The U.S. Supreme Court unanimously affirmed the Fourth Circuit in Sereboff v. Mid-Atlantic Medical, allowing the administrator for a health plan to obtain reimbursement under a subrogation clause from a participant who had recovered from a third party in a tort action. The opinion, written by Chief Justice Roberts, resolves a split in the Courts of Appeal. Excerpt from the opinion distinguishing the result reached in this case from the result reached in the Great-West case:

[The] impediment to characterizing the relief in Knudson as equitable is not present here. As the Fourth Circuit explained below, in this case Mid-Atlantic sought “specifically identifiable” funds that were “within the possession and control of the Sereboffs”—that portion of the tort settlement due Mid-Atlantic under the terms of the ERISA plan, set aside and “preserved [in the Sereboffs’] investment accounts.” 407 F. 3d, at 218. Unlike Great-West, Mid-Atlantic did not simply seek “to impose personal liability . . . for a contractual obligation to pay money.” Knudson, 534 U. S., at 210. It alleged breach of contract and sought money, to be sure, but it sought its recovery through a constructive trust or equitable lien on a specifically identified fund, not from the Sereboffs’ assets generally, as would be the case with a contract action at law. ERISA provides for equitable remedies to enforce plan terms, so the fact that the action involves a breach of contract can hardly be enough to prove relief is not equitable; that would make §502(a)(3)(B)(ii) an empty promise. This Court in Knudson did not reject Great-West’s suit out of hand because it alleged a breach of contract and sought money, but because Great-West did not seek to recover a particular fund from the defendant. Mid-Atlantic does.

See a previous post on the Sereboff case here.