U.S. Airways, Inc. v. McCutchen
133 S. Ct. 1537
SCOTUS2013Background
- ERISA health-plan reimbursed McCutchen $66,866 for medical expenses after a third-party car crash.
- McCutchen recovered $110,000 from the third party and his own insurer, netting $66,000 after a 40% contingency-fee to his lawyers.
- US Airways sought reimbursement of the $66,866 via an equitable lien by agreement under ERISA §502(a)(3).
- McCutchen argued reimbursement should be reduced by 40% (to cover fees) and that unjust-enrichment rules should limit recovery.
- The District Court granted summary judgment for US Airways; the Third Circuit vacated, applying unjust-enrichment defenses to override the plan.
- The Supreme Court held that ERISA plan terms govern in a §502(a)(3) action seeking an equitable lien by agreement, and that common-fund principles may inform interpretation when the plan is silent.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Can equitable defenses override ERISA plan terms in §502(a)(3)? | McCutchen: double-recovery and unjust enrichment principles limit plan terms. | US Airways: plan terms should govern; equitable defenses do not override contract. | No; plan terms govern and cannot be overridden by equitable defenses. |
| Does the common-fund doctrine fill gaps when the plan is silent about attorney fees? | McCutchen: common-fund should reduce US Airways’ reimbursement or allocate fees. | US Airways: common-fund should not affect plan-based reimbursement unless plan is silent on fees. | Yes, common-fund informs interpretation when the plan is silent; it does not override clear plan terms. |
Key Cases Cited
- Sereboff v. Mid Atlantic Medical Services, Inc., 547 U. S. 356 (U.S. 2006) (equitable lien by agreement; enforces plan terms through §502(a)(3))
- Mertens v. Hewitt Associates, 508 U. S. 248 (U.S. 1993) (§502(a)(3) limited to relief to enforce terms of the plan)
- Boeing Co. v. Van Gemert, 444 U. S. 472 (U.S. 1980) (common-fund rule as a backdrop for fee allocation)
- Sprague v. Ticonic Nat. Bank, 307 U. S. 161 (U.S. 1939) (historical roots of equitable doctrines and fees)
- Firestone Tire & Rubber Co. v. Bruch, 489 U. S. 101 (U.S. 1989) (ERISA plan interpretation and default principles)
- Barnes v. Alexander, 232 U. S. 117 (U.S. 1914) (contract-based relief and enforcement principles)