As We Go To E- Press--A Few Items from the Editors of the EBC Newsletter
As is the custom, the editors have identified a few recent items worthy of mention but perhaps not extensive discourse. That does not mean these developments are unimportant but rather that they are, to a large degree, self-explanatory or both too important and too new to address fully. It is also the case for those in "Well, what about . . . ?" mode that our criteria for inclusion are relatively loose and we make no effort to track every development across the spectrum of concerns covered by JCEB in real time. We are, however, very interested in what interests you so please let us know what we left out and whether you know someone who might be interested in developing the omitted item for later article treatment. In that spirit we offer the following for consideration:
American Express v. Italian Colors Restaurant, 133 S. Ct. 2304 (2013)
In American Express, the Supreme Court upheld yet another arbitration agreement prohibiting class actions, ruling that American Express could compel arbitration of a proposed class action brought by a group of small businesses. The Court held that the businesses' anti-trust claims were subject to individual arbitration, regardless of whether they were too expensive to pursue on an individual basis because of the expert costs required to prevail.
American Express may affect when ERISA claims can be subject to arbitration agreements that preclude class actions, because the case turned on the "effective vindication of federal statutory rights" doctrine. This doctrine provides that a court may decline on "public policy grounds" to enforce an arbitration agreement where that agreement is a "prospective waiver of a right to pursue statutory remedies." Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 637 n.19 (1985); see American Express, 133 S. Ct. at 2310 (quoting same). In a 5-3 decision written by Justice Scalia with Justices Kagan, Ginsburg, and Breyer dissenting,1 the Court held that this exception did not apply in this situation, reasoning that "the fact that it is not worth the expense involved in proving a statutory remedy does not constitute the elimination of the right to pursue that remedy." 133 S. Ct. at 2311 (emphasis in original).
Since American Express, there has been much debate on what is left of the "effective vindication" doctrine, and we would welcome articles on the topic for a future newsletter.
Heimeshoff v. Hartford Life Insurance, 496 Fed. Appx. 129 (2d Cir. 2012), cert. granted, 133 S. Ct. 1802.
As noted in the prior issue, the Court also granted certiorari in Heimeshoff v. Hartford Life Insurance Co., F.3d___, 2012 WL 4017133 (2d Cir. 2012), on the following question: "When should a statute of limitations accrue for judicial review of an ERISA disability adverse benefit determination?"
Briefing is just getting underway. The petitioner's brief has been filed along with several amicus briefs, including by the Solicitor of Labor, a joint brief from AARP and the National Employment Lawyers' Association, and another on behalf of United Policyholders.
Affordable Care Act Developments
- In what Jim (and only Jim among the editorial board) refers to as a quintessential "Hold on thar, Baba Looey! I'll do the thinkin' around here, and don't you for-git it!" moment, IRS announced that certain data collection and employer responsibility payment obligations of the PPACA would not go into effect on January 1, 2014 after all. More guidance from IRS and perhaps other agencies on how that will work and what that means will be provided in the coming weeks.
- Meanwhile, the California Assembly leadership came up a few votes short of the two-thirds majority required to pass AB 880. That bill would have imposed a new Employer Responsibility Penalty on large employers whose full or part-time employees ended up enrolled in the Medi-Cal program. We may see that concept in California and elsewhere again.
1Justice Sotomayor did not participate in the case, as it concerned a Second Circuit decision.