US AIRWAYS, INC. v. McCUTCHEN

[CallawayGolf]

They did get spanked in court. I, for one resent the notion presented here by some that it was his "High Priced Lawyer" who got him something he didn't deserve. If you read the decision and some of the underlying case laws, US Airways was trying to gain what the court called a "Windfall" and under most legal doctrine that's wrong.

As I said earlier, the fact that US went after him id yet another clue piled upon the mountain of evidence which accurately displays US Airways Senior Management's attitude towards employees.

US won this case in the lower court based on a valid interpretation of the law. The appellate court overturned the lower court's decision based on a different interpretation of the same law (or giving preference to an individual over the deeper pockets of the company). The point is that the trustees of the employees' medical insurance fund acting under a federally-mandated fiduciary responsibility requirement had enough justification of their position to get the case into federal court and prevail in that jurisdiction. That means that failing to take this case to court would have been a failure of fiduciary responsibility and the federal government vial the DOL could have taken action against the trustees for a failure of protecting employee funds held in trust. Not only that, but the employees who would have been harmed by this fiduciary failure could have brought a class action lawsuit against the trustees for e same thing. How difficult is that to understand? As I said before not a single dime of the money regained via this lawsuit would have enriched the corporate officers or the shareholders because of how the DOL structured the self-funded insurance program. Corporate greed has nothing to do with this. If you have ever been appointed as fiduciary with a federally mandated responsibility to protect someone else's money, you wouldn't be trying to turn this into an attack on Doug and Scott because you would actually understand the implication of a failure of that duty.

I'm not sure what you would call a lawyer who takes $40-60k in fees from a $10k injury settlement, but I certainly wouldn't classify him as having the best interests of his client in mind. Remember the $100k came from an under insurance fund which probably resulted in filling out a form and sending it in to be reviewed by a independent panel. Not a lot of lawyering needed for that big payout.

 

[SparrowHawk]

US won this case in the lower court based on a valid interpretation of the law. The appellate court overturned the lower court's decision based on a different interpretation of the same law (or giving preference to an individual over the deeper pockets of the company). The point is that the trustees of the employees' medical insurance fund acting under a federally-mandated fiduciary responsibility requirement had enough justification of their position to get the case into federal court and prevail in that jurisdiction. That means that failing to take this case to court would have been a failure of fiduciary responsibility and the federal government vial the DOL could have taken action against the trustees for a failure of protecting employee funds held in trust. Not only that, but the employees who would have been harmed by this fiduciary failure could have brought a class action lawsuit against the trustees for e same thing. How difficult is that to understand? As I said before not a single dime of the money regained via this lawsuit would have enriched the corporate officers or the shareholders because of how the DOL structured the self-funded insurance program. Corporate greed has nothing to do with this. If you have ever been appointed as fiduciary with a federally mandated responsibility to protect someone else's money, you wouldn't be trying to turn this into an attack on Doug and Scott because you would actually understand the implication of a failure of that duty.

I'm not sure what you would call a lawyer who takes $40-60k in fees from a $10k injury settlement, but I certainly wouldn't classify him as having the best interests of his client in mind. Remember the $100k came from an under insurance fund which probably resulted in filling out a form and sending it in to be reviewed by a independent panel. Not a lot of lawyering needed for that big payout.

Client signed the deal with the Lawyer. It's a private matter. Mr McCutchen clearly felt that he received bale for the dollars expended. US Airways is self insured so in the end it's their decision over who gets paid and how.

The fiduciary responsibility argument is a weak one giveb that as I demonstrated that when self insured the Company can do pretty much as it chooses in regard to their interpretation of their policy regarding reimbursement. IOW they have/had the opportunity to do the right thing. As usual they didn't. They choose not to, hiding behind the fiduciary responsibility argument to justify their greed.

Sadly this type of behavior is to be expected. Every day you wake up to choices to be made. For Mr Parker and the rest of the Tempe Clown Posse their first decision is to how to enrich themselves at the expense of employees & customers.

You've come on these boards and have, (to your credit) been very open regarding your faith. When I read your posts on this topic several thoughts occur to me. One is that you must have missed the verse in Matthew where Jesus is speaking about how to treat people who maybe aren't as well off. "Whatsoever you do unto the least of my brethren you do unto me also". At this time in his life, Mr McCutchen certainly qualifies as one of the least of the brethren.

