AALS

Employee Benefits

Section Newsletter

Fall 2008

Table of Contents

2AALS Annual Meeting

Information

3Member News To Know

5Information on the 2009 Midwinter Meeting of the ABA Employee Benefits Committee

6Case Law Developments

10 Section Blog and Listserv

10Current Section Officers &

Executive Committee

AALS Annual Meeting Information

We look forward to seeing everyone at the 2009 AALS Annual Meeting from January 6-10, 2009, in San Diego, CA.

Our Section Panel

Please join our Section onThursday, January 8th, 10:30am-12:15pm for its panel: “The Role of Employers in Achieving Universal Health Care Coverage.”

The panel will be moderated by AMY MONAHAN (Missouri, visiting Minnesota) and our speakers will be: DAVID HYMAN(Illinois), Gregg Bloche (Georgetown),Elizabeth Pendo (St. Louis), and Ed Zelinsky (Cardozo).

The Yale Journal of Health Policy, Law & Ethics will be publishing a mini-symposium of the papers generated by this panel.

Our Section Business Meeting

We will hold our Section’s business meeting after the panel on Thursday, January 8th, at 12:15 p.m. Please join us and let us know if you are interested in serving as an Officer or a Member of the Executive Committee next year.

Other Panels of Interest

Wednesday, January 7th, 2:00pm-3:30 pm:

Section on Sexual Orientation and Gender Identity Issues, Breakout Session 7: “Property, Conflict of Laws, Income Tax and Employee Benefits.”

Thursday, January 8th, 8:30am-10:15am:Section on Law and Mental Disability, Co-Sponsored by Section on Disability Law: “Law Professor Narratives of Mental Illness.”

Friday, January 9th, 10:30am-12:15pm: Section on Employment Discrimination Law: “If It Is Broken, Then Fix It: Needed Reforms to Employment Discrimination Law.”

Friday, January 9th, 1:30pm-3:15pm: Section on Disability Law: “The Health Care System and Disability.”

Friday, January 9th, 3:30pm to 5:15pm, Section on Labor Relations and Employment Law panel: “At the Border and Beyond: California and the Evolving Workplace.”

Saturday, January 10th, 9:00am-10:45am: Section on Minority Groups: “Hiring, Retaining and Promoting Law Professors of Color.”

Member News To Know

KATHRYN KENNEDY (John Marshall)published: IRAs, 367 Tax Mngt Portfolio (7th Edition, 2008); SEPs & SIMPLES, 368 Tax Mngt Portfolio (7th Edition, 2008); and The Demise of Defined Benefit Plans For Private Employers, 121 Tax Notes 179 (Oct. 13, 2008).

Katie presented: “Employee Plans Compliance Resolution System (EPCRS) Advanced Correction Methods, ASPPA Cincinnati Pension Conference; “What Fiduciaries Need to Know” and “Restricted Distributions under Section 436” at ASPPA Annual Conference; “Minimum Standards for Tax-Qualified Retirement Plans,” National Institute on ERISA Basics, ABA Joint Committee on Employee Benefits; “Employee Plans Compliance Resolution System (EPCRS) Advanced Correction Methods,” ASPPA/IRS Great Lakes Conference; “Recent Developments with Qualified Plans and IRA Distributions” and “The Minimum Distributions Rules,” ISBA Trusts & Estates and Employee Benefits Sections; and “IRAs: Planning Distribution Strategies and Plan Investments,” AALS Annual Meeting, Jan. 2008.

Katie was also promoted to Associate Dean for Advanced Studies and Research, effective fall 2007. Congratulations!

BARRY KOZAK (John Marshall)published: “Employee Benefit Plans and Issues for Small Employers” 353 BNA Tax Mngt Portfolio (4th ed.) (forthcoming 2009); “Employee Benefit Plans: Regulatory Framework and Practical Applications,” Carolina Academic Press, text book and teacher’s manual (1st edition, manuscript to be delivered in early 2009); and “The Funded Status of Public Sector Pension Plans: Are They Truly in Crisis Mode” to be published in the upcoming edition of Benefits Law Journal.

Barry will present for the 2009 AALS Section on Sexual Orientation and Gender Identity Issues, breakout session 7 on the panel titled “Property, Conflict of Laws, Income Tax and Employee Benefits.” Barry will be discussing Employee Benefit Issues for Same-Sex Couples. The panel will discuss pedagogical methods of teaching same-sex partner issues to law students in addition to the technical aspects of the Code and ERISA.

