Amicus Curiae Brief — Sereboff v. Mid Atlantic Medical Services, Inc.

FILED

(o)\ rere

No. 05-260 |_ SUPREME COURT. U.S. |

IN THE |

Supreme Court of the United States

JOEL SEREBOFF and MARLENE SEREBOFF,

~——- Petitioners,

Vv.

MID ATLANTIC MEDICAL SERVICES, INC.,

Respondent.

: On Writ of Certiorari to the

United States Court of Appeals for the Fourth Circuit

BRIEF FOR THE BLUE CROSS

BLUE SHIELD ASSOCIATION AS AMICUS

CURIAE SUPPORTING RESPONDENT

ANTHONY F. SHELLEY

Counsel of Record

ALAN I. HOROWITZ

LAURA G. FERGUSON

MILLER & CHEVALIER

CHARTERED

655 15th Street, NW, Ste. 900

Washington, D.C. 20005

(202) 626-5800

TABLE OF CONTENTS

: Page

TABLE OF AUTHORITIES .....cccsccccscscccssescosseescccseccssescossess ii

INTEREST OF THE AMICUS CURIAE vcccosecccsssscssseecsosseee

- SUMMARY OF ARGUMENT ueccsecccscsccssesccsssescssecesseecesseceve 3

EIT A ELD T OAT LE: 5

A. ERISA’s Enforcement Pro\ isions Are Central to

the Statutory Scheme and Provide for the

Enforcement of All ERISA Plan Terms........................ 6

B. ERISA Reimbursement Provisions Are Enforceable

Under § 502(a)(3) If the Criteria Set Forth in

BREEN Sree ar 7

C. Violations of ERISA Plan Reimbursement

Provisions Cannot Be Remedied Under

SET ELA STN RT ce AOA Sn ee eT 10

D. In Accordance with the Statutory Text and the

Strong Congressional Intent to Make Plan Terms

Enforceable, § 502(a)(3) Should Be Interpreted to

Authorize Causes of Action That Satisfy the

Ce cttintictnininnsnnescsseinssinitentnenincioneninness 13

aR iciienccnpesinnstsnistnnsinanapeestnnitebeiaumianienansacetinnn 14

ii

TABLE OF AUTHORITIES

CASES

Admin. Comm. of the Wal-Mart Assocs. Health &

Welfare Plan v. Willard, 393 F.3d 1119

SAE aETAy SEI iessaittsininsnrciintidieduintonptdnnigtiinmnisnsnendine

Admin. Comm. of the Wal-Mart Stores, Inc. Assocs.

