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ERISA Reimbursement Liens
On April 16, 2013, the U.S. Supreme Court issued its long-awaited decision in U.S. Airways v. McCutchen, crafting a rule that, in many cases, will allow ERISA plans to strip their beneficiaries of much-needed compensation when they are injured in an accident. ERISA plans must be enforced according to their terms, the Court held, even where those terms conflict with principles of equity that have governed for hundreds of years. For the Court, "if the agreement governs, the agreement governs."
But in the second half of its decision, the Court refused to allow U.S. Airways to force Mr. McCutchen to pay all of the collection costs in the case. As the Court explained, not only would that put Mr. McCutchen "in a hole," but it would force him to "pay for the privilege of serving as U.S. Airways' collection agent." The Court refused to permit it.
What Public Justice Is Doing
In 2012, we handled two precedent-setting cases before the U.S. Courts of Appeals for the Third and Ninth Circuits. U.S. Airways v. McCutchen and CGI v. Rose placed clear limits on employer-based insurers' ability to recover medical benefits from injury victims -- the first courts in the country to do so.
We view McCutchen as merely a starting point. Although we hoped for a better result from the Supreme Court, we are already considering new opportunities to push back against ERISA plans and their efforts to line their pockets at the expense of injured employees and their families. Our first post-McCutchen ERISA case is Heimeshoff v. Hartford Insurance. This fall, Staff Attorney Matt Wessler will argue Heimeshoff before the Supreme Court.
We will continue to push for fairness and basic protections for those who need it most. Contracts are not -- and should not be -- above the law.