Civil litigators ask: Did the Supreme Court flunk constitutional law?

The winner or loser of litigation under the Employee Retirement Income Security Act (ERISA) is frequently determined by whether the judge must give “deference” to the employer’s insurance company when it decides an employee’s claim under a retirement plan.  An example from one of my cases is helpful.

Ruling for the employee, but only after first finding that deferential review of a disability benefit claim denial was not required, I was able to get to the merits. The facts were astonishing: “Frankly, it is hard to know where to begin. How [the insurance company] could conclude that a heart attack and stroke victim in his early fifties could work full-time even at seated work, when he was literally half blind, had serious vascular problems, and suffered severe pain that deprived him of normal sleep, is beyond me.”

And that brings me to the title of this post. The title comes from a fascinating and provocative new piece about ERISA litigation written by Jonathan M. Feigenbaum and Scott M. Riemer. See Did the Supreme Court Flunk Constitutional Law When It Permitted Discretionary Review of Insured ERISA Benefits Cases.

The authors set the stage this way:

In the 1983 comedy Trading Places the amoral Duke
brothers conduct an experiment in social Darwinism
debating whether genetics or nurturing is the source of
success. They make a wager, and then put their theories
to the test. They manipulate the life of Louis Winthorp
III (Dan Akroyd), a successful commodities trader,
by “trading places” with Billy Ray Valentine (Eddie
Murphy), a street con artist.

We’ll bet the same amount wagered by the Duke
brothers with our readers – identify any litigation in
the federal courts between private litigants, other than
discussed in this paper, where the Article III Judge must
defer to the decision of the defendant without conducting
a full trial on the merits. We bet you can’t.

The authors then explain in detail why they believe that judicial deference accorded the decisions of insurance companies under ERISA, as interpreted by the Supreme Court, is both unconstitutional and unjustified. If you handle civil litigation in the federal courts, chances are you will have an ERISA case. If so, this article is a “must read.”


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