No Jury Trials in ERISA Claims for Benefits – Disability and Life Insurance
Every Federal Circuit Court in the country has held that a jury trial will not occur in a claim for benefits under an employer sponsored benefit plan, yet people still file lawsuits asking for jury trials on benefits claims. Each time it comes up, federal judges shoot down plaintiffs who ask for jury trials. Yet another ERISA case was decided last week in California where the plan participant asked for a jury trial, only to find out that jury trials are not permitted. The plaintiff filed his lawsuit seeking pension benefits under the Bank of American pension plan, and the court struck his demand for jury trial.
Why are jury trials prohibited in ERISA cases?
In the California case, the judge cited an appeals court decision which explained why courts will not use a jury to decide ERISA claims:
The “remedies available to a participant or beneficiary under ERISA are equitable in nature and the Seventh Amendment does not require that a jury trial be afforded for claims made by participants or beneficiaries.”
Doesn’t the Seventh Amendment require jury trials in civil lawsuits?
Not all civil cases. The Seventh Amendment to the U.S. Constitution states, “In suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved…” The key phrase in the Amendment is “common law.” Common law actions are typically lawsuits seeking money damages. These are different than actions based in equity, such as injunction requests or cases seeking an order requiring someone to do something specific.
Since the early 1800’s, the U.S Supreme Court has held that the Seventh Amendment did not require jury trials in equity cases. In Granfinanciera, S.A. v. Nordberg, 492 U.S. 33 (1989), the Supreme Court stated that it has
consistently interpreted the phrase “Suits at common law” to refer to “suits in which legal rights were to be ascertained and determined, in contradistinction to those where equitable rights alone were recognized, and equitable remedies were administered.” Parsons v. Bedford, 3 Pet. 433, 447, 7 L.Ed. 732 (1830). Although “the thrust of the Amendment was to preserve the right to jury trial as it existed in 1791,” the Seventh Amendment also applies to actions brought to enforce statutory rights that are analogous to common-law causes of action ordinarily decided in English law courts in the late 18th century, as opposed to those customarily heard by courts of equity or admiralty. Curtis v. Loether, 415 U.S. 189, 193, 94 S.Ct. 1005, 1007, 39 L.Ed.2d 260 (1974).
Granfinanciera, S.A., 492 U.S. at 41-42. What does all of that mean in plain English? Basically, the Supreme Court said that what the founders considered equity cases would stay equity cases, and English courts never allowed a jury to decide equity cases.
Why is an ERISA lawsuit an equity case if it is about making someone pay benefit money to me?
The reason why ERISA lawsuits are not common law actions goes back to why ERISA was created. ERISA was the product of pension reform in the 1960s. Some high profile employers went belly up, and entire pension plans evaporated. Employees lost millions and were left with no retirement funds. President Kennedy started a study commission to figure out a way to create pension reform. By the time the Employee Retirement Income Security Act (ERISA) was passed in 1974, other types of employee benefits and insurance were included in the law. However, a core concept behind the enactment of ERISA was the protection of employee pensions and benefits. That encompassed the idea of a trustee protecting employee benefits.
Historically, lawsuits against trustees were filed in equity courts, because a court order was required to make a trustee do something (i.e. to enforce someone’s rights). Reviewing this history, the Supreme Court held in the early 1980s that “[i]n general, trustees’ responsibilities and powers under ERISA reflect Congress’ policy of “assuring the equitable character” of the plans.” Central States, Southeast and Southwest Areas Pension Fund v. Central Transport, Inc., 472 U.S. 559, 571 (1985); NLRB v. Amax Coal Co., 453 U.S. 322, 329-334 (1981). Basically, the Court held that trustee law was historically part of equity courts, not common law courts; and lawsuits against ERISA plans are about enforcing trustee duties to pay benefits and take other actions.
For example, in 1990, the Eleventh Circuit Court of Appeals held that jury trials were not permitted in a case involving health plan benefits. In a case called Blake v. Unionmutual Stock Life Ins. Co., 906 F.2d 1525 (11th Cir. 1990), the court held that ERISA claims for medical benefits under an employer sponsored health plan were not common law claims, and prohibited a jury trial. The court treated the claim for benefits asan enforcement action, stating: “Although here the medical treatment has been completed so that a money judgment would satisfy their demands, if the claimant were still under treatment, only an order for continuing benefits would be sufficient. This is traditionally equitable relief…” Blake, 906 F.2d at 1526.
TAKEAWAY: No ERISA jury trials in the near future
Even though an ERISA plaintiff may be seeking money benefits, the courts view them as enforcing their rights against a trustee. So, the Seventh Amendment right to a trial by jury will not apply, because the nature of an ERISA lawsuit is making someone do what they were supposed to do in the first place.
While we may not agree with courts which have held that there no jury trials under ERISA, it unlikely that judges will change the law soon.
CASE DISCUSSED: Rodriguez v. Bank of America, N.A., Bank of America Pension Plan, No. C 16-1390 CW, 2016 WL 3566950 (N.D. Cal. July 2, 2016).
If you have questions about an employee benefit claim, call experienced ERISA attorneys who handle ERISA cases nationwide at (866) 282-5260.