LENAI MULL V. MOTION PICTURE INDUSTRY HEALTH, No. 20-56315 (9th Cir. 2022)

Court Description: Employee Retirement Income Security Act. The panel reversed the district court’s summary judgment in favor of plaintiffs in an action against the Motion Picture Industry Health Plan and the Plan’s Board of Directors, alleging violation of the Employee Retirement Income Security Act of 1974, and remanded with instructions for the district court to enter summary judgment in favor of the Plan. Plaintiff Norman Mull was a participant in the Plan. After his daughter, a covered dependent, was injured in a car accident, the Plan paid benefits to cover a portion of her medical expenses. Under the Plan’s terms, Mull was liable to the Plan for the reimbursement of these benefits if the daughter recovered money from the third party who caused her injuries. Although the daughter obtained such a recovery, she dissipated her settlement funds without reimbursing the Plan, and Mull did not pay the reimbursement amount himself. Invoking a self-help provision in the Plan’s terms, the Plan stopped making benefit payments to Mull and his covered dependents to recoup its unreimbursed payments. Plaintiffs brought this action to recover the benefits withheld by the Plan and to force the Plan to make benefit payments for covered services in the future. The district court granted summary judgment in favor of plaintiffs, concluding that the Plan could not enforce its self-help remedy. MULL V. MOTION PICTURE INDUSTRY HEALTH PLAN 3 Reversing, the panel concluded that contractual defenses could not defeat the clear and unambiguous terms setting forth the Plan’s self-help remedy. Assuming without deciding that plaintiffs could invoke the equitable doctrines of illegality, impossibility of performance, and unconscionability, the panel concluded that these defenses could not override the terms of the Plan under the facts in this case. The panel held the requirements for establishing a fiduciary’s claim for equitable relief under ERISA § 502(a)(3), including the existence of an identifiable fund in the possession and control of the person from whom recovery is sought, did not bar the Plan from exercising its self-help remedy as an alternative means of recouping its overpaid benefits. The panel explained that the Plan was not prosecuting an action for equitable relief under § 502(a)(3), but rather was a defendant in an action that plaintiffs themselves had brought to recover benefits and was using a self-help remedy that required no judicial enforcement. Agreeing with other courts, the panel held that the Plan’s self-help remedy did not undermine ERISA’s civil enforcement scheme. Rather, ERISA plan fiduciaries may bargain for and implement self-help remedies that do not require judicial enforcement. Finally, the panel held that res judicata did not bar the Plan’s use of its self-help remedy. 4 MULL V. MOTION PICTURE INDUSTRY HEALTH PLAN