I can still remember the first hearing I argued at, close to twenty five years ago, in Massachusetts Superior Court, in the very quaint (realtor speak for old, but still) courthouse in Dedham – I can still see the dusty parking lot out back, the old wood banisters separating the lawyers from the public area, and the close quarters among the lawyers, clerks and judge that are typical of courthouses of that vintage. Sure, I remember the argument too, which I won – it was an insurance coverage dispute over whether a voluntary payments clause barred coverage of a settlement in a trade dress infringement dispute between two Boston area businesses.

But it is interesting to me that what I most remember of that day are the sights and smells, the sensations, and the like, of being in court that day (along with the fact that I won; like many lawyers, I suspect, I tend to forget the losses but remember the wins). Yet, what I remember most about the first time I appeared in court to argue an ERISA case, close to 20 years ago at this point, had nothing to do at all with any of those types of sensations: what I remember most is that the lawyer for one of my co-defendants, a young (though still senior to me at the time) partner at a major firm, showed up at the hearing with a trial bag full of ERISA treatises, which he then arranged on the table in front of him before his argument. Now I know most of those treatises, as I can look across my office at my bookshelf and see them sitting there, and many of them are very good, but for detailed research and analysis work; none of them are really suited to being flipped open for a quick, summary answer on a litigation question, such as the kind that might arise in a courtroom itself, or for a quick consult in the few minutes one has to respond quickly to a client’s e-mail.

For years, I have looked for the type of resource that would serve well in that role, and I have at least skimmed the marketing materials for most of the major ERISA works out there as part of my search, but I never found a real fit – until now. One of the many benefits of blogging is that, on occasion, I luck into receiving a review copy of a book on ERISA or insurance coverage, and this time around it was the ERISA Benefits Litigation Answer Book 2013, edited by Jenner & Block’s Craig Martin and Amanda Amert, that landed on my desk. Published by PLI, it truly fits that niche – the handy dandy quick answer guide to litigation issues that arise in ERISA cases. Now, I am not sure it is the right book for a neophyte ERISA litigator, in that it provides – deliberately so – summary answers to questions that arise in this area, and thus requires a certain level of experience and expertise on the part of the reader; without that background, a reader cannot place a short answer in context, and understand what further analysis is needed beyond the summary answer. However, for the experienced lawyer who needs a quick but clearly accurate answer under time pressure, or the general practitioner or in-house lawyer who needs a starting point before turning to an outside expert on the subject (for instance, to determine the nature and viability of a claim against the company and to form the necessary background to discuss the claim intelligently with outside counsel), I can think of no better book out there at the moment.

Interestingly – to me anyway, because I have never noticed it before – there are two separate book groupings in my office. Across the room, on a bookshelf that I have to get up from my desk to reach, are the major treatises, copies of the “Annual Review of Banking Law” that I edited in law school (so long ago that, believe it or not, we published it on a Wang word processing system), and author copies of journals in which my work has been published. Right behind me though, on a credenza for easy reach, are books that I refer to all the time, such as the state and federal rules of civil procedure, an excellent summary of the federal rules of evidence from a seminar I attended many years ago, and Randy Maniloff’s great handbook on General Liability Insurance Coverage (the last, I just noted, rife with sticky notes on multiple pages). I have already put Martin and Amert’s PLI book with them.
 

The equitable remedies prong of ERISA was, for many years, a place where theoretically good claims went to die: courts were wary of providing expansive recovery under it, and thus a plaintiff who could not fit a claim within the confines of the denial of benefits or breach of fiduciary duty causes of action under ERISA was unlikely to recover by relying on the equitable remedies prong, no matter how factually compelling the plaintiff’s case. As I explained in my recent article, “Looking Closely at Operational Competence: ERISA Litigation Moves Away from Doctrine and Towards a Careful Review of Plan Performance,” recent case law, including from the Supreme Court, has completely changed this dynamic, and made equitable relief a viable manner of targeting harms arising from ERISA governed plans when those harms could not support claims for denied benefits or for fiduciary breach.

