Federal Common Law and Gaps in Federal Statutes: The Case of ERISA Plan Limitation Periods for Section 502(a)(1)(B) Actions

This Note argues that federal courts should adopt a uniform national rule that upholds plan provisions modifying the limitation period for a section 502(a)(l)(B) action. Part I examines the reasoning of those courts that have borrowed state law to determine the validity of modifications of the limitation period applicable to actions arising under BRISA section 502(a)(l)(B) and under other federal statutes. Part I argues that those courts may have incorrectly characterized the validity of plan limitation periods as an issue of limitation law. As a consequence of this characterization, those courts have followed the Supreme Court’s rule that, when borrowing a state’s statute of limitations, federal courts should also borrow the state’s law regarding the “overtones and details” of the limitation period. Part I argues, however, that the validity of contractual limitation periods is not an overtone or detail of a statute of limitations, and thus that federal courts have erroneously applied the overtones or details principle as a justification for borrowing state law on the modification issue.

The next two Parts then examine other sources to determine whether – and how – courts should enforce plan modifications of applicable state limitation periods. Part II argues that the purpose behind the preemption of state law effectuated by ERISA section 514(a) suggests that federal courts should formulate a uniform national rule without reference to the law of any particular state. Because – as Part II also shows – there is reason to think that section 514(a) does not fully dispose of the issue, Part III looks to principles of federal common law for further support. Specifically, Part III identifies a list of factors that courts should consider when deciding whether to borrow state law in a suit arising under a federal statute, then applies these factors to the question of the validity of plan limitation periods. These principles lead to the simultaneous conclusions that (i) federal courts should adopt a uniform national rule governing the validity of plan limitation periods, and (ii) that this rule should declare reasonable plan limitation periods valid and enforceable.

Finally, Part IV rejects concerns that the rule recommended in Part III conflicts with the purposes or policies of BRISA. In particular, Part IV argues that the federal court habit of relying on preexisting common law to fill in gaps in federal statutes suggests that a similar practice in this instance is unlikely to conflict with Congress’s intent. Furthermore, Part IV concludes that upholding plan limitation periods is consistent with congressional intent even if enforcing such periods causes some meritorious section 502(a)(1)(B) claims to fail.