ERISA stands for The Employee Retirement Income Security Act of 1974and it is a federal law that sets minimum standards for most voluntarily established pension and health plans in private industry to provide protection for individuals in these pension and health plans. ERISA protects the assets of millions of Americans so that funds placed in retirement plans during their working lives will be there when they retire. The point of this article is concerned with ERISA governed health plans, not the pension plans.  ERISA governed health plans may enforce a subrogation or reimbursement provision through an action for constructive trust or equitable lien against a plan participant (health recipient) holding settlement funds.

The court distinguished its 2002 ruling in the Knudson case on the basis that the ERISA governed health plan there sued persons not holding the funds (which had been deposited in a Special Needs Trust).  The court declined to decide the application of the make whole doctrine but suggested in dicta that said defense would not apply to an action for equitable lien.  The court did not address the common fund doctrine which had been applied by both lower courts because it was included in the reimbursement provision in the plan.  This case is inconsistent with all 9th Circuit precedent since 1994 holding that ERISA plans cannot enforce their contractual reimbursement provisions under ERISA because 29 USC 1132(a)(3) only allows plans to sue for "equitable relief to enforce the terms of the plan."