U.S. Supreme Court Rules in Favor of Xerox on Deferential Standard of Review

The United States Supreme Court earlier today (April 21) in Conkright v. Frommert reversed a Second Circuit Court of appeals decision and upheld the plan administrator’s deferential standard of review of provisions of a plan. The issue, and the case, is of major importance to major employers.

In its 5-3 opinion (Justice Sotomayor did not participate) by Chief Justice Roberts, the Court reversed the Second Circuit’s decision that the district court erred by deferring to Xerox’s interpretation of its pension plan. Roberts opened his written opinion with the remark that “[p]eople make mistakes” in holding that a single mistake does not vitiate the deferential standard of review under trust law.

The opinion upholds the standard of review set out in Firestone Tire and Rubber Co. v. Bruch that provides a “broad standard of deference without any suggestion that the standard was acceptable to ad hoc exceptions like the one adopted by the court of appeals.” In addition, the court noted favorably that it had “expanded Firestone’s approach in Metropolitan Life v Glenn.”

The opinion cited the ERIC brief for the proposition that failing to defer to the plan administrator would result in significant uniformity problems that would arise from failing to adhere to the deferential standard of review.

Chief Justice Roberts was joined by Justices Scalia, Kennedy, Thomas, and Alito. Dissenting was Justice Breyer joined by Justices Stevens, and Ginsburg.

A link to the Court’s opinion is below. Also below is ERIC’s amicus brief which was drafted by Proskauer Rose LLP and Kirkland & Ellis, LLP. The American Benefits Council joined ERIC on the brief. Xerox’s brief was submitted by Covington & Burling.

This is the third ERIC brief in the last two years that has been specifically cited in an opinion.

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