Term: 2015
Docket: 14-723
Montanile v. Bd. Of National Elevator Industry Health Benefit Plan
- Pro
14-723 MONTANILE V. BOARD OF TRUSTEES OF NEIHBP DECISION BELOW: 593 Fed.Appx. 903 CERT. GRANTED 3/30/2015 QUESTION PRESENTED: This petition presents a single question about the meaning of an important remedial provision of the Employee Retirement and Income Security Act of 1974 ("ERISA"). Eight of the thirteen circuits have squarely and openly disagreed over the question presented. The result is a widely acknowledged 6-2 circuit split. In a recent invitation brief, the United States acknowledged the (then) 5-2 circuit split and endorsed the minority position. Brief for the United States as Amicus Curiae, Thurber v. Aetna Life Ins. Co., 134 S.Ct. 2723 (May 6, 2014) (No. 13-130). The government recommended denial, however, solely on vehicle grounds. Id. at 15-20. The petition was denied. The question presented by this petition is: Does a lawsuit by an ERISA fiduciary against a participant to recover an alleged overpayment by the plan seek "equitable relief" within the meaning of ERISA section 502(a)(3), 29 U.S.C. § 1132(a)(3), if the fiduciary has not identified a particular fund that is in the participant's possession and control at the time the fiduciary asserts its claim? LOWER COURT CASE NUMBER: 14-11678
In the case of Montanile v. Board of National Elevator Industry Health Benefit Plan, Robert Montanile was sued by his health plan for reimbursement after he received a settlement from a drunk driver who had caused him injuries. The health plan argued that it was entitled to reimbursement under the terms of the Employee Retirement Income Security Act (ERISA). However, Montanile spent most of his settlement on non-traceable items before the lawsuit began. The Supreme Court ruled in favor of Montanile in an 8-1 decision, stating that when a participant or beneficiary dissipates the whole settlement on nontraceable items, like services or consumables, then ERISA plans cannot attach those funds because they are not part of “particular funds” within defendant’s possession as required by ERISA enforcement provision section 502(a)(3). Therefore, if an insurance company wants to ensure repayment from settlements won by their insured parties due to third-party harm-causing actions; they must act quickly and decisively.
In the dissenting opinion for Montanile v. Board of National Elevator Industry Health Benefit Plan, Justice Ginsburg argued that the majority's decision was inconsistent with previous rulings and allowed beneficiaries to undermine their reimbursement obligations by quickly spending settlement funds. She contended that the Employee Retirement Income Security Act (ERISA) should be interpreted to allow health plans to seek reimbursement from a beneficiary's general assets when specifically identifiable funds have been spent. This interpretation would better serve ERISA’s objectives of promoting plan solvency and ensuring prompt payment of benefits. Furthermore, she noted that allowing beneficiaries to evade repayment by spending settlement money on nontraceable items could encourage reckless spending and lead to increased insurance costs for all participants in group health plans.
