Attorney Secured a Tort Recovery

An Illinois PI attorney secured a tort recovery for an ERISA beneficiary

We would like to thank Professor Roger Baron for the following:

In Trustees of the Carpenters’ Health &Welfare Trust Fund v. Darr, No. 10-1682 (7th Cir., decided August 21, 2012), we find that an Illinois PI attorney secured a tort recovery for an ERISA beneficiary.  His attorney fee was to be 1/3 of the amount recovered.  The PI attorney paid the full amount of the ERISA lien assertion of $86,709.73 so as to prevent the plan from terminating health care coverage for the beneficiary.  But, then he filed suit in Illinois state court against the fund seeking enforcement of Illinois’ “common fund” doctrine. He sought to collect his 1/3 of the ERISA Plan’s portion, $28,903.25.  The ERISA Plan then filed a separate action in federal court and secured a permanent injunction against the PI attorney and beneficiary from proceeding with the state court action.  On appeal, the 7th Circuit Court of Appeals vacated the injunction, holding that the trial court was prohibited by the federal Anti-Injunction Act, 28  U.S.C.  § 2283, from issuing such an injunction against a state court.  The Anti-Injunction Act provides as follows:

A court of the United States  may  not  grant an injunction to stay proceedings  in a State court except  as expressly authorized  by Act of Congress, or where necessary in aid of its jurisdiction, or to protect or effectuate its judgments.

This opinion recognizes that the stated exceptions to the Anti-Injunction act are to be interpreted “narrowly” and that ERISA does not provide an exception to the Anti-Injunction Act under these facts.  This opinion states, inter alia, as follows:

[the attorney’s] state court  common fund claim for attorneys’ fees is too removed from the core federal interests represented by ERISA…

And

plan terms about a matter tangential to  core federal interests are not a  sufficient basis for an injunction against a state law claim simply because the state law claim may  trigger  a liability the plan intended to place on beneficiaries.

This is a unanimous decision, authored by Judge Tinder, for the three-judge panel consisting of Judges Kanne, Williams and Tinder.

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