April 16, 2013 United States Supreme Court opinions

US Airways, Inc. v McCutchen

McCutchen was injured in a car accident and received health insurance benefits from Airways’ self funded plan. McCutchen recovered damages from the responsible party and Airways sued under 29 USC 1132(a)(3) to recoup the benefit payout. McCutchen raised equitable defenses which the district court held were unavailable under the stator scheme. The 3rd circuit reversed. The Court reversed. The court held 9-0 that under 1132(a)(3), the plain terms of the plan governed and no equitable defenses are available to prevent full recovery under the terms of this plan. However, the Court then, 5-4, held that the plan was silent as to whether recovery is done before or after attorney fees are removed, that the common fund doctrine is the gap filling rule and the case was thus remanded to determine the appropriate attorney fee. The dissent argued that the common fund issue was not within the question presented and in any event was waived by McCutchen. Thus, the dissent would have reversed the 3rd Circuit outright.

Genesis Healthcare Corp. v Symczyk

Symczyk sued Genesis alleging violations of the Fair Labor Standards Act. Genesis filed a Rule 68 offer to fully satisfy her claim. Based on the offer, the district court dismissed the case. The 3rd Circuit, agreeing the offer mooted Symczyk’s claim, reversed to allow a proposed collective action to proceed. The Court 5-4, reversed. The majority assumed the case was moot based on the decision below and waiver. It held that collective actions under the Act require that the plaintiff have a live claim or the court’s lack subject matter jurisdiction. It noted that any other potential claimant continues to have the right to seek statutory damages for their claims and the “inherently transient” doctrine in class action suits is limited to claims such as pretrial detention where the alleged harm is not likely to last long enough for certification proceedings to run their course. Here, all violations alleged have already occurred and there is no basis to overcome mootness. The dissent argued that Symczyk’s claim was never moot as the declined offer did not provide grounds to dismiss the claim. Thus, she is entitled to continue the collective action.

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