A decision last week out of the United States District Court for the District of Rhode Island, Blue Cross & Blue Shield of Rhode Island v. Korsen, provides an outstanding roadmap for making out an equitable relief claim under ERISA in 2013, after the lay of the land for such claims was revamped by the Supreme Court in Amara. You can do worse – much worse – than to follow the judge’s framework to determine whether you have a viable equitable relief claim and, if so, the best way to present each element.

In addition, though, the Court touched on a fundamental issue in equitable relief litigation under ERISA, which has engendered some controversy over the years, namely, is the outcome of equitable relief claims under ERISA dependent solely on whether the precise elements of such claims as set forth in Supreme Court decisions exist, or can courts go beyond those and rely on the general and long standing principles of equity to decide such claims? In short, do such claims rise or fall only on whether the exact principles detailed in the Sereboff line of cases and Amara are met (such as the recovery is one allowed in the days of the divided bench, and a designated fund is being targeted)? Or can the court, even if these elements are satisfied, still reject such claims if needed to “do equity,” in the old vernacular – i.e., to be fair?

The Court in Korsen gives a compelling argument for the latter.

And finally, by the way, in the old – and I was hoping by now discarded – vernacular, a hat tip to @Jon Pincince for bringing the case to my attention.
 

There is much uproar at the moment over the possible expansion of fiduciary status to include appraisers, whose work includes valuing the assets held by the participants in ESOPs. Appraisers understandably do not want to assume that status, with its potential to turn them into defendants in ESOP breach of fiduciary duty litigation under ERISA; at a minimum, it opens them up to incurring defense costs (or the premium costs of insuring against that risk) from being named as a defendant. Personally, though, the risk seems to me to be overstated: appraisers will have to price that risk into their services, driving up the costs of operating an ESOP somewhat, but they are certainly not going to abandon the business, as some critics of this possible change have claimed. It’s a substantial business, providing appraisal services to ESOPs, and it is hard to imagine all the appraisers in America walking away from that work simply because of this risk, and the need to factor it into their pricing.

That said, however, I don’t believe it is necessary, or warranted, to expand the definition of fiduciary to capture appraisers of ESOP assets. I discussed this issue in depth in a presentation over a year ago to the New England Employee Benefits Council, as well as in a latter article in the Journal of Pension Benefits. Put simply, the structure of fiduciary responsibilities and liabilities that currently exists under ERISA is, in my view, sufficient to protect participants against problems with appraisals, and protecting participants from any such problems does not require turning appraisers into fiduciaries. I discussed this point, and my reasoning, in detail in this article.
 

Years ago, I worked with a client who liked to tell the story of having begun working with ERISA governed plans right after ERISA was enacted. He had been told by his bosses that there is this “new law,” and you are in charge of issues arising under it. That “new law,” of course, was ERISA. Little could he have known at that time that this “new law” would grow up, by force of preemption and the size of the benefits market, to control and govern an overwhelming slice of American life.

One of the stories I remember him telling me is about early attempts to determine whether something was or was not a governmental plan. Governmental plans, you may recall, are not subject to ERISA. Back then, as he told the story, he and others in the industry applied an “if it looks like a duck, walks like a duck and talks like a duck “ test, meaning if it looked and felt like the plan related to a governmental entity, than it was a governmental plan. It was as good a standard as any, as you have to remember that, at the time, the extensive body of case law that now exists concerning ERISA plans had yet to be created.

Well, now we know better, after years of court decisions concerning ERISA plans, including whether or not a plan constitutes a governmental plan. Mike Reilly, over at the Boom blog (I just like writing Boom blog, for some reason), has the latest word on the subject, and on how, today, we determine whether or not a plan is a governmental plan. Hint: it’s a lot different and more technical than seeing if it walks like a duck.
 

I don’t want to turn this into a sports law blog, or – heaven forbid – an NFL blog (heaven knows, there are more than enough of those), but the latest work of the Washington Post on player injuries was too good to ignore. I promise, after this one, I will go back to ERISA and insurance blogging. However, those of you who have read me for awhile on the real subjects of this blog know that I am a fan of data. You want to convince me of something, show me data, and your reasoning, sources and the methodology behind it; I have little use or interest in argument by anecdote.

