Board of Trustees of the National Elevator Industry Health Benefit Plan v. McLaughlin
590 F. App'x 154
3rd Cir.2014Background
- McLaughlin, an ERISA Plan participant, received about $47,590 in medical benefits from the Plan after a January 2009 ATV accident.
- The accident gave rise to third-party tort claims that later settled in December 2011.
- The Plan’s terms grant the Plan a right of first reimbursement out of any recovery and treat benefits as an advance that must be reimbursed from third-party proceeds.
- The Plan reserves the right to subrogation and may deduct reimbursement from future benefits until fully satisfied.
- The district court granted summary judgment for the Board, holding the Plan has an equitable lien by agreement under Sereboff and that the New Jersey Collateral Source Statute (NJCSS) is pre-empted by ERISA; McLaughlin appeals challenging these rulings and other defenses.
- The Court affirms, holding the Plan language creates an equitable lien by agreement and that the NJCSS does not bar reimbursement, with other defenses rejected.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Plan creates an equitable lien by agreement against the tort recovery. | McLaughlin argues there is no nexus between funds received and medical expenses. | Board argues the plan language authorizes recovery from the entire third-party proceeds regardless of allocation. | Yes; the Plan language creates an equitable lien by agreement. |
| Whether NJCSS pre-emption affects the Plan’s right to reimbursement. | McLaughlin argues NJCSS precludes recovery of medical expenses. | ERISA pre-empts NJCSS or, at minimum, the plan language still governs recovery. | Plan language governs; NJCSS does not bar reimbursement; ERISA pre-emption acknowledged but not necessary to decide. |
| Whether McLaughlin adequately defended against reimbursement due to laches. | McLaughlin argues laches bars suit. | No laches; Plan language obligates reimbursement. | Rejected; laches not applicable. |
Key Cases Cited
- Sereboff v. Mid Atlantic Medical Services, Inc., 547 U.S. 356 (U.S. Supreme Court 2006) (equitable lien by agreement on identified funds allowed under ERISA)
- US Airways, Inc. v. McCutchen, 133 S. Ct. 1537 (U.S. Supreme Court 2013) (plan's equitable lien by agreement governs recovery from entire third-party proceeds)
- Levine v. United Healthcare Corp., 402 F.3d 156 (3d Cir. 2005) (ERISA pre-emption of state collateral-source rules noted)