The ERISA Edit: Supreme Court Issues Key Decisions Impacting Employee Benefits
Employee Benefits Alert
Supreme Court Says Judges Lack Authority to Issue Universal Injunctions
On June 27, 2025, the Court issued its decision in Trump v. Casa, No. 24A884, holding that "universal injunctions likely exceed the equitable authority that Congress has given to federal courts." The universal injunction, sometimes referred to as a "nationwide injunction," is an equitable remedy that prohibits the government from enforcing a law or policy found unlawful against all persons, not only the parties to the lawsuit. The issue of a district court's authority to universally bar enforcement of a law reached the Court through three separate challenges to the Trump administration's executive order (E.O.) ending birthright citizenship under the Fourteenth Amendment. Three lower courts granted universal preliminary injunctions preventing enforcement of the E.O. on constitutional grounds. The government appealed to the Court for a partial stay of the injunctions on grounds that the lower courts exceeded their authority.
In a 6-3 opinion falling on ideological lines, the Court granted the Trump administration's request, asserting that the Judiciary Act of 1789, which delineates the jurisdiction of federal courts, does not confer authority on federal courts to issue injunctive relief to non-parties. According to the majority opinion written by Justice Amy Coney Barrett, the only equitable remedies available under the Judiciary Act are those "'traditionally accorded by courts of equity' at our country's inception." The majority rejected the respondents' contention that there were analogous remedies available to courts of equity in the eighteenth century, concluding, "The universal injunction was conspicuously nonexistent for most of our Nation's history. Its absence from 18th- and 19th-century equity practice settles the question of judicial authority." The opinion suggests that the class action is the better analog for respondents' historical arguments, as class actions accord broad relief, but only to parties.
Responding to the dissent's charge that the majority abdicates the judiciary's responsibility to check a president's abuses of power, the majority says, "federal courts do not exercise general oversight of the Executive Branch; they resolve cases and controversies consistent with the authority Congress has given them." As such, the Court ordered the lower courts to revise the injunctions such that they are no broader than necessary "to provide complete relief to each plaintiff with standing to sue." The decision did not address the merits of the E.O. on birthright citizenship. The principal dissent penned by Justice Sonia Sotomayor for the three dissenting justices rejects the majority's analysis, arguing that the E.O.'s "patent unlawfulness reveals the gravity of the majority's error and underscores why equity supports universal injunctions as appropriate remedies in this kind of case."
The impact of the Court's decision in Trump v. Casa on legal challenges against the government is hard to overstate. Litigants seeking to challenge the lawfulness of statutes or government policies may not now rely on injunctive relief, potentially available at the initial stages of a lawsuit, to prevent widespread or nationwide enforcement. Instead, to obtain broad relief, more litigants may file suit in multiple jurisdictions, risking conflicting legal rulings, or turn to class action litigation, which is more costly and time-consuming and may delay courts in reaching the merits of any legal challenges, leaving a contested law or policy in place in the meantime.
Supreme Court Reverses Fifth Circuit in ACA Preventive Services Mandate Challenge
In another closely watched case, Kennedy v. Braidwood Management, Inc., No. 24-316, the Court issued a decision on June 27, 2025, upholding the appointment of U.S. Preventive Services Task Force (PSTF) members by the Secretary of the Department of Health and Human Services (HHS). According to the 6-3 decision delivered by Justice Brett Kavanaugh, PSTF members are inferior officers of the U.S. "directed and supervised" by the Secretary, a principal officer, who can both remove them at-will and "block Task Force recommendations before they take effect." The Court held that, under this structure, PSTF members need not be appointed by the president with the advice and consent of the Senate pursuant to the Appointments Clause in Article II of the Constitution as the plaintiffs-respondents alleged.
Since passage of the Affordable Care Act (ACA), the recommendations of the PSTF serve as the basis for some preventive services coverage requirements applicable to most health insurers and group health plans. However, the PSTF pre-dated the ACA, and in 1999, Congress authorized the Director of the Agency for Healthcare Research and Quality (AHRQ) to appoint PSTF members. The Court reasoned that a congressionally ratified Reorganization Plan transferred all of the AHRQ director's functions to the secretary in 1984, so when Congress gave appointment authority to the director in 1999, that authority vested in the secretary. Beginning in June 2023, during the pendency of this litigation, the secretary commenced appointing PSTF members pursuant to these authorities.
The secretary's authority and control over PSTF members and their recommendations under the governing law was central to the Court's finding that they are inferior officers:
The Secretary's authority to remove Task Force members at will in turn enables him to supervise and direct them. When a Task Force member makes a decision that the Secretary disagrees with, the Secretary may remove that member. In other words, the Secretary "may consider the decision after its rendition as a reason for removing" the Task Force member, "on the ground that the discretion regularly entrusted to" that member "has not been on the whole intelligently or wisely exercised."
The Court also emphasized the ACA's requirement that the secretary establish a "minimal interval" of not less than one year between when the PSTF's recommendations are issued and when group health plans and insurers must cover recommended services without cost-sharing. The ability of the secretary to request reconsideration of recommendations by the PSTF or "remove and replace Task Force members who refuse" during this interval, giving the secretary the power to "review and block" recommendations, renders those recommendations not legally binding and non-final "unless permitted" by the secretary, further supporting the Court's conclusion as to the PSTF members' inferior officer status.
Significantly, the Court rejected the plaintiffs-respondents' assertion that the legal requirement that PSTF members and their recommendations "be 'independent and, to the extent practicable, not subject to political pressure'" renders those members not removable at-will. According to the Court, "the requirement that Task Force members be 'independent' is best read to mean that Task Force members must not be unduly influenced by their outside affiliations." The Court opined that "even if we were to interpret 'independent' to apply to political pressure, the phrase 'independent and, to the extent practicable, not subject to political pressure' would mean only that Task Force members are generally free from the Secretary's influence in their formulation of recommendations in the first instance. The Secretary would still retain power to review and block recommendations in the minimum 1-year period before the recommendations take effect" (emphasis in original).
Justice Clarence Thomas, in his dissent, stated that he "would remand for the Fifth Circuit to consider the important threshold question that it skipped: whether the Secretary has the statutory power to appoint the Task Force." According to the dissent:
[t]he Secretary may appoint the Task Force's members only if (1) Congress has vested in the Secretary the power to appoint them, and (2) the members are inferior officers under the Appointments Clause. The answer to the first question significantly affects the analysis of the second question. But, no court has passed on the first question, and this Court has had only a limited opportunity to consider it. We should resolve the statutory challenge to the Secretary's appointment authority before addressing the constitutional challenge.
The decision upholding the PSTF members' appointments answers a years-long question about whether Braidwood would alter the framework under which ACA-mandated preventive services are determined. While the framework remains intact, the decision recognizes expansive authority on the part of the secretary to review, alter, or reject the PSTF's recommendations.
Supreme Court Denies Review of Tenth Circuit's Pharmacy Benefit Manager Law ERISA Preemption Ruling
On June 30, 2025, the Court ended its term with a denial of Oklahoma's petition for certiorari in Pharmaceutical Care Management Association v. Mulready, No. 23-1213. As a result, the 2023 decision of the Court of Appeals for the Tenth Circuit finding key components Oklahoma's Patient's Right to Pharmacy Choice Act preempted by ERISA stands.
In the News
Joanne commented in Law360 on a series of DOL policy reversals following President Trump's return to office.
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