WASHINGTON, DC (January 30, 2009 – LAWFUEL) — Kilpatrick Stockton announced today that the U.S. Supreme Court unanimously ruled for firm client DuPont in the major Employment Retirement Income Security Act (ERISA) case of Kennedy v. DuPont Plan Administrator, Docket No. 07-636. Kilpatrick Stockton’s Mark Levy, Chair of the firm’s Supreme Court and Appellate Advocacy Group, argued the case on October 7, 2008, and the Court ruled on January 26, 2009. This was Mr. Levy’s sixteenth argument in the Supreme Court.
The issue before the Court was whether beneficiaries under an ERISA-covered pension plan can forgo benefits in a state-court divorce decree or whether they have to follow the procedures set forth in the documents governing the plan. In this case, a DuPont employee designated his wife to be the beneficiary of his pension account under the DuPont plan. The employee and his wife later divorced pursuant to a state-law divorce decree that divided the couple’s assets and stated that the wife waived her right to the pension benefits. After the divorce, however, the employee never changed his beneficiary designation for those benefits. Following the employee’s death, his estate demanded the pension benefits from the company, arguing that the divorce decree governed and relinquished the former wife’s pension rights under ERISA. However, because the former wife remained the designated beneficiary on the pension forms at the time of the employee’s death, DuPont paid the benefits to her in accordance with the terms of the plan documents.
The estate sued the DuPont plan to recover the pension benefits and prevailed in district court. That would have required the plan to pay the pension benefits twice – the original payment to the former wife and a second payment to the estate. The plan appealed to the Fifth Circuit, which reversed and ordered judgment for the company. In light of a circuit conflict on the legal questions presented, the Supreme Court granted the estate’s petition for certiorari.
Following full briefing and oral argument, the Court, in a unanimous opinion by Justice Souter, has now held in favor of DuPont and rejected the estate’s claim. The opinion is located at the following link: http://www.kilpatrickstockton.com/etc/DuPontDecision.pdf
The Court’s opinion recognizes the fundamental principle of ERISA that plan administrators are required to act in accordance with the terms of the plan documents and that this obligation extends to the payment of benefits under the plan. This simple rule provides clarity and certainty both for plan administrators and for the plan’s participants and beneficiaries. A contrary rule requiring administrators to look outside plan documents before paying benefits, the Court explained, would improperly impose additional costs on the plan, delay the payment of benefits to the rightful beneficiary, and expose the plan to the risk of double-payment. Here, the plan afforded a ready means for the employee to change his designated beneficiary by completing a simple form provided by the company, but he never did so. Accordingly, ERISA required the plan administrator to pay the benefits to the former wife in conformity with the plan documents rather than to the employee’s estate pursuant to the divorce decree. Although the case arose in the context of pension plans, the Court’s “plan documents” ruling applies equally to ERISA “welfare” plans providing, e.g., medical, accident, and death benefits.
Kilpatrick Stockton worked with DuPont’s ERISA counsel at Covington & Burling LLP.
The National Law Journal recently included Mr. Levy in the “‘who’s who’ of Supreme Court bar veterans arguing this term.” He has been involved in well over 100 cases on the merits before the Court, served as Deputy Assistant Attorney General in the Civil Division at the Department of Justice in the Clinton Administration, and previously was an Assistant to the Solicitor General. Mr. Levy is a member of the Advisory Committee for the Federal Rules of Appellate Procedure and on the adjunct faculty at the University of Virginia Law School. He is also a Fellow of the American Academy of Appellate Lawyers and a Master in the Edward Coke Appellate American Inn of Court.
Mr. Levy is an appellate columnist for National Law Journal and is frequently quoted by some of the world’s leading news organizations. He is also listed in various publications such as Chambers USA: America’s Leading Business Lawyers for Appellate Law, The Best Lawyers in America (Appellate), The Best Lawyers in Washington, D.C. (Appellate), Washington, D.C. Super Lawyers, Who’s Who in America, Who’s Who in American Law, Who’s Who Legal: USA — Commercial Litigation, and Lawdragon 3000 Leading Lawyers in America.
For more information about Mr. Levy, please visit: http://www.kilpatrickstockton.com/attorneys/detail.aspx?ID=12961&pglist=&stlist=
About Kilpatrick Stockton
Kilpatrick Stockton LLP is a full-service international law firm with more than 500 attorneys in ten offices across the globe: Atlanta and Augusta, GA.; Charlotte, Raleigh and Winston-Salem, NC; New York, NY; Washington, D.C.; Dubai; London; and Stockholm. Kilpatrick Stockton’s delivery of innovative business solutions provides results-oriented counsel for corporations, from the challenging demands of financial transactions and securities to the disciplines of intellectual property management. Collaboration among Kilpatrick Stockton’s corporate, litigation and intellectual property attorneys provides knowledgeable and proactive guidance for companies at every stage of the business life cycle. For more information, please visit www.kilpatrickstockton.com.