Health & Welfare Plan v. Varco, 338 F.3d 680

CPR EY GD itnictiinisidsinintnienancenteditieimeineiuniinanantiin

Aetna Health Inc. v. Davila,

542 U.S. 200 (2004) ..ccccccosssccsscsssevessssssevecsensneveseen

Bombardier Aerospace Employee Welfare Benefits

Plan vy. Ferrer, Poirot & Wansbrough, P.C.,

354 F.3d 348 (Sth Cir. 2003) ......cccccccccssesseseeeeneens

California Div. of Labor Standards Enforcement

v. Dillingham Constr., N.A, Inc.,

ES ES

Curtiss-Wright Corp. v. Schoonejongen,

EES EE

Great-West Life & Annuity Ins. Co. v. Knudson,

Fe Ce Be QR iccscscsecesecenescsnausenscnspnosonensonesne

Ingersoll-Rand Co. v. McClendon,

ED GAs Ba ee etcrcenecceseocenncnsinetnnnsennsanssnevivinn

Kentucky Ass'n of Health Plans, Inc. v. Miller,

Fe Gs a Ga iscccnsencesstmsncnnnanenioevicsomememnens

Liberty Northwest Ins. Corp. v. Kemp,

85 P.3d 871 (Or. Ct. App. 2004).....ccceccscsseeseeseees

Massachusetts Mutual Life Ins. Co. v. Russell,

SEP Cs Ce ee i itrcnictninintnrennainnnvsncssianiinowinnes

~

sens 6, 13

ili

Mertens v. Hewitt Assocs.,

FOB U.S. ZOE (1DPS)...ncccrccrseccsccessscccescvesscvovseeees 4, 6,9, 13

New York State Conference of Blue Cross

& Blue Shield Plans v. Travelers Ins. Co.,

Be es Ce Ce i hcncecscisccsscteineneseoresnssessniienemninnnte 5,10

Pilot Life Ins. Co. v. Dedeaux,

ee ne Ce ccinsceneneeniancasniconsnonecssnnnsinnes anaes 4, 6, 10

Qualchoice, Inc. v. Rowland,

Bee Ce Gs BIO ccceesnccesercsenseceveceseminnnnnennveton 9

Rush Prudential HMO, Inc. v. Moran,

Be es Be i iccicnceienisnesscsaresceseosnsnesoovineasnanmnecesense 12

Shaw v. Delta Air Lines, Inc.,

EP Ce iacccecessnsesnrncssntscccscesessesenenecsestensesonnte 10

Varity Corp. v. Howe,

ee I CR ceccesnsnsseseninnncccssseniasevevessenseqcennenseets 13

Westaff (USA), Inc. v. Arce,

BPO Fe BOG Cn CD, BSED coriccsesvernenscersesccovesoscosasonsese 9

STATUTES

Employee Retirement Income Security Act,

BP UA. BE FGGE CO GIG, cececercesecesscnsnsosccsevcessonesccesesssoses 2

BF Sears OF EEL OD inincsnestunsctnecsnenseniactonnoessnesensnaneounoinnasoes 5

Ba Ear Ob IT Ricicsiinsnsesicccsesnicnsanensecnestensissnsetioeionnsatnnes 2

Fe ie Oe Pe scttcstnseniinmensensnnasememnenmnineneinnnnansonin 2

BP idle BED covcnsecescocccntssocnvsnsenenenssenicnstensesencsoccones 5

ae tn B PRS Pecsctecccvesesecsensscnseseessconscscosseseoses 6,7

Be se Ae Oe vcsienicncscnscnesseupensonnnsenncunaneneneginebone 6

Be Oe i csiniinicuncanesantnnesesceceinnnninanenss passim

Be ee ee ccetrnceciicessscinaionevndareanserntniessta 5, 10, 12

dS a ae nee 10

iV

MISCELLANEOUS

Restatement of Restitution § 160, Comment a (1936).............04.. 9

1 G. Palmer, Law of Restitution §§ 1.4, 3.7 (1978) .........:008 9-10

1 D. Dobbs, Law of Remedies § 4.3(1) (2d ed. 1993)............0084 9

IN THE

Supreme Court of the United States

No. 05-260

JOEL SEREBOFF and MARLENE SEREBOFF,

Petitioners,

Vv.

MID ATLANTIC MEDICAL SERVICES, INC.,

Respondent.

On Writ of Certiorari to the

United States Court of Appeals for the Fourth Circuit

BRIEF FOR THE BLUE CROSS

BLUE SHIELD ASSOCIATION AS AMICUS

CURIAE SUPPORTING RESPONDENT

INTEREST OF THE AMICUS CURIAE

The Blue Cross Blue Shield Association (the “Association’’)

is the trade association that coordinates the national interests of

the independent, locally operated Blue Cross and Blue Shield

Plans.' Together, the 38 member Blue Cross and Blue Shield

' In accordance with Rule 37.6, the Association certifies that

counsel for a party did not author this brief in whole or in part and

that no entity other than the Association, its members, or its counsel

made a monetary contribution to the preparation or submission of the

brief.

2

Plans provide health insurance benefits to more than 94 million

people — nearly one-third of all Americans — in all 50 states, the

District of Columbia, and Puerto Rico. The Plans offer a vari-

ety of insurance products to all segments of the population,

including large public and private employer groups, small

businesses, and individuals.