In “Do no harm: Retired NFL players endure a lifetime of hurt,” their latest article on the NFL’s problem with seriously injured players, the Washington Post’s Sally Jenkins, Rick Maese and Scott Clement detail survey findings as to the post-career injuries and physical conditions of retired NFL players. You should read it – the findings should be enough to dissuade anyone from continuing to think that retired NFL players with serious health issues are the outliers, rather than the norm. I often think that the articulate, well-dressed, well-off, clearly not that injured retired players on ESPN’s pregame shows and the other network’s football shows leave us with the impression that they, and not the injured and complaining retired players, are representative of the population of retired players. The Post’s survey data should make clear that is not the case.

To me, the most interesting aspect of the story is the players’ refrain that they constantly felt it necessary to play while injured (and with injuries serious enough that most of the general population would be out on long term disability benefits if they suffered from them) out of fear they would lose their jobs otherwise. The reason for this, they consistently explain, is the fact that NFL contracts are not guaranteed, and thus, if they lose their roster spot, they lose their livelihood. The Post quotes one former player thusly: “If you don’t play, they don’t pay. You will get cut if you are not on the field. That is why we play through injuries: we have to feed our families.”

Frankly, the fear that ownership will terminate them if they are injured and can’t work sounds more like an issue from late nineteenth century mining in this country than from a modern workplace (if you have ever read J. Anthony Lukas’ “Big Trouble,” than you know what I am talking about; if you haven’t read it, you should). And its easily fixed – just make NFL contracts guaranteed, like they are in other major sports, and the fear of losing their paychecks that drives players to play while seriously injured disappears.

In the Post’s series of articles and in articles elsewhere on the subject, NFL representatives claim they are working to make the game safer and to better take care of players and retired players, but point out that it is slow work. The Post’s article includes a discussion of this point:

The league is also conducting an ongoing campaign to reform what executives say is a “culture” of playing through pain.“That culture has existed and it needs to change,” said NFL Executive Vice President Jeff Pash. “That is a big part of what Commissioner [Roger] Goodell is trying to do. We’re trying to move toward a player safety culture. It’s going to take time, but I think we’re making progress, seeing them being more honest about their injuries.”

Making contracts guaranteed can be done almost instantaneously, and would significantly alter the culture of “playing hurt.” The NFL often likes to hide behind the collective bargaining agreement (“CBA”) as a reason why certain things can or cannot be done: I have little doubt though, that even to the extent changing to guaranteed contracts might relate to the CBA, that the players would agree pretty much immediately to amend the CBA to allow them, or even better, to mandate them.

I will tell you one thing. If I was representing the retired players in any of the class actions being prosecuted against the league for safety related issues, the first thing I would do when the Commissioner or anyone else testified that they were working to improve the situation, is cross them on why, if that’s true and the jury should believe them on that, they still don’t have guaranteed contracts that would give players some security in deciding to sit out when injured.
 

I don’t think there’s a better sportswriter working regularly right now than Sally Jenkins, whose sportswriter father, Dan Jenkins, is personally responsible for my decision, more than a quarter century ago, to attend law school: his sportswriting was so strong, so funny, that it made it obvious that I would have been out of my league if I had instead followed my interest in sports and gone into sports journalism. In this piece here, Jenkins – Sally, not Dan – thoroughly reviews the question of medical care for seriously injured football players, when the care is required decades after they stop playing professional football. What is most interesting to me is that the NFL is defending claims – using statute of limitations and other arguments – that threaten to force the costs of such medical care into the great empty space that lies in between disability coverage on the one hand, employer provided health insurance on the other hand, and workers compensation benefits on the third hand (I know that’s a weird, three-handed person, but if you think about it, the whole idea of a hugely profitable industry like the NFL leaving its employees to bear their own health care costs, when they stem from employment, is at least as bizarre and odd as that image). As Jenkins explains, the NFL denies the vast majority of disability benefit claims under its disability plan, and team owners and the NFL itself are aggressively disputing workers compensation claims filed by former players (i.e., former employees) alleging serious physical injuries from their playing days and accompanying massive medical bills. As Jenkins also explains, if there is no coverage for these medical bills through either of those systems, the only other place for those former employees to turn is Social Security disability or Medicare. And this isn’t just Jenkins talking, or the sales pitch of lawyers for the former players: “a 2008 congressional research report on NFL disability” backs up her reporting on this issue.