Doug Parker and the entire Management had options as to how to treat one of the least of the brethren. This verse from Titus 1:16 sums up the actions of US Airways rather well . "They profess that they know God; but in works they deny him, being abominable, and disobedient, and unto every good work reprobate."

 

[CallawayGolf]

Client signed the deal with the Lawyer. It's a private matter. Mr McCutchen clearly felt that he received bale for the dollars expended. US Airways is self insured so in the end it's their decision over who gets paid and how.

The fiduciary responsibility argument is a weak one giveb that as I demonstrated that when self insured the Company can do pretty much as it chooses in regard to their interpretation of their policy regarding reimbursement. IOW they have/had the opportunity to do the right thing. As usual they didn't. They choose not to, hiding behind the fiduciary responsibility argument to justify their greed.

Sadly this type of behavior is to be expected. Every day you wake up to choices to be made. For Mr Parker and the rest of the Tempe Clown Posse their first decision is to how to enrich themselves at the expense of employees & customers.

You've come on these boards and have, (to your credit) been very open regarding your faith. When I read your posts on this topic several thoughts occur to me. One is that you must have missed the verse in Matthew where Jesus is speaking about how to treat people who maybe aren't as well off. "Whatsoever you do unto the least of my brethren you do unto me also". At this time in his life, Mr McCutchen certainly qualifies as one of the least of the brethren.

Doug Parker and the entire Management had options as to how to treat one of the least of the brethren. This verse from Titus 1:16 sums up the actions of US Airways rather well . "They profess that they know God; but in works they deny him, being abominable, and disobedient, and unto every good work reprobate."

You aren't making sense. How does corporate greed play in when the money is held in a trust for employees future medical expenses? If the trust runs dry the rates employees pay for coverage goes up or the money available for pay increase goes down because employees overhead costs go up. Your argument is baseless since none of that effects the officers pay except in seeing their own insurance rates go up which is nothing compared to someone working on the front line.

Corporations cannot get into heaven, only people can by faith alone, not by their deed whether good or bad. I reject any notion that a corporation has an obligation to be generous in the same way a person should be. As a consumer or employee I would much prefer that corporations or businesses charged what the free-market required for their goods and services and then paid their employees whatever the free-market required for the skills and knowledge they needed. Giving things away to people unless it increases revenue or net income should not be a consideration. People should be generous and follow good moral conduct or Biblical commands on a personal level because that is the only time doing so is truly generous and meaningful to both the giver and the givee.

You can't evaluate Doug the person in the context of Doug the CEO who reports to a BOD and shareholders and has a responsibiliy to them to follow the law and protect their interests above his own, that fiduciary thing again. Since you claim to know the condition of Doug's generosity or greed level, why don't you tell us how much Doug has given to charity on an annual basis from his own bank account? Last I checked he was on the board of the United Way and he wouldn't hold that position unless he personally donated to them in rather impressive amounts compared to you and me. Now I forget, does the United Way support people in need? Do they provide assistance for those going through hard times? How does that fit into your paradigm about the evil Doug Parker?

 

[SparrowHawk]

You aren't making sense. How does corporate greed play in when the money is held in a trust for employees future medical expenses? If the trust runs dry the rates employees pay for coverage goes up or the money available for pay increase goes down because employees overhead costs go up. Your argument is baseless since none of that effects the officers pay except in seeing their own insurance rates go up which is nothing compared to someone working on the front line.

Corporations cannot get into heaven, only people can by faith alone, not by their deed whether good or bad. I reject any notion that a corporation has an obligation to be generous in the same way a person should be. As a consumer or employee I would much prefer that corporations or businesses charged what the free-market required for their goods and services and then paid their employees whatever the free-market required for the skills and knowledge they needed. Giving things away to people unless it increases revenue or net income should not be a consideration. People should be generous and follow good moral conduct or Biblical commands on a personal level because that is the only time doing so is truly generous and meaningful to both the giver and the givee.