The Blue Cross and Blue Shield Plans are subject to regula-

tion under a variety of federal and state statutes, including the

Employee Retirement Income Security Act (“ERISA”), 29

U.S.C. §§ 1001 ef seg. This case concerns the extent to which

ERISA § 502(a)(3), 5 U.S.C. § 1132(a)(3), authorizes fiduciar-

ies administering ERISA plans to bring civil actions to enforce

reimbursement provisions in those plans. These provisions

_ require the plan participant to reimburse medical expenses paid

by the plan if the participant recovers money from a third party

responsible for the illness or injuries that gave rise to the medi-

cal expenses.

The Blue Cross and Blue Shield Plans administer or insure

ERISA plans that often include such reimbursement provisions.

The funds they collect help reduce the overall costs for provid-

ing ERISA benefits through the avoidance of duplicative

recoveries by the affected participants. That is, absent reim-

bursement, some plan participants would receive double

recoveries, at the expense of other plan participants, who nec-

essarily would experience higher premiums or reduced benefits

to compensate for the plan’s lost reimbursement income. If the

2 The plan “participant” is the employee or former employee

who is eligible to receive benefits under the employee benefits plan.

29 U.S.C. § 1002(7). The reimbursement provisions also apply to

plan “beneficiaries” — those individuals the plan or plan participant

designates as entitled to benefits as a result of their relationship with

the participant. See 29 U.S.C. § 1002(8). For simplicity’s sake, this

brief will use “participant” to refer both to participants and to benefi-

ciaries.

3

decision below is reversed, Blue Cross and Blue Shield entities

and others administering or insuring ERISA plans will have no

way to enforce reimbursement provisions, thus causing signifi-

cant negative financial consequences to ERISA plans and their

participants. Accordingly, the Association has a strong interest

in the outcome of this case.

Counsel for the parties have filed letters with the Clerk of the

Court providing consent to the filing of amicus curiae briefs

supporting either party.

SUMMARY OF ARGUMENT

ERISA § 502(a)(3) allows plan fiduciaries to bring a civil

action to obtain “appropriate equitable relief... to enforce...

the terms of the plan.” 29 U.S.C. § 1132(a)(3). In Great-West

Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204 (2002), the

Court, reaffirming earlier precedent, construed § 502(a)(3) to

authorize only those forms of relief that would have been

typically available in a pre-merger court of equity. The Court

further concluded that a plaintiff historically could seek restitu-

tion in equity “ordinarily in the form of a constructive trust or

an equitable lien, where money or property identified as

belonging in good conscience to the plaintiff could clearly be

traced to particular funds or property in the defendant’s posses-

sion.” /d. at 213.

The Fourth Circuit below, along with the Fifth, Seventh, and

Tenth Circuits, correctly construed ERISA § 502(a)(3) to allow

suits by plan fiduciaries to enforce reimbursement provisions

where the plan fiduciary has met the criteria for restitution in

equity set forth in Great-West. There is no reason for the Court

to retreat from that conclusion, and the court of appeals cor-

rectly concluded that the plan fiduciary’s Suit here met those

criteria. The funds are segregated in an account over which the

plan participant has control, and the funds belong in good

conscience to the plan by operation of the reimbursement

provision. That the plan fiduciary’s right to relief arises from a

plan provision does not negate the characterization of the suit

4

as “equitable,” so long as the fiduciary seeks relief in the man-

ner authorized in Great-West. Section 502(a)(3) expressly

allows fiduciaries to seek “appropriate equitable relief” to

enforce plan terms. Were equitable relief and enforcement of

plan terms mutually exclusive, that aspect of § 502(a)(3) would

be rendered meaningless.