Barry is acting as faculty coach for John Marshall’s team of students competing at the University of Buffalo Law School’s Mugel Tax Law Moot Court competition on Feb. 26.

COLLEEN MEDILL (Nebraska) published:How Do Conflicts of Interest Affect Benefit-Denial Claims Under ERISA?, 2008 PreviewU.S. Sup. Ct. Cas. 343-347 (previewing Metropolitan Life Insurance Co. v. Glenn), and The Retirement Distribution Decision Ten Years Later: Results From An Empirical Study, Elder L. J. (forthcoming 2008), and will publishPrinciples of Employee Benefits Law and Introduction to Employee Benefits Law: Policy and Practice (3d ed.).

She presented:Merging the “Old” with the “New”:Community-Based Collaborative Legal Research and Opportunities for Empirical Legal Studies, Annual Meeting of the Southeastern Association of American Law Schools.

Colleen was awarded the Warren R. Wise Professor of Law Chair, Hevelone Research Professor Chair, and the Professor of the Year Award. She is also the co-chair of the Recruitment Committee forthe American Bar Association Section’s on Employee Benefits Law.

ANDREW STUMPFF (Michigan)will publish in the winter edition of The Tax Lawyer: "Fifty Years of Utopia: A Half-Century After Louis Kelso's The Capitalist
Manifesto, a Look Back at the Weird History of the ESOP."
DAVID PRATT (Albany) published: Bender’s Federal Income Taxation of Retirement Plans, two chapters: Employee Stock Ownership Plans and Distributions, Rollovers and Loans; The Social Security and Medicare Answer Book, 3rd edition (Wolters Kluwer); Chapter 11, Ineligible Plans Under Section 457(f), in the 457 Answer Book, 2008 Supplement (Wolters Kluwer); IRAs- Investments, Rollovers, and Distributions, in NYU 66th Institute on Federal Taxation; Taxation of Retirement Plan Distributions: Some Modest Proposals, in NYU Review of Employee Benefits and Executive Compensation (2008); Chapter 23, Governmental Plans, in TAXATION OF DISTRIBUTIONS FROM QUALIFIED PLANS (Dianne Bennett et al., 2009 edition); Focus On...Decumulation, 16 (no.1) Journal of Pension Benefits 8 (2008); Focus On...Scrivener’s Errors, 15 (no.4) Journal of Pension Benefits 19 (2008) (with Marty Heming); The Supreme Court’s LaRue Decision and What It Means for Retirement Plan Fiduciaries, 15 (no.4) Journal of Pension Benefits 5 (2008); Focus On...Interest Rates for Terminating Defined Benefit Plans, 15 (no.3) Journal of Pension Benefits 5 (2008); Focus On...Making Retirement Savings Last a Lifetime, 15 (no.2) Journal of Pension Benefits 49 (2008); Retirement in a Defined Contribution Era: Making the Money Last, John Marshall Law Review (forthcoming 2008); and 2008 Year End Matters, ABA Section of Taxation News Quarterly, vol. 28, no. 1, Fall 2008.

AMY MONAHAN (Missouri) published: Value-Based Mandated Health Benefits, 80 U. COLO. L. REV. (forthcoming 2009); and Health Insurance Risk Pooling and Social Solidarity: A Response to Professor David Hyman, CONN. INS.L. J. (forthcoming 2008).

Amy presented faculty workshops at Washington University, St. Louis University, and the University of Minnesota on her Value-Based Mandated Health Benefits article above. In addition, she was a commentator at the Searle Center Research Symposium on Markets and Regulation at Northwestern University, for the panel on “Competition in Insurance Markets.”

Congratulations to Amy for being awarded tenure at the University of Missouri School of Law. During the 2008-09 academic year, she will be a visiting associate professor at the University of Minnesota School of Law.

PAUL SECUNDA (Marquette)was granted tenure and appointed Associate Professor of Law at the Marquette University Law School starting in the Fall of 2008. He published: GLOBAL ISSUES IN EMPLOYEE BENEFITS LAW (Thomson-West) (with Samuel Estreicher and Rosalind Connor) (forthcoming 2009); and “The Longest Journey, With a First Step”: Bringing Coherence to Sovereignty and Jurisdictional Issues in Global Employee Benefits Law, 19 Duke J. Comp. & Int’l Law (forthcoming 2008).

