Gorsuch May Bring Employer-Friendly Approach to ERISA Cases

Employee Benefits News examines legal developments that impact the employee benefits and executive compensation employers provide, including federal and state legislation, rules from federal...

By Carmen Castro-Pagan

If nominated as the next U.S. Supreme Court Justice, Judge Neil Gorsuch may bring an employer-friendly approach to issues related to ERISA litigation and employee benefits.

Gorsuch is said to be on President Donald Trump’s short list for Supreme Court nominees. A nomination could come as early as next week.

Gorsuch, a judge currently sitting in the U.S. Court of Appeals for the Tenth Circuit, was nominated by George W. Bush in May 2006 and confirmed two months later. He has, since then, participated in approximately 20 opinions involving the Employee Retirement Income Security Act.

He may be better known for upholding religious liberty rights in Hobby Lobby Stores Inc. v. Sebelius , 723 F.3d 1114 (10th Cir. 2013). Gorsuch was one of the judges that joined the majority opinion in that case. The ruling allowed two family-owned companies to move forward with their challenge to an Affordable Care Act rule that required them to provide certain contraceptive services as part of their employer-sponsored health-care plan.

Employer Friendly?

A survey of decisions by Gorsuch shows that, although he has been involved in at least 20 ERISA decisions in the past 10 years, the issues in those cases have been fairly limited. The opinions that he has either issued or joined involve preemption, claim denials and cash balance plans. He hasn’t addressed some of the more hot-button issues such as 401(k) plan fees, church-plan exemptions, fiduciary responsibility and retiree lifetime benefits; issues that are either been reviewed by the U.S. Supreme Court or will likely be reviewed soon.

Gorsuch has usually sided with employers and plan administrators, including Capgemini U.S. LLC, Continental Casualty Co., Liberty Life Assurance Co. of Boston, Sun Life Assurance Co. of Canada, and Prudential Insurance Co. of America on claims that seek to recover denied or terminated benefits.

ERISA Preemption

Gorsuch, in several opinions, has held that the federal statute doesn’t bar certain state laws.

In an unpublished opinion, he declined to resolve whether ERISA preempted a Colorado law that required courts to apply a less flexible standard when reviewing disability claims denials. He, instead agreed with Metropolitan Life Insurance Co. by holding that the Colorado statute didn’t apply to a participant’s lawsuit because the law was enacted after the event at issue occurred and didn’t apply retroactively.

Gorsuch also joined the opinion in Hansen v. Harper Excavating Inc. , 641 F.3d 1216 (10th Cir. 2011), where a three-judge panel held that ERISA didn’t preempt a worker’s state-law claims of fraudulent nondisclosure and negligent misrepresentation against his employer.

In another unpublished opinion in Kiker v. Community Health System Professional Services Corp. , No. 11-2134 (10th Cir. 2012), Gorsuch rejected a hospital’s request for review based on its “hope for a valuable precedent making important new ERISA preemption law.” Instead, he affirmed the district court decision that awarded $6,137 in attorneys’ fees against the hospital for wrongfully removing certain state-law claims to federal court.

Cash Balance Plans

Gorsuch also sided with Solvay Chemicals Inc. on two occasions. In 2010, he joined a three-judge panel that ruled partially in favor of Solvay because it didn’t violate ERISA’s notice requirements when it used tables to show how its conversion from a defined benefit plan to a cash balance plan would impact employees’ pension benefits. The panel, however, remanded the case to see whether the employees had any remedy for the company’s failure to give them notice as to how their early retirement benefits would be affected by the conversion.Gorsuch authored a decision in 2013 that Solvay’s employees weren’t entitled to monetary relief as a remedy for the company’s failure to provide adequate notice of the company’s pre-existing early retirement subsidies.

To contact the reporter on this story: Carmen Castro-Pagan in Washington at ccastro-pagan@bna.com

To contact the editor responsible for this story: Jo-el J. Meyer at jmeyer@bna.com

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