Break from the Grind September 24, 2019

Good News! Pizza Might Protect Against Illness—If It’s Made in Italy

The 2019 Ig Nobel Prize winners have been announced.
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The 29th First Annual Ig Nobel Prize ceremony was held Thursday, September 12, 2019, at Harvard’s Sanders Theatre.

The Medicine Prize was awarded to Silvano Gallus for collecting evidence that pizza might protect against illness and death, if the pizza is made and eaten in Italy.

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Other prizes included:

  • Medical Education Prize: Karen Pryor and Theresa McKeon, for using a simple animal-training technique—called “clicker training”—to train surgeons to perform orthopedic surgery.
  • Biology Prize: Ling-Jun Kong, Herbert Crepaz, Agnieszka Górecka, Aleksandra Urbanek, Rainer Dumke, and Tomasz Paterek, for discovering that dead magnetized cockroaches behave differently than living magnetized cockroaches.
  • Anatomy Prize: You will have to click on the link to see the winner.
  • Chemistry Prize: Shigeru Watanabe, Mineko Ohnishi, Kaori Imai, Eiji Kawano, and Seiji Igarashi, for estimating the total saliva volume produced per day by a typical five-year-old child.
  • Engineering Prize: Iman Farahbakhsh, for inventing a diaper-changing machine for use on human infants.
  • Economics Prize: Habip Gedik, Timothy A. Voss, and Andreas Voss, for testing which country’s paper money is best at transmitting dangerous bacteria.
  • Peace Prize: Ghada A. bin Saif, Alexandru Papoiu, Liliana Banari, Francis McGlone, Shawn G. Kwatra, Yiong-Huak Chan, and Gil Yosipovitch, for trying to measure the pleasurability of scratching an itch.
  • Psychology Prize: Fritz Strack, for discovering that holding a pen in one’s mouth makes one smile, which makes one happier—and for then discovering that it does not.
  • Physics Prize: Patricia Yang, Alexander Lee, Miles Chan, Alynn Martin, Ashley Edwards, Scott Carver, and David Hu, for studying how, and why, wombats make cube-shaped poo.

Of note, this the second Ig Nobel Prize awarded to Patricia Yang and David Hu. They and two other colleagues shared the 2015 Ig Nobel Physics Prize, for testing the biological principle that nearly all mammals empty their bladders in about 21 seconds (plus or minus 13 seconds).

Improbable Research says the Ig Nobel Prizes honor achievements that make people LAUGH, and then THINK. The prizes are intended to celebrate the unusual, honor the imaginative—and spur people’s interest in science, medicine, and technology.

Compliance September 24, 2019

Supreme Court Asked to Review Case About Annuity Contracts in Retirement Plans

The question before the court is: May an ERISA plan participant or beneficiary seek disgorgement of unreasonable profits derived from a plan contract from a non-fiduciary party in interest?

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The plaintiff in a case alleging Great-West engaged in prohibited transactions has petitioned the U.S. Supreme Court to review the case.

In the case, the plaintiff alleged that Great-West engaged in self-dealing transactions prohibited under Employee Retirement Income Security Act (ERISA) Section 406(b), and caused the plaintiff’s retirement plan to engage in prohibited transactions with a party in interest in violation of ERISA Section 406(a). According to his complaint, Great-West had breached its general duty of loyalty under ERISA Section 404 by setting the credited rate of its Key Guaranteed Portfolio Fund for its own benefit rather than for the plans’ and participants’ benefit; setting the credited rate artificially low and retaining the difference as profit; and charging excessive fees.

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The 10th U.S. Circuit Court of Appeals agreed with a District Court ruling that Great-West was not a fiduciary in this matter and that the plaintiff had not adduced sufficient evidence to impose liability on Great-West as a non-fiduciary party in interest.

In his petition to the Supreme Court, the plaintiff says Great-West’s conduct violates ERISA’s clear rules barring parties in interest from using plan assets (i.e., the fund contract) to benefit themselves. He points out that the U.S. Supreme court previously held in Harris Trust & Sav. Bank v. Salomon Smith Barney that where a party in interest violates those rules, plan participants can force them to disgorge their ill-gotten gains. Multiple courts of appeals have held the same.

The plaintiff says the 10th Circuit “flouted that rule, holding that disgorgement was unavailable because the plan asset at issue was the fund contract—not specific property over which petitioner could himself assert title.” So, the question presented to the high court is: May an ERISA plan participant or beneficiary seek disgorgement of unreasonable profits derived from a plan contract from a non-fiduciary party in interest?

According to the petition, the sole question before the lower courts was whether equitable relief was available in the form of disgorgement of Great-West’s unreasonable profits derived from its contracts with ERISA plans. The plaintiff argues that by answering “no,” the courts erroneously distinguished plan contracts from any other type of plan asset, the use of which could support disgorgement. “There is no basis in law or logic for the Tenth Circuit’s new “plan contract” exception. It strays from an on-point decision of this Court, splits from the decisions of other courts of appeals, and frustrates congressional intent,” the petition states.

Again the plaintiff notes that, in Harris Trust, the Supreme Court held that ERISA authorizes disgorgement from non-fiduciaries of profits they derive from wrongfully transferred trust property. The 10th Circuit recognized in its the decision that plan contracts are trust property. But instead of treating these contracts like any other plan asset, as other Circuits have in analogous cases, the 10th Circuit mistakenly believed it could not rely on such contracts to award disgorgement, the plaintiff argues.

“This defied not only judicial precedent, but also legislative intent. There is no reason to believe that Congress wanted to let those who engage in prohibited transactions keep their ill-gotten gains,” the petition says.

The plaintiff also argues that the appellate court’s distinction makes no sense, as most prohibited transactions occur via contract. “Unless profit derived from a contract suffices, there will be hair-splitting and uncertainty in the 10th Circuit over whether the profit was derived from a contract as opposed to some other type of plan asset. That will happen even where, as here, a prohibited transaction involving plan assets clearly took place,” the plaintiff contends. He also says litigants with viable prohibited transaction claims against non-fiduciaries will not know how to frame their requests for relief, and lower courts will not know how to adjudicate them. In addition, he says the remedial scheme that Congress crafted will suffer.

“The question presented thus satisfies the Court’s traditional criteria for plenary review. Review is warranted to restore uniformity to ERISA’s remedial scheme,” the petition states.

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