Budy and Bales on Naming a Defendant in an ERISA Action

Candance Budy (student at Chase/N. Ky.) and our own Rick Bales (Chase/N. Ky.) have posted on SSRN their forthcoming piece in the Transactions: Tennessee Journal of Business Law: Naming a Defendant in an ERISA Action.

Here's the abstract:

When an employee participating in an ERISA benefit plan files a claim, someone must determine whether the assets of the plan will be used to pay the claim or whether the claim will be denied. Sometimes the employer makes this decision; sometimes the employer delegates the decision to a plan administrator. If the claim is denied, ERISA permits the employee to sue, but does not specify who may be named a defendant. The federal circuit courts are split three ways on the issue, some holding that only the plan itself may be sued, others holding that both the plan and the plan administrator may be sued, and still others holding that both the plan and the employer may be sued. This article argues that courts should permit suit against any entity that played a role in denying the claim. This approach (1) is consistent with the plain language of ERISA, (2) is consistent with the legislative intent behind ERISA which was to protect employees from underfunded plans and from erroneous benefit denials, (3) is consistent with Supreme Court precedent permitting fiduciaries to be sued under ERISA, and (4) creates an incentive for entities making benefits determinations to make those determinations correctly.

This is important stuff. Indeed, when I teach civil enforcement actions under ERISA, I always start the class with a chart on who can sue whom under different parts of the statute. This piece should help clarify some of the more difficult tricks under ERISA in this area.

PS