Tesch v. General Motors Corp.

CUDAHY, Circuit Judge,

concurring.

I think the legal analysis of the majority is hard to escape, but its economic justification of the result goes a bit too far. Of course, the majority pursues what is essentially a “there is no free lunch” view. Metropolitan must distribute the costs it incurred in avoiding a duplicate payment. Had the Brandts not been sued at their own expense, the costs of a possible duplicate payment would have been spread among all Plan participants.

But there is another aspect to the problem. Through their participation in the suit (at a cost of $11,557), the Brandts probably subsidized Metropolitan by substantially reducing the costs Metropolitan would otherwise have been forced to incur *365in defending the Tesch lawsuit on its own. This was an economic benefit reaped by the Plan and, ultimately, by all the other beneficiaries of the Plan (who, under the “no free lunch” principle, must share in the costs of Plan administration). Perhaps Metropolitan (and the beneficiaries) did not save the entire $11,557, but they may have saved a substantial part of that sum.

Therefore, the equities as between requiring the Brandts to shoulder all their own legal costs of defending the third party action — a significant fraction of the insurance benefits they received — and distributing those costs to all the Plan participants by requiring Metropolitan to assume them are not as clear-cut as the majority holds. Were it not for the apparently inescapable dictates of the statute and the cases, under these unusual facts, I believe that the Brandts might properly prevail. They may have sufficiently contributed to what would otherwise be a cost of the Plan and all its beneficiaries to justify an exercise of discretion by Judge Gordon in the district court.