The Business, Entrepreneurship & Tax Law Review


Sam Taddeo


The Supreme Court held in Firestone Tire & Rubber Co. v. Bruch that the review of administrators’ decisions to deny benefits under ERISA-qualified plans must be accorded a non-deferential, de novo standard of review. But what about top-hat plans? A top-hat plan is a type of nonqualified deferred compensation plan designed to avoid key ERISA provisions, including ERISA’s fiduciary provisions. In the decades since Firestone, this question has remained unanswered. What has occurred is a rift among the appellate courts, centered around a split between the Third and Seventh Circuits. This article addresses the dilemma and advocates for the implementation of the deferential arbitrary and capricious standard over de novo review. The following analysis employs original observations drawn from the cases, such as the overlap of the administrator and fiduciary positions, in constructing an argument centered around the theme of the mootness and irrelevance of de novo review.

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