US Airways can't share employee's lawsuit settlement without sharing legal costs, U.S. Supreme Court rules
US Airways Inc. can't grab the money an injured employee won in a lawsuit over a motor vehicle accident without sharing his legal costs because the company's health plan didn't spell out how to handle attorney fees, the Supreme Court ruled on Tuesday in a case from federal court in Pittsburgh.
Steve Baicker-McKee, a Duquesne University law professor, said the justices made it clear that common principles of fairness and equity can't overrule specific contract language.
“If the parties' agreement specifically addresses an issue, it doesn't really matter if it's fair,” he said.
In this case, the airline paid $66,866 in medical bills for James McCutchen, 57, of East Liverpool, Ohio, for injuries from a three-car accident in January 2007 on Route 60 near the Hopewell exit in Beaver County.
The accident killed one person and left two others with severe brain injuries. McCutchen survived emergency surgery but his injuries left him disabled, according to court documents. He sued and settled for $100,000 from his insurance company and $10,000 from the driver who caused the accident.
McCutcheon paid $44,000 in attorney fees and ended up with $66,000. US Airways demanded McCutchen pay it the $66,866 it spent on medical bills, regardless of how much of his damage award went to his attorneys.
McCutchen argued that US Airways had a claim only on the part of the award covering medical expenses and couldn't touch compensation for lost future earnings or pain and suffering.
U.S. District Judge David Cercone ruled the airline's health plan specifically allowed it to recover the full amount, but the 3rd U.S. Circuit Court of Appeals overturned his decision.
In a 5-4 ruling, the high court agreed with Cercone that McCutchen's contract allows the airline to recover the money it spent on medical claims, even if that cuts into the future earnings and pain and suffering awards, but the justices overturned his ruling that the airline wasn't liable for any of McCutchen's attorney fees.
Any other interpretation of the law “would put McCutchen $866 in the hole; in effect, he would pay for the privilege of serving as US Airways' collection agent,” Justice Elena Kagan said in the majority opinion.
The Supreme Court remanded the case back to Cercone.
“Well I guess that's better than nothing,” said McCutchen. He said he hadn't talked to his lawyer yet about the decision.
McCutchen's attorneys couldn't be reached for comment, nor could a US Airways representative. In the original lawsuit, US Airways still seeks more than $27,000 in attorney fees it spent suing McCutchen. Its pending motion is based on Cercone's ruling entirely in favor of the company.
Since the Supreme Court ruling partially overturns Cercone's ruling, the judge likely will require each side to cover its own legal costs, Baicker-McKee said.
When each side wins part of a lawsuit, “it's pretty common that (judges) will say no fees for either party,” he said.
Brian Bowling is a staff writer for Trib Total Media. He can be reached at 412-325-4301 or firstname.lastname@example.org.
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