Reprinted with permission from Roger Baron
In Iron Workers v. Dinnigan, (S.D.N.Y. Nov. 21, 2012), 2012 WL 5877426, the ERISA plan paid medical bills of $1,692,371.76 for the employee’s 7 year old minor daughter Amanda. Amanda was “horribly and permanently injured… [rendering her] quadriplegic and completely insensate below the her jaw, requiring a ventilator to breathe and a shunt to control hydrocephalus… [requiring] round-the-clock nursing care.” Products liability claims netted a total recovery of $14.6 million, before attorney’s fees and required the expenditure of over $975,000 in court-approved expenses. This decision recognizes that “the total recovery of $14.1 million amounts to only a small fraction of the ‘full value’ of Amanda’s claim,” but nonetheless permits reimbursement to the ERISA plan in the amount of $1,292, 278 which is 75% of its claim. The court applies the “common fund” approach, stating,
But for Defendants’ efforts and legal fees and expenses incurred on behalf of the injured girl, [the ERISA Plan] would have no funds from which to seek reimbursement. In equity and conscience, Plaintiff should bear its fair share of the fees and expenses incurred in creating the funds from which Plaintiff seeks reimbursement.
The Clerk of the Court is directed to enter judgment for Plaintiff in the amount of $1,292,278. This is 75% of the medical expenses of $1,692,371 paid out by Plaintiff. The amount of $423,092.75 reflects Plaintiff’s fair share of the attorneys’ fees and expenses incurred in creating the total settlement Fund.
This opinion cites and follows U.S. Airways v. McCutchen, 663 F.3d 671 (3d Cir.2011), without acknowledging that Certiorari has been granted by the Supreme Court. The opinion, similar to McCutchen, holds that “equitable principles” apply to relief sought by the ERISA Plan under 29 U.S.C. § 1132(a)(3), stating,
In seeking equity, Plaintiff must be prepared to do equity.
To view the opinion, click HERE