Academic journal article St. Thomas Law Review

Darkness at Noon: Judicial Interpretation May Have Made Things Worse for Benefit Plan Participants under ERISA Than Had the Statute Never Been Enacted

Academic journal article St. Thomas Law Review

Darkness at Noon: Judicial Interpretation May Have Made Things Worse for Benefit Plan Participants under ERISA Than Had the Statute Never Been Enacted

Article excerpt



       A. Preemption
       B. Deferential Review of Plan Administrators' Decisions
       C. Limitations on Remedies and Causes of Action
          1. Exhaustion of Administrative Remedies
          2. No consequential damages
          3. No punitive damages
          4. Employer allowed to set the statute of limitations


       A. ERISA's Benefits
          1. The Objection
          2. Response
       B. ERISA's drafters wouldn't have been so surprised by the
          results reached by the courts
          1. The Objection
          2. Response


Is there anything the writer of a rule can do to make sure courts apply the rule as the writer intends? Prominent 20th century American legal theorists took a pessimistic view. One early commentator put it this way: "We are under a Constitution, but the Constitution is what the judges say it is." (1) Another reputedly remarked that a case's outcome is less determined by the text of "the law" than by what the judge had for breakfast. (2) The claims of so-called "Legal Realists" about the weakness of objective words as a constraining force (3) have struck a number of observers as questionably extreme, as overstated. (4) But sometimes it seems there might be something to them.

For anyone who has tried to help a retiree collect a pension or an employee receive a medical reimbursement, the Employee Retirement Income Security Act of 1974, or ERISA, (5) serves as an illustration. Last year marked the 35th anniversary of the effective date of this law, which was adopted to great acclaim by legislators who thought they were striking a blow for the rights of participants in employer-sponsored pension and other benefit plans. We know that is what they thought because they said so, in the Act itself (6) and in the legislative record. (7) ERISA is an example of a statute having what has been called a "singing reason." (8)

Despite that, the federal courts have felt themselves free in the decades since to resolve a long series of questions under ERISA against plan participants and in favor of employers. (9) The strength of an ERISA plaintiff's legal position has steadily eroded, to the point where today it is routinely the case that a plan participant can prevail only if he is able to persuade a court that ERISA does not apply to his case. (10) And for exactly that reason--to make it harder for participants to enforce their rights companies now go out of their way to make sure that the plans they establish or administer are, in fact, subject to ERISA. (11) This is a remarkable situation. It suggests employees are worse off than they would have been had the statute never been enacted.

How this came to be is worth considering. At thirty-six, ERISA's judicial history is significant in its own right--for example, from the standpoint of American retirement and health insurance policy. (12) But this history is also a study in the power that legislative words do not have over judges. It may be a data point partially vindicating Legal Realism. (13)


Courts have constricted the rights of employee benefit plan participants under ERISA in a number of ways, the most prominent of which are catalogued in Part III below. The cumulative effect of these decisions, however, can only be appreciated by taking them together--by considering the overall position of a plan participant under ERISA, as interpreted, relative to the participant's position had ERISA not been enacted. That task is undertaken in Parts IV and later parts of the article.

The review of ERISA case law in this article is intended only as a survey: Much more has been written on the individual issues raised below than is recounted here. (14) References are included to provide the interested reader with an embarkation point for further investigation, but the author's immediate objective is to identify these various judicial trends in one place, to convey how cumulatively devastating to employee benefit plan participants they have now proved. …

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