Paul presented: Sorry, No Remedy: The Grand Irony of ERISA, Marquette Faculty Workshop;Sorry, No Remedy: The Grand Irony of ERISA, 2008 Midwest Law & Society Retreat;“The Longest Journey, With A First Step”: Bringing Coherence To Sovereignty And Jurisdictional Issues In Global Employee Benefits Law,New York University 61st Annual Conference on Labor: Global Labor and Employment Law for the Practicing Attorney; and A Mosquito in the Ointment: Adverse HIPAA Implications for Health-Related Remote Sensing Research and a "Reasonable" Solution, The 2nd International Conference on the State of Remote Sensing Law, The National Center for Remote Sensing, Air, and Space Law.

PETER WIEDENBECK (Wash. University)published: ERISA in the Courts (GPO 2008) (monograph prepared for the Federal Judicial Center for use by federal district and appellate judges); Basic Federal Income Taxation (with William D. Andrews) (6th ed. forthcoming 2009) (manuscript submitted to Aspen in Sept. 2008); and The Ideological Component of Judging in the Taxation Context, 84 Wash. U. L. Rev. 1797 (2006) (with Nancy Staudt and Lee Epstein).

EDWARD ZELINSKY (Cardozo) published: The Origins of the Ownership Society: How the Defined Contribution Paradigm Changed America (2007) Oxford University Press; “Employer Mandates and ERISA Preemption: A Critique of Golden Gate Restaurant Association v. San Francisco,” State Tax Notes (Nov. 24, 2008); “Employer Mandates and ERISA Preemption in the Ninth Circuit,”47 State Tax Notes 603 (2008); and “The New Massachusetts Health Law: Preemption and Experimentation,” 49 William and Mary L. J. 229 (2007).

KATHRYN MOORE (Kentucky) published: Law of Employee Pension and Welfare Benefits (2d ed. LexisNexis 2008) (with Larry Frolik); The New Retiree Health VEBAs, NYU Review of Employee Benefits and Executive Compensation – 2008, Chapter 7; Other Eligible “Employees”: Owners, Partners, Independent Contractors, Leased Employees, in Bender’s Federal Income Taxation of Retirement Plans, Chapter 12 (2008); and The Future of Social Security: Principles to Guide Reform, John Marshall L. Rev. (forthcoming 2008).

Kathy also participated in John Marshall’s Sixth Annual Employee Benefits Symposium in April 2008.

Information on the 2009 Midwinter Meeting of the

ABA Employee Benefits Committee

The 2009 Midwinter Meeting of the Employee Benefits Committee of the American Bar Association’s Section on Labor and Employment Law will be held at the Charleston Place, Charleston, South Carolina, from February 18 - 21.

Topics include: Latest U.S. Supreme Court Decisions on Remedies and Standards of Review (e.g., Metropolitan Life Ins. Co. v. Glenn; and others); Legislative Developments; Fee Disclosure and Litigation; DOL, IRS, PBGC Regulations and Rulings; Impact of the New Administration on Employee Benefits;and Significant Employee Benefits Case Law during 2008.

The registration fee is $295 for Section members and $375 for non-members. The fees cover meeting materials, attendance at all evening functions, continental breakfasts and refreshment breaks during the meeting. There is a special rate of $225 for first-time attendees. You may register on-lineor by filling out the registration form and returning it with your payment by February 2.

Hotel Accommodations and Reservations

There is a group rate at the Charleston Place of $229 (single or double occupancy). The reservation deadline for the group rate is January 19, 2009. Reservations may be made by calling the Charleston Place at 800-831-3490. Mention you are attending the "ABA Employee Benefits Committee 2009 Midwinter Meeting" to receive the group rate. A block of rooms has also been reserved at the Doubletree Guest Suites located a short distance from the Charleston Place for $179. Those who wish to reserve a room at this property may do so by calling 877-408-8733 by January 20, 2009.

Endorsement from Colleen Medill:

I attended the Midwinter Meeting last year.I now wonder why I did not start attending years ago. The substantive content of the program was excellent. The overall content was a balance between Title I and Code topics. The persons in attendance are an interesting blend of employer, union, multiemployer plan, employee-plaintiff, and in-house attorneys, along with DOL and PBGC government lawyers. This is a very friendly and social group and the conference format offers ample opportunities to approach the speakers and discuss matters of interest with them. There are also ample opportunities to become involved in a leadership/service role with the Committee and to speak at future programs.