You can't evaluate Doug the person in the context of Doug the CEO who reports to a BOD and shareholders and has a responsibiliy to them to follow the law and protect their interests above his own, that fiduciary thing again. Since you claim to know the condition of Doug's generosity or greed level, why don't you tell us how much Doug has given to charity on an annual basis from his own bank account? Last I checked he was on the board of the United Way and he wouldn't hold that position unless he personally donated to them in rather impressive amounts compared to you and me. Now I forget, does the United Way support people in need? Do they provide assistance for those going through hard times? How does that fit into your paradigm about the evil Doug Parker?

If we are as we profess, a Christian nation and assuming that Mr Parker goes to church (If he's not to hung over) and has been baptized as a Christian he cannot leave his faith in the Executive washroom. Faith, like morals, values, ethics, honor and integrity are not a sometime thing. You either possess those traits or you don't! This traits are not on a dimmer switch for your convenience, There is only an On/Off switch, either you are or you aren't! No Grey, No Middle ground.

IMO Doug is on the United Way board for PR in the community where US is one of the largest employers. The United Way is one charity that will never get dollar one from me and the reasons are personal, not stemming from the semi recent allegations f fraud waste and abuse. I'd respect him a whole lot more if we was involved with the Salvation Army. Finer people in this world I've never met. They live what we preach.

Yes, the money in the insurance pool is held in trust by law and that's as it should be. Truth is, ONE call down the hall to the Law Department ordering the attorney's to NOT go after Mr McCutchen is within his span of control. The plan is solvent and truth is these kinds of things don't happen all that much on a percentage basis and if he had the appropriate morals Mr Parker had a choice before this ever got to court. He had the opportunity to demonstrate his Christian Charity in a very up close and personal way. He chose not to and therein lies the answer to many of the Labor Relations issues plaguing US Airways.

 

[CallawayGolf]

If we are as we profess, a Christian nation and assuming that Mr Parker goes to church (If he's not to hung over) and has been baptized as a Christian he cannot leave his faith in the Executive washroom. Faith, like morals, values, ethics, honor and integrity are not a sometime thing. You either possess those traits or you don't! This traits are not on a dimmer switch for your convenience, There is only an On/Off switch, either you are or you aren't! No Grey, No Middle ground.

IMO Doug is on the United Way board for PR in the community where US is one of the largest employers. The United Way is one charity that will never get dollar one from me and the reasons are personal, not stemming from the semi recent allegations f fraud waste and abuse. I'd respect him a whole lot more if we was involved with the Salvation Army. Finer people in this world I've never met. They live what we preach.

Yes, the money in the insurance pool is held in trust by law and that's as it should be. Truth is, ONE call down the hall to the Law Department ordering the attorney's to NOT go after Mr McCutchen is within his span of control. The plan is solvent and truth is these kinds of things don't happen all that much on a percentage basis and if he had the appropriate morals Mr Parker had a choice before this ever got to court. He had the opportunity to demonstrate his Christian Charity in a very up close and personal way. He chose not to and therein lies the answer to many of the Labor Relations issues plaguing US Airways.

I have know knowledge of what Doug's relationship with the Lord is. I've heard rumors that indicate he doesn't pay God much attention but I certainly would know and therefore cannot ask that he live according to principles that he may have never confessed submission to. Regardless, a company is different than a person and they should engage in legal business practices that achieve the goals set by the owners/shareholders of the company. I don't expect to see US Airways planes flying in the new heaven and new earth that is coming anymore than I expect to see Baptist, or Lutheran or Calvary Chapel churches there either. All these human institutions will pass away leaving only what God establishes when He makes all things new.

I guess you will never understand the responsibilities of a fiduciary based on how easily you dismiss them on this discussion. The law requires dispassionate responsible oversight and this action was fully consistent with those requirements. Take the federal DOL law out of the way and let US run their employee medical benefits according to their own management decision (i.e. no federal fiduciary requirement), and Doug might have done just as you say. Not only was there no direct profit or benefit to Doug for fulfilling his fiduciary responsibilities over this claim, you can be absolutely certain that this case cost Doug and the shareholders far more that the $20k or whatever they were trying too recover on behalf of the trust. If it was just that simple and someone from HR or Legal came to Doug with a spreadsheet (you know they ones you think he spends every waking moment looking at) and said its going to cost us $200k to recover this $20k then what do you think his management decision would have been? The fact that US took this to federal court and then continued through to appeal says that they felt compelled to act on behalf of the ERISA fund as a matter of corporate responsibility and law. If you can't accept that then your fooling yourself as to what the real issues you have with this are.

