A recent discussion with a colleague in the insurance industry (who shall remain nameless so as to protect the innocent) caused me to crystalize some of my inchoate thinking on how current problems in ERISA class action litigation, including too many suits, too much defense spending, too much self-protective caution on the part of plan sponsors and many more, parallel my experience decades ago as an IP litigator and coverage lawyer during the heyday of patent troll litigation. Back then, I used to joke that half my practice was IP litigation, half was ERISA litigation and half was insurance coverage counseling and litigation. I eventually stopped making that joke, because nobody ever laughed although sometimes people groaned. It was like the lawyer version of a Dad joke.

But it does illustrate the extent to which, back in the day, I was heavily involved in the patent troll litigation explosion, both as a defense lawyer handling patent and copyright cases (it’s actually amazing to me that in recent years I have still been dealing with what are essentially ransom notes to clients from copyright trolls alleging infringement and seeking payments to go away simply because it would be more expensive to litigate with them), and as an insurance coverage lawyer advising insurers on the scope of their coverage and settlement obligations in response to IP claims (in one notable matter, I arbitrated the applicability of a version of a violation of statute exclusion to a claim for large – as in seven figure – defense bills incurred in a particularly outrageous patent infringement strike suit).

A recent blog post raised the question of whether ERISA requires a specialized court, in much the same way aspects of patent law are subject to a particular specialized court. Discussions around that idea focus in particular on the extent to which different outcomes in ERISA class action cases occur dependent on where suit is filed. There is absolutely no doubt that variation in outcomes on the same facts in all types of ERISA cases, from excessive fee class actions to benefit denials to 502(a)(3) equitable relief claims, occurs across courts and different circuits. In fact, I used to make that point by explaining that ERISA preemption was intended to create a uniform body of federal law governing ERISA issues, but instead it just created a dozen different rules, one for each circuit. That is obviously an overstatement and a joke, but like most good jokes, there is some truth lurking in it.

Yet I am not completely convinced that a specialized court, rather than multiple circuit courts, is the best remedy for this problem, in that the sheer complexity of ERISA and of its application in specific circumstances often requires multiple decisions by multiple courts before a consensus is reached on what the correct rule on a given issue actually should be. So, just spit balling here, but perhaps the best solution is a structure that feeds any conflicting circuit court opinions automatically to a designated and specialized appellate bench above the circuit courts but below the Supreme Court, to maximize the opportunities for such diverse decisions to be synthesized. This alone would increase the uniformity of the body of law governing ERISA, including class action litigation, and reduce the venue shopping and other tactical maneuvers that underpin much of the boom in ERISA class action litigation. Now note that I haven’t looked into whether this is actually possible, and I will leave that to any constitutional law scholars or Federal Courts faculty out there reading this post.

In the patent world, the America Invents Act addressed structural problems in patent prosecution and litigation, including some changes intended to reduce the patent troll problem. Nothing’s ever perfect and it is important, in this area as in many others, not to let the perfect get in the way of the good, but overall the statutory response had a positive impact on excessive patent infringement litigation, at least anecdotally. And again, at least anecdotally, the statute seems to have done a reasonable job of balancing the interests of all concerned – from industries that rely on patents, to patent holders, to those whose patents were actually infringed.

There is probably, likewise, a similar statutory response to excessive class action litigation over ERISA plans that is available, that likewise properly balances the benefits to participants of court access with the risk to plan sponsors of excessive class action litigation. It is important to remember that the central conundrum in addressing the problems caused by excessive class action litigation involving ERISA plans is finding the right balance, the sweet spot if you will, between protecting participants’ ability to seek court redress, including in circumstances that can only be resolved through class action litigation, and avoiding the harms of excessive class action litigation, such as – to borrow from my past life in IP litigation – strike suits intended solely to trigger a settlement payment and lawyers’ fees.