In the case of Great-West Life & Annuity Insurance Company v. Janette Knudson and Eric Knudson, 2001, the Supreme Court ruled in favor of the defendants (the Knudsons). The dispute arose when Great-West sought reimbursement from a settlement received by Janette after she was involved in a severe car accident. According to their health plan agreement with her employer, they claimed that any funds recovered from third-party lawsuits should be used to offset medical expenses paid out by them. However, most of these funds were placed into a special needs trust for future medical care rather than given directly to Janette. The court held that under Employee Retirement Income Security Act (ERISA), an insurer could not enforce equitable liens against general assets but only specific traced funds within defendant's possession and control - which did not apply here as majority of settlement money went into trust fund outside her immediate control.

In the dissenting opinion for Great-West Life & Annuity Insurance Company v. Knudson, Justice Stevens argued that the majority's interpretation of "equitable relief" was too narrow and inconsistent with precedent. He contended that Congress intended a broader understanding of this term when it enacted ERISA (Employee Retirement Income Security Act), which is meant to protect employee benefits. The majority's decision, he believed, undermines this purpose by limiting the remedies available to fiduciaries seeking reimbursement from beneficiaries who have recovered their losses from third parties. In his view, such reimbursements should be considered equitable because they prevent unjust enrichment and are consistent with traditional principles of equity jurisprudence.