Whether people generally understand it or not, and whether the NFL and team lawyers and other representatives quoted in Jenkins’ article know it or not, most lawyers are aware of the general, historical basis for workers compensation schemes, and of the underlying tradeoff on which they are based: in exchange for abandoning the tort system as a means of remedying employment related injuries, employees are given an essentially assured, but limited, recovery for injuries caused by their employment. The NFL players discussed in Jenkins’ article thus either are entitled to workers compensation benefits (or should be, absent gamesmanship by the NFL of the type depicted in her article) for their injuries, or their injuries must be deemed to fall outside of the scope of the workers compensation system, with the former players allowed to seek recovery in the court system from the NFL and their former teams for the injuries from which they suffer. There really is no other appropriate understanding of the proper operation of the intersection of the judicial and workers compensation systems in this context, unless the NFL is going to step up to the plate (I know I am mixing my sports metaphors here) and accept responsibility for the medical care under its disability plan.
 

There have been many nice benefits to writing this blog for several years, ranging from the fun of writing it to the pleasure of meeting others with similar interests. For me professionally, though, probably the most important benefit has been the constant flow across my desk of key court decisions, articles and thought pieces on developments in ERISA law, which has helped (and sometimes forced) me to stay constantly up to date on the latest developments in my area of expertise. However, that benefit has come with a complication, which is that the steady stream of information on ERISA that crosses my desk each day includes far more useful information and material than I could ever hope to discuss, and pass along, on this blog. This is particularly the case because I have never been willing to use this blog as a place simply to post other people’s work, but instead typically only post when I believe I have something independently useful to say about someone else’s article or blog post, or about a court decision, or the like.

This has meant, however, that for years, large amounts of quality work discussing ERISA issues has sat on my desk, reviewed only by me and not passed along, despite the value of much of that work. It has always bothered me when an article or decision worth passing along has come in front of me, but that I would not be able to discuss in a blog post, either because I was posting on a different issue, or because of the crush of my real job (which is litigating these and other types of disputes).

Eventually, though, light dawned on Marblehead, and I realized I could solve the problem by using Twitter for one of its originally expressed purposes, as a microblogging tool, and tweet articles, comments, decisions and the like that I believed to be of value, but which I did not expect to discuss in a full blown blog post. I have been doing so for awhile now, and have taken to regularly passing along relevant ERISA news that will not make it onto the blog. You can follow me, and my running list of interesting ERISA information, at @SDRosenbergEsq.
 

For years, in speeches and articles, I have preached the gospel of what I have come to call “defensive plan building,” which is the process of systemically building out plan documents, procedures and operations in manners that will limit the likelihood of a plan sponsor or fiduciary being sued while increasing the likelihood that, if sued, they will win the case in the end. Over the past couple of years, doctrinal shifts related to remedies available to participants under ERISA have made defensive plan building even more important, for at least two reasons. First, these shifts have expanded the range of potential liabilities and exposure in offering, and running, a benefit plan. Second, these developments have, to a significant degree, given rise to an increased focus in ERISA litigation on the actual facts concerning the plan’s activities, as the lynchpin of the liability determination. The combination of expanding liability risks with an increased focus on plan actions makes it more important than ever to focus on the steps of defensive plan building, including by focusing on operational competence in running a benefit plan.

I discussed this concept in much greater detail in my recent article in the Journal of Pension Benefits, “Looking Closely at Operational Competence: ERISA Litigation Moves Away from Doctrine and Towards a Careful Review of Plan Performance.” The article discusses how the last several years of ERISA litigation, including in particular the Supreme Court’s recent activism in this realm, has created this phenomenon. You can find a much more fully realized presentation of these points in the article.
 

