- Court: United States Supreme Court
- Area(s) of Law: ERISA
- Date Filed: January 20, 2016
- Case #: 14–723
- Judge(s)/Court Below: Thomas J., delivered the opinion of the Court, in which Roberts, C. J., and Scalia, Kennedy, Breyer, Sotomayor, and Kagan, JJ., joined, and in which Alito, J., joined except for Part III–C. Ginsburg, J., filed a dissenting opinion
- Full Text Opinion
In 2008, Petitioner was injured in a car accident. Respondent an ERISA regulated employee benefit plan, covered the initial medical expenses. Petitioner successfully recovered a settlement against a third-party, and Respondent sought reimbursement pursuant to a subrogation provision in the plan. Respondent sued under §502(a)(3) of ERISA, seeking equitable lien on settlement funds or property in Petitioner’s possession and an order enjoining Petitioner from dissipating any such funds. Petitioner argued that because he had already spent the settlement, no identifiable fund existed against which to enforce the lien. The District Court rejected Petitioner’s argument, and the Eleventh Circuit affirmed. The issue before the Court was whether Respondent could enforce an equitable lien against Petitioner’s general assets or whether that was a legal remedy not provided for under §502(a)(3). The Supreme Court applying Sereboff v. Mid Atlantic Medical Services, reiterated that the difference between whether a remedy is legal or equitable depends on 1) the basis of the claim, and 2) the nature of the underlying remedies sought. The Court held equitable liens are enforceable only against specifically identified funds. Respondent would have been able to recover while Petitioner’s attorney held the funds. But, if the “defendant dissipate[s] the entire fund on non-traceable items, the complete dissipation eliminates the lien.” The Court reversed and remanded for further proceedings to determine if Petitioner had dissipated all of his settlement on non-traceable items.