Untrustworthy: ERISA’s Eroded Fiduciary Law

The trust law analogy has come to dominate judicial thinking about employee benefit plans. Yet despite its rise to rhetorical prominence, ERISA fiduciary law has been dramatically transformed by a series of uncoordinated, low-visibility judicial decisions on multiple fronts. These apparently unconnected case law developments reveal a startling pattern of mutually reinforcing restrictions on ERISA’s protection of pension and welfare benefits. This study chronicles ERISA’s trust law turn to expose how untrustworthy workers’ benefit safeguards have become. Both the scope and the intensity of fiduciary oversight have been radically pruned back in the courts. Notwithstanding the congressional declaration that attempts to relax workers’ federal fiduciary protections “shall be void as against public policy,” the Supreme Court has shown the way to curtail fiduciary obligations. That de facto or implicit exculpation, combined with unilateral employer control over both plan terms and plan interpretation, indicate that the federal courts have defanged—or deranged—ERISA’s fiduciary regime. Despite their importance to personal financial security and overall economic welfare, workers repeatedly discover the fragility of the interests they earn under employer-sponsored health insurance and retirement savings programs. The new property in employee benefits is, along multiple dimensions, remarkably weak property

Implementing ERISA: Of Policies and “Plans”

There have been dramatic changes in the benefits field since the passage of the Employee Retirement Income Security Act of 1974 (ERISA). Most notably, employers\u27 cutbacks in health insurance coverage and cost shifting in response to escalating medical care costs have spawned the current national debate over health care reform.19 Less visible, but similarly consequential, is the proliferation of special statutory exclusions from gross income for a variety of fringe benefits

ERISA\u27s Curious Coverage

The regulation of employee benefits entails a delicate balance—measures intended to improve the quality of health insurance or retirement programs, if taken too far, deter some employers from providing such benefits at all. Because the availability of benefits depends on employer decisionmaking, ERISA necessarily incorporates cost containment and the preservation of employer flexibility. This article examines the fit between ERISA’s policy goals and existing interpretations of ERISA\u27s reach. It shows that although the statute\u27s anti-abuse and protective policies have been influential in defining the scope and extent of benefit plan regulation, neither is pursued with single-minded consistency. In the main, this inconsistency is traceable to historical circumstance rather than reasoned compromise between competing objectives

The Ideological Component of Judging in the Taxation Context

Despite the vast number of systematic empirical studies of judicial behavior, we know surprisingly little about how and why judges reach decisions in the business and finance context. This void is due, in part, to scholars’ abiding focus on controversies involving civil rights and liberties; indeed, based on the extant literature, it would be easy to conclude that judges, particularly U.S. Supreme Court Justices, spend their days interpreting civil rights–type legislation to the exclusion of all other types of laws. Yet this conclusion is wide of the mark—even a simple count of the Supreme Court’s plenary docket reveals that the Court is more likely to address congressional statutes regulating business and the economy than civil rights legislation. The scholarly focus on civil rights cases, of course, is not itself problematic. The literature on judging in this area is both deep and rich; the studies are numerous and the findings robust. The problem, in our view, is that it is far from clear whether the findings in the civil rights literature can be generalized to all other areas of the law and, in particular, to cases involving statutes regulating business or the economy (“economic controversies”). To be sure, researchers find similarities in the decision making processes across issue areas, but just as often they find differences

Judging Statutes: Thoughts on Statutory Interpretation and Notes for a Project on the Internal Revenue Code

The more interesting features of the non-normative literature on statutory interpretation lie not in the distinctive conclusions it has generated, but rather in its commonalities. We see two as particularly interesting. First, many of the relevant studies focus on civil rights legislation. This holds true regardless of whether the work’s producers are legal academics or social scientists, whether the research is primarily qualitative or quantitative, or whether it finds its theoretical grounding in psychology, sociology, or economics. Second, almost all the studies—especially those of the large-n, quantitative variety—explore the outcomes reached by jurists, and not the rationale or justifications they invoke. To be sure, the outcomes under investigation differ from study to study—sometimes it is support for the government or not; in others, it is whether the judge reached a “liberal” or “conservative” decision. However, the unmistakable focus is on the result, to the neglect of the rationale. These are not criticisms of the extant literature. Quite the opposite: we firmly believe that by investigating outcomes reached in civil rights cases, this line of inquiry has revealed a great deal about the “judicial mind.” At the same time, we believe just as firmly that if we are to fully understand the determinants of statutory interpretation, then a continued emphasis on civil rights is, for reasons we specify in Part I, a potential problem. And, to the extent that we desire a more comprehensive picture of judicial behavior, an exclusive focus on outcomes is, for reasons we elaborate on in Part II, incomplete at best and misleading at worst. Accordingly, we have devised a project that aspires to address these concerns by (1) exploring Supreme Court tax opinions, a body of case law that, despite its importance, has received virtually no systematic attention, and (2) analyzing or taking into account both outcomes and rationales. At the end of the day, we hope that our attention to these matters will make a useful contribution to the literature on judging statutes

