Thoughts on Heimeshoff v. Hartford Life & Accident Insurance

The more I read yesterday's Supreme Court’s decision in Heimeshoff v. Hartford Life & Accident  Insurancethe more I return to the same position I expressed when the case was argued: that what the rule that is imposed by the Court turns out to be is much less important than that we actually have a clear rule. The Court established the rule here, and now all parties in the ERISA landscape can adjust to it and play by it. What it means is simply this: the minute a lawyer who represents participants has a new client walk in the door, that lawyer better scrutinize the plan documents and figure out when suit must be filed by. On a substantive, day in day out level, that is what the decision means.

Despite the fact that, on a day to day basis, the decision is not earthshaking in any manner, there are aspects of it that are of interest. You can start with the identity of the opinion’s author, which is Justice Thomas. The opinion falls in line, in the fundamental backbone of its reasoning, with prior opinions – concurring, dissenting or otherwise – by Justice Thomas on ERISA cases: that is to say that the logistical framework is the plan says X, the statute does not expressly require otherwise, and thus X applies. Sure, there is much more to the opinion, but all of the rest is, in many ways, just gloss added on top of that framework, in much the same way that ornaments are added to a Christmas tree, but it is still, underneath it all, a tree.

The other aspect that jumped out at me involves one piece of that gloss, which is the Justice’s suggestion that “[f]orty years of ERISA administration suggest” that claim administration is handled reasonably and generally promptly, and that under those circumstances, it should not be disruptive to enforce a reasonable contractual limitations period. While I can’t account for the whole forty years referenced by the Court, I can account for twenty or so of it in my own practice, and I would have to concur with Justice Thomas in this regard. Although there are certainly outliers that are to the contrary, my experience is that most claims are handled reasonably to very well by most plan sponsors and administrators, and that the exceptions to that rule are just that – exceptions. With that experience to draw on it, I doubt that reasonable contractual limitations periods will pose any type of a significant barrier to the efficient, effective and equitable resolution of claims.

Of course, whenever the Supreme Court weighs in on ERISA, it creates unforeseen ripples: one can think of a Supreme Court opinion on any issue under ERISA as the equivalent of throwing a pebble in a still pond, which creates waves in all directions. Going back at least as far as LaRue – which, by creation of the diamond hypothetical approach to loss, in turn gave rise to the no-diamond approach that some courts have used to find the absence of loss – Supreme Court decisions concerning ERISA have created a multitude of issues for lower courts to sort out and, more often than not, for plan lawyers to deal with in the day to day running and writing of plans. One would think that a simple ruling on a statute of limitations issue would not have that same effect, but I suspect one would be wrong, as the Workplace Prof notes in this excellent post on the decision, in which he comments on the potential future ramifications of the decision beyond simply its application to statutes of limitations.
 

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