Legal file – Rights of persons with disabilities and pension plans

MARY REICHARD, HOST: It’s Monday, January 17, 2022 and you’re listening The world and all in it of Radio WORLD. Good morning! I am Mary Reichard.

NICK EICHER, HOST: And I’m Nick Eicher. It’s time for the legal case.

On Thursday, the United States Supreme Court issued opinions in the two COVID19 warrant cases the justices heard the previous week.

The high court blocked one of them but authorized the other.

In the case involving OSHA — the Occupational Safety and Health Administration — the court’s 6-3 ruling halts the Biden administration’s vaccine or test rules for large private employers. The conservative majority believed that OSHA’s original law was for the regulation of workplace safety. Congress has given the agency no authority to regulate pervasive dangers around the world that also exist in the workplace.

REICHARD: The majority pointed out that OSHA treats all professions exactly the same. For example, a truck driver who does his job alone is not in the same infection risk category as a worker in a meatpacking plant.

Further, the court held that Congress should clearly delegate powers of such economic significance to an agency. As Judge Neil Gorsuch wrote: If proper law enforcement applied only under “quieter conditions, the declarations of emergency would never cease…”.

Court analysts saw the decision as a victory for the constitutional concept of separation of powers. And a rebuke of the Biden administration’s attempt to circumvent the law.

EICHER: The other mandate stands. It’s the one that says you take the vaccine or lose your job in the healthcare industry.

This one went 5-4. Chief Justice John Roberts and Justice Brett Kavanaugh joined the court’s three liberals in upholding that mandate.

The court based its decision on a hodgepodge of different laws involving Medicare and Medicaid funding. Basically, if a hospital wants federal funds, they have to agree to federal terms, and one of those terms now is mandatory vaccinations.

REICHARD: Dissenting judges Clarence Thomas, Samuel Alito, Neil Gorsuch and Amy Coney Barrett held that the same reasoning applied in the OSHA decision should apply here. Simply put, the law authorizing the Department of Health and Human Services does not allow workarounds for agencies to impose irreversible medical treatment on 10 million healthcare workers.

The result, in my view, is that neither opinion places any real limit on what the federal government could do. As former federal prosecutor Andrew McCarthy wrote in National exam: The justices are simply saying that Congress must be clear in its enabling language.

In other words, the only limiting principle here is Congress.

EICHER: OK, let’s move on to the closing arguments.

First, a question of the rights of persons with disabilities.

This case involves a woman named Jane Cummings. She is deaf and her vision is so severely limited that she is classified as legally blind. She had sought physical therapy for chronic back pain from a team called Premier Rehab.

Due to her disability, Cummings said she needed Premier Rehab to provide special assistance during her therapy sessions, an interpreter who could communicate in American Sign Language.

Prime Minister Rehab refused to do so, saying she could use other methods of communication: writing notes, for example, or that she could bring her own interpreter.

Cummings sued, arguing that under Title VI of the Civil Rights Act of 1964 and other statutes, she is entitled to damages for emotional distress because Prime Minister Rehab discriminated against because of her disability.

REICHARD: You’d think it would already be settled by now, but it’s not. Things get complicated because these laws are not explicit about the particular type of harm, in this case emotional distress.

Here is Cummings’ attorney, Andrew Rozynski:

ROZYNSKI: Damages for emotional distress are the most common and often the only form of compensatory damages remedy for victims of intentional discrimination.

But Prime Minister Rehab’s lawyer, Kanon Shanmugam, argued Cummings sued under the wrong laws because the ones she used did not include damages for emotional distress.

SHANMUGAM: And so I think that underscores the essentially legislative nature of the business here and a reason for the Court to be cautious.

Either way, Judge Elena Kagan thought the non-economic harm was significant. Like not getting help from an interpreter.

KAGAN: But we have long recognised, Mr. Shanmugam, that discriminatory harm is often stigmatic in nature, that it can be very deep and very hurtful even if there is no economic harm of the kind you are talking about. SHANMUGAM: And yet Congress has made the judgment under these fundamental laws that I just referred to that damages for emotional distress are not available.