I have often joked that, to seem intelligent at social events, a person really just has to have two things handy – the first, a Noam Chomsky reference, and the second, a Shakespeare quote, preferably from a lesser play. If you are good, you can find a way to fit one or the other into any subject of conversation. Personally, I rely on “there are more things in heaven and earth than are dreamt of in your philosophy” (which I also find is often an especially good rejoinder in court to legal arguments proffered by opposing counsel), and Chomsky’s media coverage study, when I am trapped in a conversation with no way out, but to each his own.

I was thinking of this when I read the Workplace Prof’s excellent and extensive blog post on the two latest developments at the Supreme Court concerning ERISA law, the first being the very recent decision in US Airways v. McCutchen, which I suspect will soon be reduced to the defense assertion that courts must always apply the plan terms as written, and the Court’s grant of cert in Heimeshoff v. Hartford, on the application of statute of limitations to benefit claims under ERISA. You don’t have to really study the source material on either of these cases to hold forth on them at this point, because you can just read the Prof’s post, and be all set to pontificate on them without a problem. Less tongue in cheek, it really is worth reading, if you want to understand, with a limited investment of time, what these two cases are about and why they matter.

I would also throw in, with regard to the opinion in McCutchen, two additional comments that you can borrow, if you really want to look erudite without doing any homework on your own first. One, it really is a well-written piece of work, taken simply as an example of the written form in the legal context, without regard to how one may feel about the merits of the decision. I would suggest it to connoisseurs of the form for a read, under any circumstances. Second, the case, although an ERISA decision, has an easy transition to the doctrines of insurance law, where subrogation and the impact of the common fund doctrine are in play on a routine basis; it adds additional support for any argument that the common fund doctrine should always apply in that circumstance. In this regard, feel free to drop a knowing reference to footnote 8, if you really want to appear in the know.
 

A few more thoughts to round out my run of posts (you can find them here and here) on the Ninth Circuit’s opinion in Tibble. First of all, where does revenue sharing go as a theory of liability at this point? The Ninth Circuit essentially eviscerated that theory, and I doubt it has much staying power anymore, at least as a central claim in class action litigation. Revenue sharing hasn’t, generally speaking, had much traction in court, and I think it is because, at some level, judges understand that someone has to pay for the plan’s operations. That said, you should still expect to see it as a claim in cases against DC plans and their vendors, even if only as a tag along, with liability only likely to follow in cases where someone comes up with a smoking gun showing that the plan sponsor acted in ways harmful to participants specifically because of a desire to save money for the plan sponsor through its revenue sharing decisions. But revenue sharing in and of itself as an improper act or a fiduciary breach that can warrant damages? Probably not much of a future for such claims.

Second, there is a lot of talk about the expansion of litigation against DC plans and their providers, and has been for sometime now. How does that fit with the minimal recovery by the class in Tibble? To some extent, Tibble, although affirming a trial court award to the class, is not much of a victory, given that the class only recovered a few hundred thousand dollars. In fact, to call it a victory for the plaintiffs, while correct , reminds me of nothing so much as the comment of British General Henry Clinton after the Battle of Bunker Hill, when he noted, given the extent of British casualties, that “"a few more such victories would have surely put an end to British dominion in America." Likewise, a few more victories similar to this one for class plaintiffs in excessive fee cases will put an end to this area of litigation quicker than anything else could, as these types of cases simply would no longer be worth the costs and risks to the class action plaintiffs’ bar. However, it is important to remember that the dollar value of the recovery in Tibble was likely driven down substantially by the statute of limitations ruling, which took much of the time period of potential overcharging out of the case and with it, presumably much of the recovery. If participants bring suit over fees closer to the time that the investment menu that included the excessive fees was created, they will not face that barrier to recovery and the likely recovery could easily be high enough to justify the risks and costs of suit. This, interestingly, is where fee disclosure should come into play – participants, and thus the plaintiffs’ bar, should have enough information about fees to bring suit early enough to avoid the statute of limitations problem that impacted the plaintiffs in Tibble. As a result, there should be more than enough potential recovery in many possible excessive fee cases to motivate plaintiffs’ lawyers to pursue the claims.