Calendar year 2020 saw four U.S. Supreme Court decisions dealing with ERISA and employee benefits, three from the term beginning October 2019 and one from the 2020 term. Another case from the 2020 term, California v. Texas was decided in 2021 (See, Supremes Uphold ACA Again! Find Challengers Lacked Standing). 2022 promises to provide a number of ERISA decisions as well, as the high Court continues to show interest in hearing ERISA issues. Set forth below are some cases that may be decided during the current term.
1. Hughes v. Northwestern University. Oral arguments were heard by the Court in this case on December 6, 2021. At issue is the standard a plaintiff, suing for breach of the ERISA fiduciary duty of prudence, must plead to adequately state a cause of action. In a class action, the participants claimed the university’s 403(b) plan fiduciaries breached their duty by paying excessive record keeping and investment fees when lower fees were available. The District Court dismissed the case and the United States Court of Appeals for the Seventh Circuit upheld the decision. This caused a split with the Third Circuit’s 2019 decision in Sweda v. University of Pennsylvania. A decision is expected in the Summer.
2. John Doe 1 v. Express Scripts. The issue in this case is whether Anthem, Inc., a health plan provider, (Anthem) and Express Scripts, Inc., a pharmacy benefits manager, (Express) breached fiduciary duties under ERISA when they negotiated that Anthem participants would pay higher prices for prescriptions under the pharmacy benefits manager agreement between the two companies, in exchange for a lower purchase price for Express to buy three Pharmacy Benefit Management companies from Anthem. The Second Circuit held neither company was an ERISA fiduciary when negotiating their business deal. The employer health plans using Anthem petitioned the Supreme Court to hear the case. The high Court has not yet decided whether to hear the case but on December 13, the justices invited the U. S. Solicitor General to file a brief giving the federal government’s view on the issue. This is a sign of high interest in the case.
3. Jarvis v. CalSavers. As previously reported, the Howard Jarvis Taxpayers Association is continuing its challenge to CalSavers, by asking the Supreme Court to overturn the decision of the United States Court of Appeals for the Ninth Circuit, dismissing its preemption challenge, and the justices have requested CalSavers to respond. (See Inflation Adjusted Plan Limits Reiterate Advantages of Employer Plan Over CalSAVERS; Supremes May Accept Preemption Challenge). Again the request by the justices that the state agency respond indicates their interest in the case. Originally, the response was due on December 2, 2021, but it has now been extended to January 21, 2022. In requesting the extension, the California Attorney General’s Office stated it has learned that a petition for the Court to hear another case involving preemption is likely to be filed on January 14. That case is ERISA Industry Committee v. Seattle, in which the Ninth Circuit upheld a Seattle ordinance against ERISA preemption. The Seattle law requires large hotels and related businesses to provide workers with either health insurance coverage or additional compensation. The California Attorney General asked for further time to respond in the CalSavers case to address any overlapping issues in both cases.
Stay tuned throughout 2022 to see if the Court has another term with multiple ERISA decisions.