March 04, 2019 Issue: Spring 2019

As We Go to E-Press

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 the 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:

  • Fiduciary Rule to Make a Comeback?  During a May 1, 2019 hearing of the House Education and Labor Committee, Labor Secretary Alexander Acosta told lawmakers that the Department of Labor (DOL) would issue a revised version of its controversial fiduciary rule, as part of the DOL’s work with the Securities and Exchange Commission on investment advice reform.  The Obama-era fiduciary rule expanded the definition of a fiduciary under ERISA, and was intended to mitigate conflicts of interests in investment recommendations on retirement accounts.  In March 2018, the Fifth Circuit Court of Appeals ruled that the DOL had overstepped its authority with the rule, effectively preventing its enforcement.  It is unclear when the new rule will be released.
  • Solicitor General to Weigh in on ERISA Petitions for Cert.  In recent months, the Supreme Court has invited the Solicitor General to submit briefs regarding three potentially significant ERISA-related petitions for certiorari.  See Thole v. U.S. Bank, N.A., 139 S. Ct. 306, 202 L. Ed. 2d 16 (2018); Rutledge v. Pharm. Care Mgmt. Ass'n, No. 18-540, 2019 WL 1590243 (U.S. Apr. 15, 2019); Putnam Investments, LLC v. Brotherston, No. 18-926, 2019 WL 1756671 (U.S. Apr. 22, 2019).  In Thole, the central question is whether an ERISA participant must demonstrate individual financial loss (or imminent risk thereof) to seek relief under 29 U.S.C. § 1132(a)(2).  In Rutledge, the question is whether the 8th Circuit erred in holding that an Arkansas statute regulating pharmacy benefit managers’ drug-reimbursement rates is preempted by ERISA.  In Putnam, the petition seeks to settle a circuit split on whether the plaintiff bears the burden to prove that a breach of fiduciary duty caused a loss, or whether defendants bear the burden to disprove that the loss was caused by the alleged breach. 
  • DOJ Argues Against the Affordable Care Act.  In a major shift, the Department of Justice (DOJ) has submitted a brief to the Fifth Circuit Court of Appeals arguing that the entire Affordable Care Act (ACA) is unconstitutional and should be invalidated.  The brief was filed in the appeal of Texas v. United States, 352 F. Supp. 3d 665 (N.D. Tex. 2018), a suit originally brought to challenge the ACA’s individual mandate.  Health Affairs analyst Katie Keith points out that “[t]he reversal in the DOJ’s position follows the appointment of a new U.S. Attorney General, William Barr, who had previously joined an amicus brief asking the Supreme Court to strike down the entire ACA in 2012. Whether Congress’s recent recommendation that AG Barr be held in contempt of Congress for failing to turn over Robert S. Mueller III’s unredacted report will have any impact on DOJ policy in this and other areas, is anybody’s guess.