued; April 16, 2013, Decided
[*91] Justice Kagan delivered the opinion of the Court.
Respondent James McCutchen participated in a health benefits plan that his employer, petitioner US Airways, established under the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1001 et seq. That plan obliged US Airways to pay any medical expenses McCutchen incurred as a result of a third party’s actions—for example, another person’s negligent driving. The plan in turn entitled US Airways to reimbursement if McCutchen later recovered money from the third party.
This Court has held that a health-plan administrator like US [***661] Airways may enforce such a reimbursement provision by filing suit under § 502(a)(3) of ERISA, 88 Stat. 891, 29 U.S.C. §1132(a)(3). See Sereboff v. Mid Atlantic Medical Services, Inc., 547 U.S. 356, 126 S. Ct. 1869, 164 L. Ed. 2d 612 (2006). That section authorizes a civil action “to obtain . . . appropriate equitable relief . . . to enforce . . . the terms of the plan.” We here consider whether in that kind of suit, a plan participant like McCutchen may [****7] raise certain equitable defenses deriving from principles of unjust enrichment. In particular, we address one equitable doctrine limiting reimbursement [**1543] to the amount of an insured’s “double recovery” and another requiring the party seeking reimbursement to pay a share of the attorney’s fees incurred in securing funds from the third party. We hold that neither of those equitable rules can override the clear terms of a plan. But we explain that the latter, usually called the common-fund doctrine, plays a role in interpreting [*92] US Airways’ plan because the plan is silent about allocating the costs of recovery.
In January 2007, McCutchen suffered serious injuries when another driver lost control of her car and collided with McCutchen’s. At the time, McCutchen was an employee of US Airways and a participant in its self-funded health plan. The plan paid $66,866 in medical expenses arising from the accident on McCutchen’s behalf.
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569 U.S. 88 *; 133 S. Ct. 1537 **; 185 L. Ed. 2d 654 ***; 2013 U.S. LEXIS 3156 ****; 81 U.S.L.W. 4236; 55 Employee Benefits Cas. (BNA) 1845; 24 Fla. L. Weekly Fed. S 138; 2013 WL 1567371
US AIRWAYS, INC., in its capacity as fiduciary and plan administrator of the US AIRWAYS, INC. EMPLOYEE BENEFITS PLAN, Petitioner v. JAMES E. McCUTCHEN et al.
Prior History: [****1] ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT
US Airways, Inc. v. McCutchen, 663 F.3d 671, 2011 U.S. App. LEXIS 22883 (3d Cir. Pa., 2011)
Disposition: Vacated and remanded.
common-fund, reimbursement, equitable, costs, unjust enrichment, third party, double-recovery, insurer, terms, principles, reimbursement provision, equitable relief, medical expenses, recovered, override, parties, court of equity, equitable lien, third-party, courts, funds, equitable doctrine, equitable defense, terms of the plan
Pensions & Benefits Law, Remedies, Equitable Relief, General Overview, ERISA, Civil Litigation, Reasonable Expectations, Civil Procedure, Preliminary Considerations, Equity, Relief, Injunctions, Attorney Fees & Expenses, Basis of Recovery, American Rule, Insurance Law, Claim, Contract & Practice Issues, Unjust Enrichment Doctrine, Justiciability, Standing, Third Party Standing, Subrogation, Contracts Law, Contract Interpretation, Intent, Quantum Meruit, Business & Corporate Compliance, Pensions & Benefits Law, Plan Establishment, Fiduciaries, Fiduciary Responsibilities, Parol Evidence