Interpreting § 502(a)(3) to foreclose the enforcement of ER-

ISA reimbursement provisions would be inconsistent with

Congress's evident intent to make all ERISA plan terms en-

forceable. In enacting ERISA, Congress intended to create a

uniform federal scheme for the administration and enforcement

of ERISA plans. Congress did not dictate the content of ER-

ISA plans and left to employers to decide what kind and

amount of benefits to provide, including whether to provide

benefits at all. Rather, Congress wanted to ensure that ERISA

plans are fairly and consistently administered and that the plan

terms, whatever they turn out to be, are enforceable. Indeed,

Congress cared so much about plan enforcement that it created

an unusually “carefully crafted and detailed enforcement

scheme,” Mertens v. Hewitt Assocs. , 508 U.S. 248, 254 (1993),

and then gave it “extraordinary pre-emptive power.” Aetna

Health Inc. v. Davila, 542 U.S. 200, 209 (2004).

Plan fiduciaries who seek to enforce ERISA plan terms can-

not do so by invoking state law causes of action. Such actions

are preempted by ERISA § 514(a) and are even “completely

preempted” by § 502(a)’s enforcement provisions. Davila, 542

U.S. at 204. Congress intended ERISA’s civil enforcement

provision to be the exclusive vehicle for enforcing plan terms.

Id. at 208-09; Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 51-

56 (1987). Because state law remedies are preempted,

§ 502(a)(3) is the exclusive means by which an ERISA plan

fiduciary can enforce a reimbursement provision in an ERISA

plan contract. If the Court were now to construe “appropriate

equitable relief” narrowly as excluding such actions even in the

circumstances allowed under Great-West, then ERISA plan

5

fiduciaries would have no remedy against plan participants who

violate ERISA plan reimbursement provisions, a result that

could not have been intended by Congress. Instead,

§ 502(a)(3) should be construed in accordance with Congress’ s

desire to promote adherence to plan terms through appropriate

enforcement mechanisms.

ARGUMENT

ERISA subjects to federal regulation employee pension and

welfare benefit plans that provide “medical, surgical, or hospi-

tal care or benefits” “through the purchase of insurance or

otherwise.” 29 U.S.C. § 1002(1). The statute does not require

employers to provide health benefit plans to their employees,

nor does it dictate plan content. See New York State Confer-

ence of Blue Cross & Blue Shield Plans v. Travelers Ins. Co.,

514 U.S. 645, 651 (1995) (ERISA “does not go about protect-

ing plan participants and their beneficiaries by requiring

employers to provide any given set of minimum benefits, but

instead controls the administration of benefit plans.”); Curtiss-

Wright Corp. v. Schoonejongen, 514 U.S. 73, 78 (1995) (“plan

sponsors are generally free under ERISA, for any reason at any

time, to adopt, modify, or terminate welfare plans”). Instead,

the focus of ERISA is on providing “a uniform regulatory

regime.” Aetna Health Inc. v. Davila, 542 U.S. 200, 208

(2004).

Two features of the statute particularly carry out that purpose.

First, ERISA’s expansive preemption provision, § 514(a), 29

U.S.C. § 1144(a), ensures that ERISA plans are “subject to a

uniform body of benefits law” and “minimize[s] the adminis-

trative and financial burden of complying with conflicting

directives among States or between States and the Federal

Government.” Ingersoll-Rand Co. v. McClendon, 498 U.S.

133, 142 (1990). Second, ERISA’s comprehensive, integrated

enforcement mechanism, § 502(a), 29 U.S.C. § 1132(a), en-

sures that ERISA plan terms are enforceable. This Court has

described the enforcement scheme as “one of the essential tools

6

for accomplishing the stated purposes of ERISA.” Pilot Life

Ins. Co. v. Dedeaux, 481 U.S. 41, 52 (1987). Both the preemp-

tion provision and the enforcement scheme are relevant to the

issue presented, but we turn first to the enforcement scheme.

