San Diego Law Review
In order to develop the federal common law of the Employee Retirement Income Security Act of 1974 (ERISA), courts must consider the history, foundations, and policies of ERISA. However, federal courts have yet to conduct this process. This failure is explained by either the fundamental nature of the American adversary system leading to the undermining of congressional intent, or the failure of the incompetent federal judiciary to follow legislative intent. Conclusively, the lack of developing federal common law has resulted in ERISA law that is hostile to participants and the policies that Congress intended ERISA to foster.
Although seldom following the proper principles for the development of the federal common law of the ERISA, the federal judiciary has developed a plan interpretive rule fostering the policies of ERISA. The interpretive rule uses a lay understanding principle, allows extrinsic evidence to determine that understanding as well as resolve ambiguities, and employs a default principle of construing the plan in favor of participants. Unfortunately, this interpretive rule is used only by some circuits, and only if the plan denies the plan administrator plan interpretive discretion. Once the judiciary and participants’ bar understand the foundations for this minor success, however, they can apply the proper plan interpretive rule to all ERISA plans and, hopefully, develop all the proper ERISA rules for the benefits-due lawsuit.
George Lee Flint, Jr., ERISA: Reformulating the Federal Common Law for Plan Interpretation, 32 San Diego L. Rev. 955 (1995).