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Can the Third Circuit Get Anything Right? SCOTUS Reverses Again

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By Robyn Hagan Cain on April 17, 2013 5:02 PM

Last year, the Sixth Circuit surpassed the Ninth Circuit as the most-reversed federal appellate court, according to the ABA Journal.

This term, the Third Circuit Court of Appeals is looking like a real contender for the most mistaken crown.

Last month, the Supreme Court reversed the Philadelphia-based appellate court in Millbrook v. U.S. and Comcast Corp et al v. Behrend. This week, it added two more cases to that list: US Airways v. McCutchen and Genesis Healthcare Corp. v. Symczyk.

In US Airways v. McCutchen, the Third Circuit held that ERISA Section 502(a)(3) authorizes courts to use equitable principles to rewrite contractual language and refuse to order participants to reimburse their plan for benefits paid, even where the plan's terms give it an absolute right to full reimbursement. That ruling created a conflict with the Fifth, Seventh, Eighth, Eleventh, and D.C. Circuits.

Tuesday, the Supreme Court announced that the Third Circuit was wrong.

Specifically, the Court held in a 5-4 decision that -- in a §502(a)(3) action based on an equitable lien by agreement -- the ERISA plan's terms govern. Neither general unjust enrichment principles nor specific doctrines reflecting those principles, such as the double-recovery or common-fund rules invoked by McCutchen, can override the applicable contract.

As we mentioned earlier, that wasn't the only time the Nine parted ways with the Third Circuit this week.

The Court also reversed the Third Circuit in a second opinion, Genesis Healthcare Corp. v. Symczyk.

In Genesis Healthcare, the appellate court ruled that a Fair Labor Standards Act collective action does not become moot when the defendant makes an offer of compromise to the putative representative before "conditional certification" and before other plaintiffs opt in.

The Supreme Court, however, concluded that a district court had properly dismissed the suit for lack of subject-matter jurisdiction because the representative had no personal interest in representing putative, unnamed claimants, nor any other continuing interest that would preserve her suit from mootness. The full opinion is available here.

The good news for the Third Circuit? With only two months left in the 2012 Term, the opportunities for reversal are almost over.

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