A. ERISA’s Enforcement Provisions Are Central to the

Statutory Scheme and Provide for the Enforcement of

All ERISA Plan Terms

ERISA’s detailed enforcement mechanism is “a distinctive

feature” of that statute and contrasts ‘vith many other federal

statutory schemes that devote relatively little attention to en-

forcement mechanisms. Davila, 542 U.S. at 208. This Court

has recognized that ERISA’s enforcement provisions are “es-

sential to accomplish Congress’ purpose of creating a

comprehensive statute for the regulation of employee benefit

plans.” /d. The principal civil enforcement provisions are the

first three, which each address different features of plan ad-

ministration. Section 502(a)(1) allows a plan participant to sue

to recover benefits due under the terms of the plan, to enforce

her rights under the plan, or to clarify rights to future benefits.

Section 502(a)(2) allows the Secretary of Labor, plan partici-

pant, or fiduciary to bring suit for breach of fiduciary duty.

Section 502(a)(3), the provision directly at issue here, author-

izes civil suits brought “by a participant, beneficiary, or

fiduciary (A) to enjoin any act or practice which violates any

provision of this title or the terms of the plan, or (B) to obtain

other appropriate equitable relief (i) to redress such violations

or (ii) to enforce any provisions of this title or the terms of the

plan.” 29 U.S.C. § 1132(a)(3).

The Court has emphasized that this enforcement scheme does

not encompass every possible kind of remedy. For example, in

Massachusetts Mutual Life Ins. Co. v. Russell, 473 U.S. 134,

147 (1985), the Court held that ERISA does not authorize

punitive damages for breach of fiduciary duty. In Mertens v.

Hewitt Assocs., 508 U.S. 248, 255-58 (1993), the Court held

that § 502(a)(3), in establishing a cause of action for “appropri-

7

ate equitable relief,” did not authorize suits for compensatory

damages because that relief was not typically available in

equity.

But these limitations go only to the type of relief available;

they do not carve out a sphere of immunity from enforcement.

Consistent with the centrality of the enforcement provisions to

the statutory scheme, ERISA offers some form of remedy for

all plan violations. Section 502(a)(1) broadly allows plan

participants to recover benefits and enforce rights “under the

plan.” Section 502(a)(3) allows plan participants or fiduciaries

to enjoin violations of “the terms of the plan” or to “obtain

other appropriate equitable relief... to enforce . . . the terms of

the plan.” These provisions draw no distinction among differ-

ent categories of plan provisions, instead making their

enforcement tools generally applicable to all plan terms.

B. ERISA Reimbursement Provisions Are Enforceable

Under § 502(a)(3) If the Criteria Set Forth in Great-

West Are Satisfied

Despite Congress’s manifest and concerted effort to provide

in § 502(a) a remedy for all ERISA plan violations, petitioners

assert that ERISA plan reimbursement provisions are not en-

forceable under the ERISA enforcement scheme because “pre-

merger courts of equity would never have classified MAMSI’s

attempt to obtain money to fulfill a contractual reimbursement

obligation as one that qualified for equitable relief.” Pet. Br. 11

(footnote omitted). That broad contention contradicts this

Court’s analysis in Great-West Life & Annuity Ins. Co. v.

Knudson, 534 U.S. 204 (2002). There, the Court considered

the circumstances under which ERISA plan reimbursement

provisions are enforceable under § 502(a)(3). The Court inter-

preted § 502(a)(3)’s authorization of civil actions seeking

“other appropriate equitable relief” as referring to “those cate-

gories of relief that were typically available in equity.” /d. at

210. The Court explained that “a plaintiff could seek restitu-

tion in equity, ordinarily in the form of a constructive trust or

8

an equitable lien, where money or property identified as be-

longing in good conscience to the plaintiff could clearly be

traced to particular funds or property in the defendant’s posses-

sion.” /d. at 213.

The Court found that this test was not met by the plan fiduci-

aries in Great-West because the funds they sought were not in

the beneficiaries’ possession or control but rather had been

disbursed to a Special Needs Trust and to the beneficiaries’

attorney. /d. at 214. “The kind of restitution that [the fiduciar-

ies] seek, therefore, is not equitable — the imposition of a

constructive trust or equitable lien on particular property — but

legal — the imposition of personal liability for the benefits that

they conferred upon [the beneficiaries].” /d.

