The United States Supreme Court has agreed to hear a case that could finally resolve the question of whether the plan’s right of reimbursement can be enforced in federal court. The Case before the high court is Reynolds Metals Co. v. Ellis. The court granted cetiorari on this case as of November 27, 2000. The Ellis case arises from the Federal Ninth Circuit Court of Appeals which has barred enforcement of reimbursement rights in federal court.

The Ninth Circuit started rejecting ERISA reimbursement actions in 1997 with their ruling in FMC Medical Plan v. Owens, 122 F.3d 1258 (9th Cit. 1997). In Owens, the court held the remedy of having the member reimburse the plan was not “equitable” in nature falling outside the remedies allowed under ERISA specifically 29 U.S.C. 1132(a)(3). “When the substance of relief is monetary, the cases cited above indicate that such a remedy is not available under section 1132(a)(3).” Id. at 1262. Following the Owens precedent, the Ninth Circuit again affirmed dismissal of the Plan’s action seeking repayment from the injured participant. The Ellis court following Owens found that enforcement of the plan’s language was not an equitable remedy allowable by 29 U.S.C. sec 1132(a)(3). The Ellis court reject attempts to characterize the Plan’s action as seeking restitution or creating a constructive trust. Without the ability to enforce the reimbursement right in federal court, the Plan is left without any legal forum to see such recovery or enforce the plan.

Section 1132(a)(3) limits the ability of the plan fiduciary to initiate actions under ERISA. Sub-section (a)(3) allows a fiduciary ”(A) to enjoin any act or practice which violates any provision of this subchapter or the terms of the plan, or (B) to obtain other appropriate equitable relief (I) to redress such violations or (ii) to enforce any provisions of this subchapter or the terms of the plan.” Under the language of the statute, a plan fiduciary can see an injunction to prevent the violation of the terms of the plan or seek enforcement of the terms of the plan. The Supreme Court will have the last word on what ERISA rights can be enforced in federal court.