## Facts

- US Airways administered a self-funded ERISA health plan that paid $66,866 for James McCutchen’s medical expenses after a car accident caused by a third party.
- The plan required a participant who recovered from a third party to reimburse the plan from the recovery, without addressing attorney’s fees or litigation costs.
- McCutchen recovered $110,000 through his attorneys; after a 40% contingency fee, he received $66,000.
- US Airways sought full reimbursement of $66,866 under ERISA § 502(a)(3) by asserting an equitable lien on the recovery funds.
- McCutchen raised two equitable defenses: (a) reimbursement should be limited unless he obtained a double recovery (i.e., was made whole), and (b) any reimbursement should be reduced by a proportionate share of attorney’s fees under the common-fund doctrine.
- The district court granted summary judgment for US Airways and ordered full reimbursement.
- The Third Circuit vacated, holding equitable doctrines could limit reimbursement to prevent unjust enrichment and avoid a windfall to the plan.

## Issues

1. In an ERISA § 502(a)(3) action enforcing an equitable lien by agreement, may courts apply equitable doctrines (e.g., unjust enrichment, “made whole,” common-fund) to override clear plan reimbursement terms?
2. If equitable doctrines cannot override plan terms, may courts use equity as a default rule to resolve plan silence about allocating attorney’s fees?

## Decision

- The Supreme Court vacated the Third Circuit’s judgment and remanded.
- The Court held that in a § 502(a)(3) action to enforce an equitable lien by agreement, the plan’s terms control and equitable defenses cannot contradict those terms.
- The Court rejected using the “made whole”/double-recovery rule or unjust enrichment to negate an express reimbursement obligation.
- Because the plan did not address attorney’s fees, the Court held the common-fund doctrine supplies the default rule: the plan’s reimbursement is reduced by its proportionate share of the fees incurred to obtain the recovery, absent clear plan language disavowing that rule.

## Legal Principles

- ERISA § 502(a)(3) authorizes “appropriate equitable relief” to enforce plan terms; it does not permit courts to revise or override those terms based on general equitable notions.
- An equitable lien by agreement is enforced by carrying out the parties’ contract; equitable doctrines cannot be used to “reorder” a plan’s clear reimbursement provisions.
- Equitable principles may be used as interpretive defaults when plan language leaves an issue unaddressed; when a plan is silent on attorney’s fees, the common-fund doctrine presumptively requires proportional cost sharing.
- A plan may displace the common-fund default by clearly providing a different allocation of fees and costs.

## Conclusion

The Court held that ERISA reimbursement claims based on an equitable lien by agreement must be enforced according to the plan’s written terms, rejecting equitable defenses that contradict clear reimbursement language; however, when the plan is silent on attorney’s fees, courts may apply the common-fund doctrine as a default to reduce reimbursement by a proportionate share of litigation costs.


U.S. Airways, Inc. v. McCutchen, 569 U.S. 88 (2013)