Photo: Todd Leeuwenburgh
A landmark Supreme Court ruling on relief available under ERISA in employee benefit cases is bringing cases back to life that we thought were dead and gone.
In CIGNA v. Amara, the U.S. Supreme Court on May 16 ruled that ERISA’s enforcement provision allowing for “appropriate equitable relief” — ERISA Section 1132(a)(3) — aka Section 502(a)(3) — can be used to extract money from plans. Until then, courts had been very reticent to extract money from defendants in ERISA cases, because that was considered a form of “legal relief,” and ERISA only allows “equitable relief.” Up to that point, money could be extracted only under ERISA’s enforcement provision for “benefits due under the plan” — Section 1132(a)(1)(B) — which ended up denying payments unless a restrictive set of circumstances was met.
In the ruling, the Supreme Court expanded the reading of appropriate equitable relief, encouraging litigants previously denied remedies to try, try again (opinion starts on page 5).
The cases at issue are those in which a court recognizes that a plan (1) may have violated ERISA and (2) participants may have been hurt financially by the plan’s misdeed, but (3) a money award was not available.
Industry experts predicted that this ruling would open more doors to litigation, and they were not wrong: that started happening within days.
These cases have been reopened.
On May 31, in McCravy v. Metropolitan Life Insurance, the U.S. Department of Labor (DOL) filed an amicus brief arguing that “Appropriate equitable relief under ERISA 1132(a)(3) includes relief that makes injured participants and beneficiaries whole and thus permits the court to surcharge Metlife for the insurance proceeds that McCravy would have received but for the alleged fiduciary breaches.
On July 1, in Kenseth v. Dean Health Plans, DOL filed an amicus brief arguing that Kenseth is entitled to “appropriate equitable relief” in the form of a make-whole monetary recovery, and Dean is not entitled to profit from its fiduciary breach.
Now this case has been overturned
On June 28, in Rosario v. King & Prince Seafood Corp., the 11th U.S. Circuit Court of Appeals cited Amara as a reason to overturn a lower court ruling regarding available ERISA remedies.