US Airways v. McCutchen

A win for the good guys – US Airways v. McCutchen, No. 10-3836, (3rd Circuit Nov. 16, 2011)

Thank you Professor Roger Baron for this summary on McCutchen  http://erisawithprofessorbaron.com/

US Airway v. McCutchen (Major congratulations to Matt Wessler & Leslie Brueckner of Public Justice for “going where no man [or woman] has gone before” in terms of advocacy, on behalf of a severely injured ERISA participant, in this case! Matt orally argued this case. Both Matt and Leslie were on the brief.) The ERISA participant in US Airways v. McCutcheon, No. 10-3836, (3rd Circuit Nov. 16, 2011), was “grievously injured and survived only emergency surgery.” The ERISA plan, seeking reimbursement of $66,864 paid in medical bills sued for 100% of the net tort recovery of “less than $66,000” secured by the participant. The trial court granted summary judgment for the ERISA plan, awarding it $41,400 held in a trust account and further ordered the participant to pay $25,366 personally. This 3 judge panel decision by the 3rd Circuit is unanimous and it holds that the lower court’s ruling was “inappropriate and inequitable” as those words are found in ERISA § 503(a)(3) because the recovery “exceeds the net amount of McCutcheon’s third-party recovery, thus undermining the entire purpose of the Plan.” The panel decision further states that the court’s ruling “amounts to a windfall for US Airways.” This decision abrogates the 3rd Circuit’s prior three cases on this issue and also squarely rejects the holdings and logic of decisions found in other circuits, including the 8th Circuit’s Shank decision and the 11th Circuit’s O’hara decision. A rather notable line from this opinion is, “US Airways cannot plausibly claim that it charged lower premiums because it anticipated a windfall.” Another notable line is that the lower court’s ruling is inequitable because “Equity abhors a windfall. [citing a 1989 2nd Circuit opinion.]”

US Airways v McCutchen 3rd Circuit

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