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ERISA Litigation

In the four decades since the passage of ERISA, the US Supreme Court has granted certiorari to many cases dealing with the interpretation and application of the law. The Court's jurisprudence guides the District and Circuit courts in understanding how to handle ERISA claims.

In the 1983 case Shaw v. Delta Air Lines, the Court was asked to determine whether ERISA preempted New York state laws. The Court held that ERISA preempted the state Human Rights Law where it prohibited practices that were legal under federal law. Before the Court held that ERISA preempted the state law, it first determined whether the state law related to employee benefits within the meaning of § 514(a), also known as the Savings Clause. The statutory language was given the broadest possible meaning and the Court stated that a law related to the normal use of the phrase employee benefit plan if the law has a connection with or reference to such a plan.

The Court granted certiorari to a 1987 case, Metro Life Ins. Co. v. Taylor to determine whether ERISA's civil enforcement provision, § 502(a)(1)(B), preempted common law claims and displaced them to federal court. The Court answered in the affirmative and held that ERISA preempted common law causes of action filed in state court and that § 502(a)(1)(B) provided an exclusive federal cause of action for resolution of suits by beneficiaries to recover benefits from a covered plan.

Section 502(a)(1)(B) was also at issue in Firestone Tire & Rubber Co. v. Bruch, where the Court held that the de novo standard of review applies to a denial of benefits challenged under § 502(a)(1)(B). The standard applies unless the administrator or fiduciary of the benefit plan had discretionary authority to determine benefits eligibility or to construe the terms of the plan.

The Court continues to handle litigation pertaining to § 502 of ERISA. The Court held in LaRue v. DeWolff, Boberg & Associates in 2008 that ERISA allows an employee to sue for losses incurred when the administrators of his retirement plan ignore his instructions on how to invest his retirement money. The Court held in the 2010 case, Hardt v. Reliance Standard Life Insurance Co., that unsuccessful fee claimants that filed lawsuits under ERISA can still be eligible for attorney's fees under § 502.

In Conkright v. Frommert, the Court in 2010 granted certiorari to determine whether an administrator that made a "single honest mistake" should lose deference for subsequent interpretations of the plan. In doing so, it revisited part of the holding from Bruch that granted deference to ERISA plan administrators in interpreting plans. The Court held that District Courts must defer to an administrator's reasonable interpretation of the terms of the plan, even if a court invalidated a prior interpretation of the plan by that administrator.




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