Federal Judiciary

New briefs filed in ERISA case

By Akin Gump Supreme Court Practice Group

The court battle over a $402,000 pension payment, and over the larger issue of a divorced spouse’s right to pension benefits, resumed in the Supreme Court on Monday afternoon with the filing of three new briefs called for by the Court on Oct. 28.  The briefs discuss a statutory issue in Kennedy v. DuPont Savings Plan Administrator (07-636) that the Court had originally not agreed to hear — that is, the role of plan documents in interpreting rights to benefits.

In the supplemental brief of the daughter of a former DuPont Co. employee, the late William Patrick Kennedy, Kari Ellen Kennedy told the Court that it would be contradicting “the collective wisdom of 45 legislatures” if it now ruled that Mr. Kennedy’s divorced wife, Liv, is now entitled to a pension that she explicitly surrendered in a divorce decree.  “Divorced spouses do not knowingly enrich ex-spouses to the detriment of children,” the document contended. To fail to enforce the divorce decree, just because Mr. Kennedy did not change his designation of a beneficiary in plan documents, would “eviscerate a uniform concept of voluntary waiver,” multiply litigation, and “deny courts their ERISA-mandated role of creating a federal common law of benefits.”

In the supplement brief for DuPont and its plan administrator, they argued that Liv Kennedy had a clear entitlement to the pension benefits because her late husband had given her that status and never changed it between their divorce and his death seven years later.  “If the Plan had paid William’s account balance to his estate pursuant to the purported waiver in the divorce decree, rather than to Liv as his designated beneficiary, it would have violated the terms of the Plan,” the brief said. “Moreover, because the statute requires that benefits be paid to the designated beneficiary, there is no gap for courts to fill by creating common law directing payments to anyone else.”

The U.S. Solicitor General, supporting Liv Kennedy’s rights to the pension funds, argued in a supplemental brief that “a rule that required plan administrators to recognized a waiver contained in a state-court divorce decree, even when the participant has not taken the steps necessary to effectuate the waiver, would allow the state-court decree to trump the beneficiary designated according to the plan.  It therefore would conflict with the plan administrator’s duties under ERISA.”

The Court heard argument in the case on Oct. 7.  Its interest in the plan documens’ role arose during that argument, leading to the post-argument request for added briefs.  The Justices will now resume their private deliberations on the case, with the new briefs in hand.

Full post as published by SCOTUSBLOG on November 10, 2008 (boomark / email).