The Court left open the possibility that the plan fiduciaries

“could have obtained equitable relief against [the beneficiar-

ies’] attorney and the trustee of the Special Needs Trust.” /d. at

220. Great-West, however, had not appealed the District

Court’s denial of its motion to amend its complaint to add these

individuals as co-defendants, and therefore the Court did not

determine whether an action by Great-West against those par-

ties would have fallen within § 502(a)(3).

In addition to the Fourth Circuit, three other courts of appeals

have interpreted Great-West as describing circumstances under

which a plan’s action for reimbursement against a plan partici-

pant will be treated as seeking appropriate equitable relief.

Admin. Comm. of the Wal-Mart Assocs. Health & Welfare Plan

v. Willard, 393 F.3d 1119 (10th Cir. 2004); Admin. Comm. of

the Wal-Mart Stores, Inc. Assocs. Health & Welfare Plan v.

Varco, 338 F.3d 680 (7th Cir. 2003), cert. denied, 542 U.S. 945

(2004); Bombardier Aerospace Employee Welfare Benefits

Plan v. Ferrer, Poirot & Wansbrough, P.C., 354 F.3d 348 (Sth

Cir. 2003), cert. denied, 541 U.S. 1072 (2004). These courts

did not question the correctness of the distinction this Court

drew in Great-West, but rather focused their analysis on

whether the reimbursement suit at issue satisfied the conditions

9

set forth there for “equitable relief’ within the meaning of

§ 502(a)(3).

In contrast, the Ninth Circuit in Westaff (USA), Inc. v. Arce,

298 F.3d 1164 (9th Cir. 2002), joined two years later by the

Sixth Circuit in Qualchoice, Inc. v. Rowland, 367 F.3d 638 (6th

Cir. 2004), cert. denied, 125 S. Ct. 1639 (2005), essentially

ignored the Great-West analysis and independently determined

that a suit to enforce a reimbursement provision in an ERISA

plan is legal in nature regardless of whether the plan participant

possesses an identifiable fund. Westaff, 298 F.3d at 1167;

Qualchoice, 367 F.3d at 646. Both the Sixth and Ninth Circuits

concluded that such suits are legal and not equitable in nature

because they seek to enforce a contractual obligation.

This cramped interpretation of “equitable relief” directly con-

flicts with the plain language of § 502(a)(3). That section

states unequivocally that ERISA plans can bring suit “to obtain

other equitable relief. . . to enforce . . . the terms of the plan.”

Referring to plan terms as “contractual obligations” provides

no justification for avoiding the plain dictates of the statute.

Congress specifically authorized suits to enforce plan terms,

and therefore it necessarily used the term “equitable relief” to

include such enforcement actions, whether or not the plan

provisions are deemed “contractual.” See also Great-West,

534 U.S. at 212-15 (recognizing that “restitution in equity” was

available to remedy a breach of contract); Mertens, 508 U.S. at

253 (emphasizing that § 502(a)(3) does not “authorize ‘appro-

priate equitable relief at Jarge, but only ‘appropriate equitable

relief for the purpose of ‘redress[ing ary] violations or ...

enforc[ing] any provisions’ of ERISA or an ERISA plan.”).

The Court’s statement in Great-West regarding the type of

reimbursement suit that typically was available in a traditional

court of equity was the product of extensive research and care-

ful consideration. See 534 U.S. at 213 (citing 1 D. Dobbs, Law

of Remedies § 4.3(1), at 587-88 (2d ed. 1993); Restatement of

Restitution § 160, Comment a, at 641-42 (1936); 1 G. Palmer,

10

Law of Restitution § 1.4, at 17; id. § 3.7, at 262 (1978)). The

Fourth Circuit, along with the Fifth, Seventh, and Eleventh

Circuits properly obeyed Great-West’s standard, and there is no

reason to retreat from it Here.

