Yes, it has been a LONG time. Family health challenges have focused attention on the practice…and my family. But I am back. And a LOT has happened.
Let’s begin with the recent past. For years the courts have struggled with the meaning of “appropriate equitable relief” in ERISA cases. Last year the U.S. Supreme Court handed down Cigna Corp. v. Amara, a case with far-reaching implications on the “equitable relief” front.
The plaintiffs in Amara brought suit under both Sections 502(a)(1)(B) and 502(a)(3) of ERISA. The former authorizes suits to enforce the right to plan benefits, the latter authorizes actions for equitable relief. The plaintiffs’ claimed that the defendants misled them in the description of benefits that would be available after a pension plan was converted to a cash balance plan. The plaintiffs presented evidence, in the form of statements contrary to plan terms, showing the employer had deliberately failed to educate plan participants about their post-transition cash balances.
The district court ruled in the plaintiff’s favor holding that the defendants “representations have become terms of the plan” and ordered the plan to calculate benefits under the modified terms. The Second Circuit affirmed the district court’s opinion on appeal.
The Supreme Court handed the defendants a pyrrhic victory holding that the plaintiff’s claims could not be stated under Section 502(a)(1)(B). Nonetheless, seven of the nine Justices (all but Scalia and Thomas) held open the possibility that the plaintiff’s claims could be stated under Section 502(a)(3). The case was remanded to the district court for further proceedings. The court observed that appropriate “equitable relief” under Section 502(a)(3) could include reformation, estoppel and “surcharge” i.e. monetary compensation.
In my next post I will explore the implications of this holding in more detail. I am glad to be back.