ERISA case not moot, brief says
on Aug 3, 2007 at 12:39 pm
Attorneys for a Texas man involved in a major test case on rights to benefits in employee plans urged the Supreme Court on Friday to go ahead and decide the case and to reject a move to dismiss the case as moot. The opposition to the dismissal motion in the granted ERISA case can be found here.
James LaRue of Southlake, Texas, is seeking the right to collect damages under a plan for employees of a nationwide management consulting firm, DeWolff, Boberg & Associates, Inc., based on LaRue’s claim that his personal pension account suffered losses because of actions by the plan operator. To be able to proceed, he must persuade the Supreme Court that his claim is one covered by ERISA; the Court agreed on June 18 to hear two legal issues LaRue’s case raises. The case, docketed as 06-856, is scheduled to be argued early n the Court’s new Term, but a specific argument date has not yet been set.
On July 23, DeWolff, Boberg’s counsel filed a motion to dismiss the case as moot. It argued that LaRue has withdrawn all of the funds from his pension account and thus he is no longer a plan participant, leaving him with “no legally cognizable interest in the outcome of the case.” (A post on this blog discussing the dismissal motion can be found here.)
Responding on Friday, LaRue’s lawyers argued that his former employer was making “an eleventh hour attempt to avoid the resolution” of two legal issues that “affect the rights of tens of millions of American workers and retirees.” Caliing the dismissal motion “frivolous,” the opposition brief said that LwRue is a former employer who has “a colorable claim that he or she will prevail in a suit for benefits,” and thus is entitled to sue under ERISA. Even if there were a dispute over his status as a plan participant, the brief said, that is only an issue that the plan and its administrator could raise later in defense, should LaRue’s case be allowed to go forward.
The argument that LaRue is no longer a participant, the brief said, “is nothing more than a post-pleading defense on the merits that has no bearing on the two legal questions before this Court.” If, however, the Court has any inclination to confront the issue of LaRue’s status under the plan, that should be taken up when the case is heard on the merits, the brief contended.
Regarding the consulting firm’s argument that LaRue’s withdrawal of his funds from the plan laves him with nothing to claim, the opposition brief said that he is arguing that he “is entitled to additional benefits under the DeWolff Plan.” As a reach of the “fiduciary breach” by the plan, the brief contended, LaRue’s personal account held fewer assets than it otherwise would have “had his investment instructions been followed.”
A retiree’s eligibility as a former participant does not end when an account balance becomes zero, LaRue’s lawyers argued. If, hypothetically, a retired employee had $50,000 in his individual plan account and the plan stole the full amount, leaving a zero balance, it would be “preposterous” to suggest that this would mean the retiree had lost all his right to contest the action, the brief argued. It makes no legal difference that, in LaRue’s case, the withdrawal of all the funds in the account at the time of the withdrawal was voluntary, the brief suggested.
The brief said that LaRue “does not ask this Court for guaranteed success in his lawsuit; instead he asks thisCorut for a chance to move forward with his claims.” By overturning lower court rulings against claim such as LaRue’s, it added, the Justices will clear the way for him and others “to play their part in the critically important remedial scheme of ERISA.”