 

[nycbusdriver]

If we are as we profess, a Christian nation...

The wing-nut righties profess that this is a Christian nation. But anyone with reading comprehension better than a 9-year-old can see by a cursory reading of the New Testament that the powers and structure of this nation bear no resemblance to what Jesus lived or taught. My guess is that Jesus would be out with the Occupy Wall Street movement right now, not sitting high up in Rockefeller Center making decisions about how to finance improvement to weapons of mass destruction and sell them clandestinely to third-world dictators.

 

[SparrowHawk]

The wing-nut righties profess that this is a Christian nation. But anyone with reading comprehension better than a 9-year-old can see by a cursory reading of the New Testament that the powers and structure of this nation bear no resemblance to what Jesus lived or taught. My guess is that Jesus would be out with the Occupy Wall Street movement right now, not sitting high up in Rockefeller Center making decisions about how to finance improvement to weapons of mass destruction and sell them clandestinely to third-world dictators.

Well it seems that we've opened up the centuries old argument that asks "Can a rich man enter Heaven"

Was it really Necessary to call conservative Christians "Nuties"? I live in the heartland now and I have to tell you that there are a lot of those so called "Nuties" out here and I have to tell you while I disagree with their views more often than not they are some of the nicest most sincere people I've ever met.

 

[nycbusdriver]

Well it seems that we've opened up the centuries old argument that asks "Can a rich man enter Heaven"

Was it really Necessary to call conservative Christians "Nuties"? I live in the heartland now and I have to tell you that there are a lot of those so called "Nuties" out here and I have to tell you while I disagree with their views more often than not they are some of the nicest most sincere people I've ever met.

The question is: In light of the New Testament life and teachings of Jesus, are they really Christians as Jesus would have them be? Or, are they more about judging their fellow man, worshipping the dollar and marginalizing those who they perceive as different from themselves. There are really very personable people out there that fit that description, and they lead what might be considered exemplary lives. I have no problem with that. Absolutely none. As a Christian, I must accept them as fellow children of God. But sitting in church on Sunday does not make one Christian any more than sitting in a garage on Sunday would make one a car.

 

[nycbusdriver]

Well it seems that we've opened up the centuries old argument that asks "Can a rich man enter Heaven"

Was it really Necessary to call conservative Christians "Nuties"? I live in the heartland now and I have to tell you that there are a lot of those so called "Nuties" out here and I have to tell you while I disagree with their views more often than not they are some of the nicest most sincere people I've ever met.

Oh, and a rich man certainly can enter heaven. Not a problem.

 

[Iclubbabyseals]

Oh, and a rich man certainly can enter heaven. Not a problem.

Thank you.

 

[SparrowHawk]

Oh, and a rich man certainly can enter heaven. Not a problem.

Some sects would beg to differ, but I'm on your side.

 

[Iclubbabyseals]

Well it seems that we've opened up the centuries old argument that asks "Can a rich man enter Heaven"

Was it really Necessary to call conservative Christians "Nuties"? I live in the heartland now and I have to tell you that there are a lot of those so called "Nuties" out here and I have to tell you while I disagree with their views more often than not they are some of the nicest most sincere people I've ever met.

I lived in the mid-west for several years and, while I still know many who are the nicest and most sincere people, they are still "Nuties" when it comes to life. I mean, total whack-os. LIke the Amish doing home invasions to shave off the beards of those deemed not worthy, just like the Taliban. Oh, gosh. Sorry for the political side.

 

[necigrad]

So I finally read the decision. I'd side with the company over the employee 60/40, and please let me qualify that. There was an agreement that the company be reimbursed from any settlement (my 60%) HOWEVER I don't see how anyone could buy that that is legal. Any settlement for medical expenses, sure, but not pain and suffering, property, and the like (my 40%).