C. Violations of ERISA Plan Reimbursement Provisions

Cannot Be Remedied Under State Law

The Court’s continued adherence to the Great-West standard

is all the more critical because state law in this area is pre-

empted. Thus, ERISA plan reimbursement provisions must be

enforced through § 502(a)(3), or not at all. Section 514(a) of

ERISA preempts “any and all State laws insofar as they may

now or hereafter relate to any employee benefit plan,” 29

U.S.C. § 1144(a), and saves from preemption only those state

laws that regulate insurance, banking, or securities. 29 U.S.C.

§ 1144(b)(2)(A).

The Court has often visited the subject of the preemptive

reach of § 514(a), sometimes grappling with difficult issues in

defining its precise contours. See California Div. of Labor

Standards Enforcement v. Dillingham Constr., N.A, Inc., 519

U.S. 316, 324 (1997) (“relate to” statutory language is “unhelp-

ful”); Travelers, 514 U.S. at 655 (preemption provision is

“clearly expansive” but “relate to” language should not be

extended “to the furthest stretch of its indeterminacy”). The

preemption principles relevant to this case, however, emerged

early on in the Court’s ERISA preemption jurisprudence and

have remained well settled to this day.

In Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 98 (1983), the

Court held that state laws may “relate to” employee benefit

plans and thus be preempted by § 514(a) even if they are not

“specifically designed to affect employee benefit plans.” Soon

thereafter, the Court held that common law tort and breach of

contract actions for improper processing of claims for benefits

“undoubtedly meet the criteria for pre-emption under

§ 514(a).” Pilot Life, 481 U.S. at 48; see also Davila, 542 U.S.

at 219 n.6 (reaffirming holding in Pilot Life that the “causes of

1]

action were pre-empted”). Therefore, even though state con-

tract laws presumably would authorize an action to enforce a

reimbursement provision in a plan, those state laws would not

be immunized from preemption simply because they are laws

of general applicability, rather than laws specifically directed at

employee benefit plans.

In Ingersoll-Rand Co. v. McClendon, 498 U.S. 133 (1990),

the Court amplified its holding in Pilot Life, explaining that

ERISA preempts state law causes of action for violation of

ERISA plan terms because those actions “relate to” an em-

ployee benefit plan in that they are premised on the existence

of an employee benefits plan. The plaintiff in /ngersoll-Rand

filed a state court action alleging that he was wrongfully termi-

nated because of the employer’s desire to avoid contributing to,

or paying benefits under, the employee’s pension fund. The

plaintiff asserted various state law contract and tort theories.

The Court concluded that the state law cause of action “relates

to” an employee benefits plan because it “makes specific refer-

ence to, and indeed is premised on, the existence of a pension

plan.” /d. at 140. As the Court observed, “there simply is no

cause of action if there is no plan.” /d.

Similarly, a state law breach of contract action to enforce an

ERISA plan reimbursement provision would necessarily make

direct reference to and be premised on the existence of the plan.

Under the reasoning of /ngersoll-Rand, that action necessarily

would be preempted. Absent the ERISA plan reimbursement

provision, the plan fiduciary would have no state law breach of

contract action. The state law action thus “relates to” the em-

ployee benefits plan because the violation of the plan term

provides the basis for the action. See Liberty Northwest Ins.

Corp. v. Kemp, 85 P.3d 871, 877-78 (Or. Ct. App. 2004) (state

common law breach of contract action for reimbursement is

preempted under reasoning of /ngersoll-Rand).

Moreover, state law breach of contract actions are not saved

from preemption by the savings clause because they are not

12

specifically directed toward entities engaged in insurance and

do not substantially affect the risk pooling arrangement be-

tween the insurer and the insured. See Kentucky Ass'n of

Health Plans, Inc. v. Miller, 538 U.S. 329, 342 (2003). Rather,

they are general common law causes of action unrelated to any

insurance principles. Therefore, the savings clause would not

provide a basis for a plan fiduciary to seek to enforce the reim-

bursement terms of the ERISA contract under state law.