Other ways to obtain this damage exist, Shanmugam countered. As remedies available under state law.

Not only that, but people need to be made aware of the things they might be responsible for. The laws under which Cummings sued are silent on private remedies, so how would Prime Minister Rehab even know?

This is very different from other anti-discrimination laws which clearly state the damages you can receive.

The federal government sides with Cummings. Here’s Assistant Solicitor General Colleen Sinzdak pushing back on claims that damages for emotional distress can spiral out of control:

Sinzdak: …we’ve had 30 years of these types of damage awards available and while, while, while the respondent and their AMICI try to cite examples of high emotional distress awards, they are not simply not from this family of Statutes. And you have to assume they’ve boiled the oceans looking for exorbitant rewards, and they can’t find them.

The circuits are split on whether emotional distress is a foreseeable consequence of discrimination sufficient to warrant damages. Judges must determine what kind of case it really is and how it fits into the various related laws.

The latter case today concerns pension schemes. It’s hard to tell this in an exciting way. But when is your retirement money on the line? You can get excited very quickly.

Hear from counsel for Northwestern University employees who participated in the school’s pension plan. David Frederick:

FREDERICK: Wasting recipients’ money is reckless. Congress enacted ERISA to impose a duty that Justice Friendly said was the highest known to the law, a fiduciary duty.

Well, head to Congress on that front line about wasting money. But this is another story.

The employees allege that plan officials breached their fiduciary duties under a law known as ERISA, Employment Retirement Income Security Act. Paid too much for record keeping, paid too much for management fees.

Judge Elena Kagan explained it this way. I edited to make it clear.

KAGAN: Mr. Frederick, are you saying that basically Northwestern just didn’t use its existing influence, failed to negotiate, was fair — you know, there was a fair market in front of him, he — and he — he ignored it. It looks like negligence and fiduciary mismanagement.

Like any good lawyer, Frederick was not going to look a gift horse in the mouth.

Judge Thomas delved into the numbers and where to draw the line.

THOMAS: At some point, what difference should there be before it doesn’t matter anymore? I mean, you could say there could be a glaring case where they could have made a 20% return on investment, but you think that…they are making a 19% return. You disagree on what the strategy should be. I mean, so you’re saying there’s no limit for them, but, you know, there’s no stopping point for you either.

FREDERICK: Well, the stopping point for us, Judge Thomas, is objective reasonableness…

Several legal threads crossed the pleadings. For example, what must an ERISA applicant allege to declare a viable claim that the fees and expenses are too high?

Gregory Garre argued on behalf of Northwestern University to defend its handling of pension plans. He argued that his client cannot be held responsible for having higher cost investment options when he also allows participants to choose lower cost options. Moreover, the complaint is simply too vague.

Justice Gorsuch took his place in this question on judicial deference addressed to Frederick for employees:

GORSUCH: This raises questions about judicial competence and administration and areas of reasonable judgment. What direction would you like us to give? Because I don’t think you would say — want the courts to say 40 is a magic number and — and — and that choice is wrong. I mean, all things being equal, choice is usually a good thing.

Judge Kagan came to the employees’ defense with this hypothetical addressed to Garre:

KAGAN: Suppose there was a complaint that the fees they were paying were much higher than the comparative plans paid, and that was because they never went back to their archivists and used their bargaining power and really trampled the table and got lower prices and they never implemented the record keeping feature for bids and they never did a bunch of things that can cause lower prices record keeping costs. That’s enough, isn’t it?

GARRE: I think it’s much closer, and — and I don’t know the exact complaint.

Garre dodged the answer to that question.

ERISA disputes often go to the Supreme Court. This time, the judges seemed to be looking for common ground: a way to stem the tide of such lawsuits with a way to let a complaint develop enough to see if it has any merit.

And that’s this week’s legal case!


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