I have a monumentally strong opinion of disdain for his lawyer and (I hate doing this, but again I'll qualify) the 3rd Circuit Justices. His lawyer should have seen this coming. The lawyer should have only accepted a settlement that:

• Did not include reimbursement for medical expenses or one that factored in the potential for a claim against that reimbursement
• Ensured that his client would net money from the settlement

I'm flat out appalled at the Justices. Not for their decision, I refuse to imply that I know better then them. My issue is their ignoring case law. By their own admission their contemporaries in other districts (note the plurality) saw things differently in similar cases. Granted case law at the Circuit level is not "legally binding" in other circuits, but it is case law and relevant for consideration. The fact that they disagreed with MULTIPLE other Circuit decisions brings into question their decision making. Had this not come up in the past, or maybe only in one other Circuit, it would be fine, but not multiple ones. It's bad enough to have case law apply in one Circuit and not the rest. This is creating a situation where case law applies in SEVERAL Circuits and then the 3rd comes along and say "But not here".

There's some bad decisions all around. I'd really LOVE to see this before the Supreme Court.

 

[SparrowHawk]

So I finally read the decision. I'd side with the company over the employee 60/40, and please let me qualify that. There was an agreement that the company be reimbursed from any settlement (my 60%) HOWEVER I don't see how anyone could buy that that is legal. Any settlement for medical expenses, sure, but not pain and suffering, property, and the like (my 40%).

I have a monumentally strong opinion of disdain for his lawyer and (I hate doing this, but again I'll qualify) the 3rd Circuit Justices. His lawyer should have seen this coming. The lawyer should have only accepted a settlement that:

• Did not include reimbursement for medical expenses or one that factored in the potential for a claim against that reimbursement
• Ensured that his client would net money from the settlement

I'm flat out appalled at the Justices. Not for their decision, I refuse to imply that I know better then them. My issue is their ignoring case law. By their own admission their contemporaries in other districts (note the plurality) saw things differently in similar cases. Granted case law at the Circuit level is not "legally binding" in other circuits, but it is case law and relevant for consideration. The fact that they disagreed with MULTIPLE other Circuit decisions brings into question their decision making. Had this not come up in the past, or maybe only in one other Circuit, it would be fine, but not multiple ones. It's bad enough to have case law apply in one Circuit and not the rest. This is creating a situation where case law applies in SEVERAL Circuits and then the 3rd comes along and say "But not here".

There's some bad decisions all around. I'd really LOVE to see this before the Supreme Court.

It appears that the court felt US Airways was trying to reap a "Windfall" in seeking to recover ALL of the money and that's what the court had difficulty with. There is a certain level of Judicial Discretion when interpreting what is fair and this Judge or panel felt that in attempting to recover every last dime, US had gone to far.

This is not a case where some Ambulance Chasing Lawyer got his client a fat settlement. No "My Neck, My Back, My new Cadillac" here. Mr McCutchen is permanently and irreversibly maimed as a result of an accident that occurred through no fault of his own. Given what insurance doesn't cover, his legal bills, the ongoing aspect of his pain is likely why the Court ruled in his favor. Ordering him to repay in full from what are likely limited assets was a remedy the Court and I found unacceptable.

US Airways had choice and they chose as they always do to try to bleed every last dime out of someone and lost. As they should have. I'll concede that watching my former Co-worker "Dave" and the way my employer handled a similar situation has likely colored my view on the issue. US Airways had the opportunity to do the right thing. They could have made a settlement that made them less than 100% whole and spared their employee the agony of being injured and having to fight your employer. BUT as usual the Tempe Clown Posse chose to do the wrong thing and I'd argue in the most vigorous manner possible that their action actions were not in the best interests of the Shareholders or Employees.

 

[john john]

District Judge Julio Fuentes, writing the unanimous opinion, said that Congress designed ERISA to protect employee pensions and benefits by providing pension insurance, enumerating certain specific characteristics of pension and benefit plans, and setting forth fiduciary duties for the managers of both pension and nonpension plans.

The Supreme Court has repeatedly observed that "ERISA is a comprehensive and reticulated statute, the product of a decade of congressional study of the Nation's private employee benefit system," he wrote.

The appeals judges rejected US Airways' claim that the application of equitable principles will increase plan costs and premiums.

"US Airways cannot plausibly claim it charged lower premiums because it anticipated a windfall," the opinion stated.
http://www.legalnewsline.com/news/234431-us-airways-loses-appeal-in-third-circuit