The U.S. Supreme Court opens its 2013 Term, October 7, and on deck are several cases with significant implications for people 50 and older. Some of the cases address questions left unanswered by previous Supreme Court decisions. Others involve substantive rights. Still others involve procedural issues such as statute of limitations and appropriate standard of review of actions which can all but determine whether a law suit will be brought at all. AARP has prepared a summary of those cases, as well as cases the Court may also agree to hear. The full report, prepared by AARP Foundation Litigation, can be found at http://www.aarp.org/content/dam/aarp/aarp_foundation/litigation/pdf-beg-01-09-2013/Supreme-Court-Preview-2013.pdf
During its first week, the Court will take up several of the cases which impact AARP members.
The Court will hear arguments in Madigan v. Levin, which addresses whether the federal Age Discrimination in Employment Act (ADEA) provides the excusive vehicle for asserting federal age discrimination claims – that is, whether such claims can also be brought under the Equal Protection Clause of the Fourteenth Amendment to the U.S. Constitution or only under ADEA. The underlying dispute in Madigan is a claim brought by a former state employee who charged that he was terminated because of his age. A trial court dismissed his ADEA claim on the ground that he fit within a statutory exemption applicable to high-ranking “policy-making level” employees and, therefore, was not protected by the ADEA – a ruling he expected might happen. To protect himself, he had also invoked the Equal Protection Clause, which provides that governments (in this case, Levin’s state government employer) may not treat people in similar situations differently. The U.S. Court of Appeals agreed that Levin could sue for age discrimination pursuant to the Equal Protection Clause, and the State of Illinois appealed. AARP’s friend-of-the-court brief argues that the Seventh Circuit correctly decided that the ADEA was never intended to be exclusive remedy for age discrimination.
Another case slated for argument is Chadbourne & Park LLP v. Troice, one of three cases consolidated in the now-captioned Roland v. Green litigation. The three suits involve a multi-billion dollar Ponzi scheme perpetrated by R. Allen Stanford through various corporate entities. The scheme involved the sales of fraudulently marketed Certificates of Deposit (CDs) that were rife with misrepresentations. The question was whether these CDs met the definition of securities under the federal Securities Litigation Uniform Standards Act (SLUSA) – if so, they were exempt from fraud claims brought under state anti-fraud laws seeking recourse for misrepresentations, omissions, and fraud. A trial court found that while they were not technically covered securities, the CDs walked and talked like securities and thus were SLUSA covered. The U.S. Court of Appeals for the Fifth Circuit disagreed, ruling that the trial court had too broadly extended SLUSA’s coverage. AARP’s friend-of-the-court brief urges the Court to uphold the appellate court’s ruling. Allowing issuers of private investment vehicles like these CDs to invoke the protection of SLUSA would not advance the purposes of SLUSA (which is to provide uniformity in securities market enforcement), would only create additional obstacles for defrauded investors, and undermine the role of state-based private securities laws in protecting investors from ever-changing fraudulent investment schemes.
The Court will take up the question of Julie Heimeshoff, whose challenge to a denial of long-term disability benefits was deemed too late. In December 2005, Hartford found that she had failed to provide satisfactory proof of her disability. After an informal appeal, Hartford issued its denial letter on November 25, 2007. The Hartford plan, under which she was covered, imposed a three-year limitations period on legal actions challenging adverse benefit determinations, a clock that began ticking when “proof of loss” was due to Hartford. Heimeshoff filed a lawsuit challenging Hartford's decision on November 18, 2010. Hartford moved to dismiss her claim, arguing the clock had begun to tick in December 2005. A trial court agreed with Hartford and dismissed her claim. The U.S. Court of Appeals for the Second Circuit affirmed, finding that the federal law overseeing employee benefits, the Employee Retirement Income Security Act (ERISA), is silent on benefit claim limitations periods. Because the policy language is unambiguous, the court permitted the plan's contractual limitations period to begin running before the participant would even have been eligible to bring a legal action challenging her claim denial. AARP’s friend-of-the-court brief argues that it is more consistent with ERISA and the judicially created mandatory exhaustion requirement – as well as being more logical and clear to beneficiaries -- to let the internal claims process be completed first.
The Court will also consider McCutcheon v. FEC. A campaign contributor and a national political fundraising committee are challenging decades-old federal laws limiting aggregate campaign contributions (the total amounts an individual can give directly to a campaign or indirectly via election fundraising organizations in a two-year election cycle) by arguing the specific limits are no longer necessary and are redundant given more recent legislation and Supreme Court rulings. Plaintiffs argue that because the law now specifically limits and allows public scrutiny of individual donations to individual funding vehicles, the process provides limits and transparencies and therefore no overall aggregate spending limits are required. AARP’s friend-of-the-court brief points out the history that led to the laws – concerns about obscurity in campaign contributions and the backroom dealings they led to or appeared to lead to – and emphasizes that those dangers are far from past. In fact, recent elections have demonstrated that spending by and on behalf of political candidates continues to increase rapidly every two years, very large contributions by individuals, as well as corporate and non-corporate entities continue to be made in federal campaigns. Meanwhile, campaign finance disclosure, a trend assumed to be robust, predicted to be growing and a premise of permitting freer campaign spending by the Supreme Court, has lagged and in many important areas is virtually non-existent. AARP’s friend-of-the-court brief argues that the petitioners in McCutcheon “turn a blind eye to the real-world consequences of eliminating the aggregate limits, and disregard the ways the limits continue to advance the governmental interest in preventing corruption and the appearance of corruption, as well as in deterring circumvention of the base contribution limits.” The brief also parses the legislative history and the debates leading up to enactment of the overall spending limits, as well as the language of subsequent Supreme Court decisions upholding those limits, and argues that the conditions present then are nearly identical to those that are present today.