This case looks like it is going the way of most remedy cases – a debate between the literalist and remedialists on the court. The literalists (Roberts, Alito, Scalia, and Thomas) think that the statutory provision is clear and there shouldn’t be a separate standard of review for conflicts. The remedialists (Stevens, Souter, Breyer, and Ginsburg) believe that the common law of trust must inform the meaning of ERISA’s remedial sections because that is where ERISA derives from.
Paul Secunda, WorkPlace Prof Blog
Paul kindly furnished me with his prediction on the MetLife case and it is going to be interesting to see how he makes out on this. Here’s Paul’s view:
Here goes nothing: 4-1-4 remedialists with a controlling concurrence by Kennedy. He seems to want to provide for a compromise by providing for certain procedural mechanisms an employer can take (a la Faragher and Ellerth) to avoid liability.
In my opinion, the notion of internal firewalls and protections hinted at by Justice Kennedy shows a failure to understand the practical realities of insurance company claims administration. Moreover, Justice Roberts conflates insurance company administration and employer self-funded claims administration in his comments. I doubt anything definitive will come of this case and that we will have at least one footnote (probably by Justice Roberts) that will spawn endless speculation.
See Brian King’s analysis here:
Insurers want to say either that the conflict is so slight it doesn’t need to be factored into the judiciary review at all or that the claimant must show specific facts demonstrating a substantial conflict in the particular case before the court before anything other than an arbitrary and capricious standard of review should be used. Claimants argue that the inherent conflict is so significant that every case should be reviewed de novo rather than with any degree of deference to the insurer’s decision. The Court is struggling to find out if there is something workable to put in place that is in between those two ends of the spectrum.
Suzanne Wynn appears to share my doubts about the efficacy of the oral argument:
The transcript is an excellent read of how oral argument before the Court can go horribly wrong for some attorneys. The Justices were very active today, and the questioning itself is well worth reading. The depth of questions from the Justices is more than matched by the number of questions and the rapidity of questioning. The first 20 pages of the transcript is a lesson within itself of how an attorney can manage not to complete a sentence when being questioned by the Justices
Postnote – I’ll venture that the Court will come back with a close to majority opinion though I still don’t think the opinion will settle that much. I think Paul’s “literalists” will make the compromise to get something firm for the lower courts to look at on this issue, and it will be rooted in trust law that is sufficiently vague that a consensus can be formed with each seeing what they wish to see in the final opinion (and footnotes narrowing conclusions where needed to permit agreement in the main opinion).