Judging Statutes: Interpretive Regimes

Theories of statutory interpretation abound. Scholars, judges and commentators have long puzzled over the best method to locate the meaning of a statute and to this end have proposed a range of approaches that rely on various forms of evidence, including statutory text, legislative intent, agency interpretations, cultural norms, and judicial precedent. These theories do not merely offer competing modes of analysis: they also highlight competition among and between federal actors for control over the law-making process. In this Symposium essay, we do not defend an interpretive approach; many others have done that. Nor do we seek to develop a novel understanding of statutory interpretation; others have done that as well. Rather our goal is something more modest: to provide a descriptive mapping of statutory interpretation in the business context - specifically, in disputes over the meaning of the Internal Revenue Code. To that end, we analyze every tax ase decided by the Supreme Court since Congress adopted the modern tax law, with an eye for identifying the various rationales deployed by the justices, as well as the some commonly held-beliefs about trends in statutory interpretation over time

Observations of Energetic-particle Population Enhancements along Intermittent Structures near the Sun from the Parker Solar Probe

Observations at 1 au have confirmed that enhancements in measured energetic-particle (EP) fluxes are statistically associated with "rough" magnetic fields, i.e., fields with atypically large spatial derivatives or increments, as measured by the Partial Variance of Increments (PVI) method. One way to interpret this observation is as an association of the EPs with trapping or channeling within magnetic flux tubes, possibly near their boundaries. However, it remains unclear whether this association is a transport or local effect; i.e., the particles might have been energized at a distant location, perhaps by shocks or reconnection, or they might experience local energization or re-acceleration. The Parker Solar Probe (PSP), even in its first two orbits, offers a unique opportunity to study this statistical correlation closer to the corona. As a first step, we analyze the separate correlation properties of the EPs measured by the Integrated Science Investigation of the Sun (IS⊙IS) instruments during the first solar encounter. The distribution of time intervals between a specific type of event, i.e., the waiting time, can indicate the nature of the underlying process. We find that the IS⊙IS observations show a power-law distribution of waiting times, indicating a correlated (non-Poisson) distribution. Analysis of low-energy (~15 – 200 keV/nuc) IS⊙IS data suggests that the results are consistent with the 1 au studies, although we find hints of some unexpected behavior. A more complete understanding of these statistical distributions will provide valuable insights into the origin and propagation of solar EPs, a picture that should become clear with future PSP orbits

Estimating the frequency of extremely energetic solar events, based on solar, stellar, lunar, and terrestrial records

The most powerful explosions on the Sun [...] drive the most severe space-weather storms. Proxy records of flare energies based on SEPs in principle may offer the longest time base to study infrequent large events. We conclude that one suggested proxy, nitrate concentrations in polar ice cores, does not map reliably to SEP events. Concentrations of select radionuclides measured in natural archives may prove useful in extending the time interval of direct observations up to ten millennia, but as their calibration to solar flare fluences depends on multiple poorly known properties and processes, these proxies cannot presently be used to help determine the flare energy frequency distribution. Being thus limited to the use of direct flare observations, we evaluate the probabilities of large-energy solar explosions by combining solar flare observations with an ensemble of stellar flare observations. We conclude that solar flare energies form a relatively smooth distribution from small events to large flares, while flares on magnetically-active, young Sun-like stars have energies and frequencies markedly in excess of strong solar flares, even after an empirical scaling with the mean activity level of these stars. In order to empirically quantify the frequency of uncommonly large solar flares extensive surveys of stars of near-solar age need to be obtained, such as is feasible with the Kepler satellite. Because the likelihood of flares larger than approximately X30 remains empirically unconstrained, we present indirect arguments, based on records of sunspots and on statistical arguments, that solar flares in the past four centuries have likely not substantially exceeded the level of the largest flares observed in the space era, and that there is at most about a 10% chance of a flare larger than about X30 in the next 30 years.Comment: 14 pages, 3 figures (in press as of 2012/06/18); Journal of Geophysical Research (Space Physics), 201