Furthermore, state law causes of action in the reimbursement

context are preempted not only by § 514(a) but also by the

“extraordinary pre-emptive power” of § 502(a)’s enforcement

. provisions. Davila, 542 U.S. at 209; see also Rush Prudential

HMO, Inc. v. Moran, 536 U.S. 355, 376 (2002) (describing

“extraordinarily preemptive power” of ERISA’s civil enforce-

ment provisions). As noted in Davila, 542 U.S. at 211,

§ 502(a) completely preempts (and therefore makes removable

to federal court) state law causes of action seeking to enforce

“the terms of ERISA-regulated employee benefit plans.” ER-

ISA’s remedial scheme thus preempts all state law causes of

action that would duplicate, supplement, or supplant ERISA’s-

civil enforcement remedy. That would be the case, even if a

state law reimbursement claim somehow were saved from

preemption under ERISA’s insurance savings clause. See id. at

217.

Petitioners suggest (Pet. Br. 27 & n.14, 31-32), however, that

state law remedies for enforcement of reimbursement provi-

sions have not been preempted by ERISA. It is true that this

Court did not specifically address this point in Great-West,

stating that it “express[ed] no opinion as to... whether a direct

action by [the insurer] against [the insured] asserting state-law

claims such as breach of contract would have been pre-empted

by ERISA.” 534 U.S. at 220; see also id. at 227 (Ginsburg, J.,

dissenting) (suggesting that “ERISA plans and fiduciaries

unable to fit their suits within the confines of the Court’s opin-

ion... may seek enforcement of reimbursement provisions . .

13

only in state court,” but some of those suits “may be preempted

by ERISA itself’). But whatever doubt might have existed

about the ability to enforce ERISA reimbursement provisions

through state-law breach of contract actions was removed by

the Court’s recent decision in Davila. Such actions are pre-

empted by ERISA.

D. In Accordance with the Statutory Text and the Strong

Congressional Intent to Make Plan Terms Enforce-

able, § 502(a)(3) Should Be Interpreted to Authorize

Causes of Action That Satisfy the Great-West

Standard

Because state law causes of action to enforce ERISA plan

terms are preempted, ERISA provides the sole vehicle for

enforcing reimbursement provisions. Interpreting § 502(a)(3)

to allow such suits — so long as they meet the Great-West

standard — is the only result that is consistent with Congres-

sional intent that ERISA plan terms be enforceable.

To be sure, the Court has made clear that ERISA’s combina-

tion of a detailed, but not all-encompassing, enforcement

scheme and preemption of state law remedies may sometimes

leave a plaintiff without a type of remedy that would have been

available at common law before ERISA. See, e.g., Mertens v.

Hewitt Assocs., 508 U.S. 248, 254 (1993); Massachusetts

Mutual Life Ins. Co. v. Russell, 473 U.S. 134, 146-47 (1985).

That is because the specificity of ERISA’s enforcement provi-

sions “provide strong evidence that Congress did not intend to

authorize other remedies” like punitive damages. /d. at 146.

But that principle has no application here where the text of

ERISA’s enforcement provisions do encompass the remedy in

question, and adoption of petitioners’ position would leave plan

fiduciaries with no remedy at all for a violation of plan terms.

As the Court stated in Varity Corp. v. Howe, 516 U.S. 489,

512 (1996), § 502(a)(3) is a “*catchall’ provision” that “act[s]}

as a safety net, offering appropriate equitable relief for injuries

caused by violations that § 502 does not elsewhere adequately

\

14

remedy.” For the reasons stated by the Court in Great-West,

the action brought by respondent here is a suit for “equitable

relief’ within the meaning of that provision. Accordingly,

affirmance of the decision below would adhere to the statutory

text and further the evident intent of Congress to promote

adherence to ERISA plans by making their terms enforceable

in court.

CONCLUSION

The judgment of the court of appeals should be affirmed.

Respectfully submitted,

ANTHONY F. SHELLEY

Counsel of Record

ALAN I. HOROWITZ

LAURA G. FERGUSON

MILLER & CHEVALIER

CHARTERED

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FEBRUARY 2006