The U.S. Supreme Court today decided 5-4 that a federal court can use equitable law principles when a group health plan contract governed by the Employee Retirement Income Security Act (ERISA) is silent about a legal issue.
James McCutchen, the plan enrollee in the case, U.S. Airways Inc. vs. McCutchen (11-1285), was badly hurt in an automobile collision caused by another motorist. He was working for US Airways, and his employer's plan paid $66,866 in medical expenses.
Normally, federal courts are not supposed to use "equitable law" doctrines — efforts to use traditional standards of fairness to do what seems right, rather than sticking rigidly to the letter of a law or document — when dealing with ERISA plan matters, Kagan said.
Kagan said equity cannot override the plain terms of an ERISA plan contract.