Heller Ehrman Achieves a Rare Supreme Court Triple Play

Law Firm Significantly Involved in Three U.S. Supreme Court Decisions Handed Down in Same Week, Including Two of Five Cases Decided Thursday

Metropolitan Life Ins. Co. v. Glenn (06-923)

In a case expected to have wide ramifications, the Supreme Court ruled that a court reviewing an employee’s denial of health or disability benefits should consider an insurance company’s conflict of interest in both deciding claims and paying for any benefits.

By a 6-3 ruling, the justices ruled in favor of an Ohio woman with a heart condition who had sued MetLife Inc. after the insurer denied her disability claim. Wanda Glenn, who had worked for Sears, Roebuck & Company for 14 years, said that Sears’ insurer, MetLife, had an obvious conflict of interest because it not only administered the plan but also funded the benefits.

A trial court had ruled in favor of MetLife, but the Sixth U.S. Circuit Court of Appeals overturned that decision. In its opinion, the Supreme Court agreed with the appeals court that under the Employment Retirement Income Security Act (ERISA), the federal law that covers employee benefit plans, the insurer had a conflict because of its dual roles in both deciding whether an employee is eligible for benefits and its obligation to pay for those benefits.

“This was a critically important ruling for any employee seeking to recover the benefits he was promised  — and there are thousands of them every year,’’ said Josh Rosenkranz, a litigation shareholder based in Heller Ehrman’s New York office who argued on behalf of Glenn before the U.S. Supreme Court.  Rosenkranz said that MetLife’s contention that an insurance company invariably acts only for the benefit of the claimants and, therefore, should be deferred to “defies common sense.”

“Anyone who has ever had a dispute with an insurance company knows that insurers are not always eager to pay what they owe,” Rosenkranz said. “The Supreme Court held that lower courts must consider that reality when they review claim denials.”

Kentucky Retirement Systems v. EEOC (06-1037)

In a separate case, Heller Ehrman prevailed in an age discrimination lawsuit involving Kentucky’s pension plan system. The U.S. Supreme Court ruled against a sheriff’s county employee who became disabled after he was eligible for retirement at age 55 and continued to work until he retired at age 61. The employee claimed he was a victim of age discrimination because he would have received a greater pension if he had become disabled before age 55.

A trial court granted Kentucky’s summary judgment, but the Sixth Circuit reversed, ruling that the plan violated federal age discrimination laws.

On Wednesday, the U.S. Supreme Court ruled in favor of Kentucky, whose legal team included Heller Ehrman.  In a 5-4 ruling, the court described the plan as a complex systemwide set of rules and found no evidence that the state was motivated by age when it set up the procedure.

Republic of the Philippines v. Pimentel (06-1204)

For many years, Heller Ehrman has represented the Philippine Government in connection with disputes involving efforts to recover assets stolen by President Marcos while he was in office.  In Pimintel, the court ruled that the Ninth Circuit erred when it refused to dismiss an interpleader case involving property of the Marcos Estate even though the Republic had properly asserted sovereign immunity.

The case involved funds that Marcos deposited, in the name of a dummy corporation, at Merrill Lynch in New York. When various claimants asserted rights to the funds, Merrill Lynch commenced an interpleader action in Hawaii, where earlier Marcos-related litigation had been adjudicated.  The Philippine Government declined to submit to the court's jurisdiction and, in an earlier successful appeal, the Ninth Circuit held that the interpleader case needed to be stayed pending resolution of on-going proceedings in the Philippines.  Subsequently, however, the Ninth Circuit allowed the interpleader action to proceed in the absence of the Philippines and the funds were awarded to another claimant.

The Supreme Court held that the assertion of immunity by the Republic necessitated dismissal of the entire action on the ground that as a non-frivolous claimant to the funds, the Republic was an “indispensable” party and that the action, accordingly, could not proceed without it.  The case was remanded to the Ninth Circuit with instructions to order the district court to dismiss the interpleader suit.

The team representing the Philippine Government included Steve Bomse, Rachel Jones and David Thomas, all from the San Francisco office, along with Richard Cashman and Josh Rosenkranz, who are based in Heller Ehrman’s New York office.

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