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ERISA - Sereboff, sanity, and the Supreme Court
May 21, 2006 by Ross Runkel at LawMemo
In a 9-0 opinion, the US Supreme Court breathed a bit of sanity into ERISA. Sereboff v. Mid-Atlantic Medical Services (05/15/2006). The case also says a lot about Chief Justice Roberts.
The Sereboff fact were simple:
- The Sereboffs were insured under Mid-Atlantic's ERISA-regulated medical plan. The Sereboffs were involved in an auto accident, and the plan paid them about $75,000 to cover medical expenses. The Sereboffs recovered $750,000 from the third party that caused the accident.
- The medical plan provided that in such circumstances the insured (the Sereboffs) had to pay back the amount the plan had paid on account of the injuries. Mid-Atlantic sued to recover the money.
The legal issue was whether the relief requested Mid-Atlantic was "equitable" relief under Section 502(a)(3)(B) of ERISA's civil action provision.
The Court side-stepped a lot of arcane law dealing with distinctions between "law" and "equity." The Court viewed the case as involving an "equitable lien" based on an agreement, and that lien was on specifically identifiable funds that were under the Sereboffs' control. Therefore, the relief sought was "equitable," and the Sereboffs have to pay back the $75,000.
This opinion is a tribute to Chief Justice Roberts, who wrote it. It was unanimous. The reasoning was simple. The opinion was short - 11 pages, two footnotes.
Two good extended discussions:
Workplace Prof Blog - Sereboff and the Future of ERISA Remedies
SCOTUSblog - Monday’s Decision in Sereboff v. Mid-Atlantic Medical Services
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