Case Law Developments

The 2007 Term was a relatively busy one at the Supreme Court for employee benefit law cases. Here, two are highlighted, as well as one on the docket for the 2008 term.

Two Supreme Court decisions from the October 2007 Term

In LaRue v. DeWolff, Boberg & Associates, 128 S. Ct. 1020 (2008), the Court held that, "although §502(a)(2) does not provide a remedy for individual injuries distinct from plan injuries, that provision does authorize recovery for fiduciary breaches that impair the value of plan assets in a participant’s individual account." The Court, however, declined to rule on many additional issues that could have been decided.

Justice Stevens was the perfect person to write the majority opinion (joined by Souter, Breyer, Ginsburg, and Alito) because twenty-three years earlier he wrote the decision in the Russell case, which found that consequential damages were not permitted under a Section 502(a)(2) breach of fiduciary duty claim. His understanding that Russell applied to the meaning of a plan loss in the defined benefit plan context as opposed to the defined contribution plan context of this case, seem to carry considerable weight in trying to decide the relationship between LaRue and Russell. In fact, it may be that Alito joined the progressive Justices’ opinion because he was particularly swayed by the meaning of Russell given to it by its original author.

There was some thought that the Court would also decide whether LaRue could bring his breach of fiduciary claim under the catch-all provision of Section 502(a)(3) for "appropriate equitable relief." Although that was the provision LaRue filed his case under, the Court decided that it was not necessary to address the issue of whether make whole relief is available under (a)(3) in order to come to a decision in this case. So the issue of make whole relief under (a)(3), aptly highlighted by Justice Ginsburg in her 2004 concurrence in Davila, will have to await another day.

The concurrence written by Chief Justice Roberts, and joined by Justice Kennedy, suggested that the case is really not a fiduciary breach case under 502(a)(2), but rather a denial of benefit case under 502(a)(1)(B), subject to exhaustion and Firestone discretion. It is interesting that Justice Scalia did not join Roberts opinion since he asked most of the questions in the oral argument about the (a)(1)(B) alternative, but it seems clear that he and Thomas believed this was a fiduciary case and not a benefits case being mischievously recast.

Justice Roberts concurrence has the potential to completely undermine the holding of the LaRue majority. Roberts writes that lower federal courts in the future should consider whether 502(a)(1)(B) applies in a case like this and if so, whether there must be exhaustion of internal remedies before the 502(a)(2) issue is reached, if at all. This is the argument under Varity that if appropriate relief is available under (a)(1)(B), there is no need to consider an (a)(2) remedy. This would be disastrous for ERISA participants because the (a)(1)(B) remedy would not provide any meaningful remedy to make up their losses from their individual accounts.

Kudos to Susan Stabile, Bruce Wolk, and John Langbein for having their employee benefit case book relied upon by Justice Stevens in his opinion and double kudos to Ed Zelinky, for not only having his Yale Law Journal piece relied upon twice by the majority, but for apparently providing the necessary distinction between Russell and LaRue that the Court relied upon. Also kudos to Radha Pathak for organizing the amicus brief of eleven law professors that I joined which opposed the motion to dismiss on mootness grounds filed by DeWolff in this case. Justice Stevens mentioned in footnote 6 of the majority opinion why he agreed with amici law professors and others that the case was not moot: simply because a participant as defined by ERISA includes a former employee with a colorable claim to benefits.

In what I am sure will be an unsatisfactory opinion for many, the Supreme Court in Metlife v. Glenn, 128 S. Ct. 2843 (2008), in a very fractured (5-1-1-2) decision, has basically left the Firestone discretionary review standard alone in ERISA denial of benefit claims under Section 502(a)(1)(B).

Justice Breyer wrote the majority opinion for the usual suspects, plus Justice Alito Breyer wrote: “We here decide that this dual role [of the plan insurer] creates a conflict of interest; that areviewing court should consider that conflict as a factor in determining whether the plan administrator has abused its discretion in denying benefits; and that the significance of the factor will depend upon the circumstances of the particular case.”

In other words, split the baby and go with a totality of the circumstances, ad-hoc, case-by-case analysis. Prediction: there will be no uniformity or predictability in these "combination-of-factors method of review" cases and the conservative bent of the lower federal courts will mean that employee participants and their beneficiaries will continue to lose these denial of benefit cases involving dual-role insurers at an alarming rate.

Court will continue to be guided by the four factors set out by Firestone (U.S. 1989):