Defendants argue that even if a plaintiff can sometimes pursue a Section 502(a)(1)(B) claim and a Section 502(a)(3) claim simultaneously, Currier cannot do so here because, assuming her factual allegations are correct, she will not require equitable relief to make her whole. Defendants assert that Currier “will be recompensed fully by an award of benefits under [Section] 502(a)(1)(B).” The Court disagrees.
Currier v. Entergy Corp. Emple. Benefits Comm., 2016 U.S. Dist. LEXIS 142471 * (E.D. La. Oct. 14, 2016)
Can a plaintiff assert a claim for benefits and also a claim for equitable relief? That was the issue in this recent case.
In the past the Fifth Circuit was of the opinion that the assertion of a 502(a)(1)(B) claim (claim for benefits) foreclosed the use of Section 502(a)(3) (equitable relief).
Section 502(a)(1)(B) of ERISA states that a plan participant or beneficiary may bring a civil action “to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan.” 29 U.S.C. § 1132(a)(1)(B).
Section 502(a)(3) states that a civil action may be brought:
by a participant, beneficiary, or fiduciary (A) to enjoin any act or practice which violates any provision of this subchapter or the terms of the plan, or (B) to obtain other appropriate equitable relief (i) to redress such violations or (ii) to enforce any provisions of this subchapter or the terms of the plan.
Since neither statute references the other and there is no ordering rule elsewhere in ERISA, one might assume that alleging claims under both would be acceptable.
Varity Corp. v. Howe
Nevertheless, in Varity Corp. v. Howe, the Supreme Court gave reason to doubt. As noted by the district court, the Supreme Court observed in that opinion that Section 502(a)(3) serves as a “safety net, offering appropriate equitable relief for injuries caused by violations that [Section] 502 does not elsewhere adequately remedy.”
And further, the Court stated that “we should expect that where Congress elsewhere provided adequate relief for a beneficiary’s injury, there will likely be no need for further equitable relief, in which case such relief normally would not be appropriate.”
So the Defendants moved to dismiss the plaintiff’s Section 502(a)(3) claim. The plaintiff countered that the U.S. Supreme Court’s decision in CIGNA Corp. v. Amara, 563 U.S. 421, 131 S. Ct. 1866, 179 L. Ed. 2d 843 (2011), implicitly overruled the Varity point of view.
CIGNA Corp. v. Amara
In Amara, the plaintiffs alleged that they were misled by an inaccurate summary plan description (“SPD”) into accepting a reduction in benefits. The Court noted that Section 502(a)(1)(B) only empowers courts to award beneficiaries the benefits they are due under the plan. Yet, benefits promised in an SPD but not contained within the plan itself are not benefits due “under the terms of the plan.”
Furthermore, the Court held that reformation of the plan to match the terms of the SPD was an equitable remedy only available under Section 502(a)(3). Thus, it remanded the case for a determination of whether such relief was appropriate under Section 502(a)(3).
The Plaintiff Prevails
Based on its interpretation of Amara, the district court held that a plaintiff can alternatively plead a Section 502(a)(1)(B) claim and a Section 502(a)(3) claim, “at least where there is a possibility that equitable relief may be necessary to make the plaintiff whole.”
Note: The defendants argued that even if Amara changed the law, the plaintiff should not be allowed to proceed with both claims “because, assuming her factual allegations are correct, she will not require equitable relief to make her whole since she “will be recompensed fully by an award of benefits under [Section] 502(a)(1)(B).” The court rejected the defendants’ argument, stating:
[Although the plaintiff] asserts one set of claims related to the decision to deny benefits under the terms of the Plan, for which Section 502(a)(1)(B) would in fact provide an adequate remedy, but she also asserts a separate set of claims related to her detrimental reliance on alleged misrepresentations made by Entergy Services agents as fiduciaries. The latter claims can be remedied only through Section 502(a)(3).
Fifth Circuit Cases – The court noted possible consistent opinions in Gonzalez v. Aztex Advantage, 547 F. App’x 424, 426 n.3 (5th Cir. 2013) (“Because we determine that the district court properly concluded that Gonzalez abandoned his equitable remedy claim and properly denied his motion to withdraw his nonobjection, we need not decide whether Amara would have entitled Gonzalez to any relief.”) And see, Gearlds v. Entergy Servs., Inc., 709 F.3d 448, 452 (5th Cir. 2013) (“Even assuming it is dictum, however, we give serious consideration to this recent and detailed discussion of the law by a majority of the Supreme Court.”); Singletary v. United Parcel Serv., Inc., 828 F.3d 342, 350 (5th Cir. 2016) (“We need not resolve whether subsection (a)(2) or (a)(3) is the better fit [because] [t]he claim could have been brought by referring to both sections.”).).
Other Circuits - The court noted that:
Multiple circuit courts have come to the same conclusion. Notably, the Second, Eighth, and Ninth Circuits have all recently interpreted the Amara decision as clarifying that a Section 502(a)(3) claim is not automatically undermined by the presence of a Section 502(a)(1)(B) claim. See New York State Psychiatric Association, Inc. v. UnitedHealth Group, 798 F.3d 125, 134 (2d Cir. 2015) (stating, in light of the Amara decision, that “it is important to distinguish between a cause of action and a remedy under § 502(a)(3)” because “Varity Corp. did not eliminate a private cause of action for breach of fiduciary duty when another potential remedy is available”); Silva v. Metro. Life Ins. Co., 762 F.3d 711, 727 (8th Cir. 2014) (holding, in light of Amara, that “Varity only bars duplicate recovery and does not address pleading alternate theories of liability”); id. at 730 (Gruender, J., concurring in part and dissenting in part) (“I agree with the court that Silva was permitted to plead simultaneously claims [*10] under both § 1132(a)(1)(B) and § 1132(a)(3) [because] at this early stage of litigation, an ERISA plaintiff may plead claims under both provisions in the alternative.”); Moyle v. Liberty Mut. Ret. Ben. Plan, 823 F.3d 948, 960 (9th Cir. 2016), as amended on denial of reh’g and reh’g en banc (Aug. 18, 2016) (“While Amara did not explicitly state that litigants may seek equitable remedies under [Section 502](a)(3) if [Section 502](a)(1)(B) provides adequate relief, Amara’s holding in effect does precisely that.”).
Fifth Circuit Authority In Question – Here are some cases that are in doubt post-Amara:
Tolson v. Avondale Indus., Inc., 141 F.3d 604, 610 (5th Cir. 1998).McCall v. Burlington N./Santa Fe Co., 237 F.3d 506, 512 (5th Cir. 2000); see also Walsh v. Lifer Ins. Co. of N. Am., No. 08-791, 2008 U.S. Dist. LEXIS 38052, 2008 WL 2026107, at *2 (E.D. La. May 9, 2008) Ctr. for Restorative Breast Surgery, L.L.C. v. Humana Health Benefit Plan of La., Inc., No. 10-4346, 2015 U.S. Dist. LEXIS 91942, 2015 WL 4394034, at *5-6 (E.D. La. July 15, 2015); Taylor v. Ochsner Found. Clinic Hosp., No. 09-4179, 2010 U.S. Dist. LEXIS 92029, 2010 WL 3528624, at *6 (E.D. La. Sept. 3, 2010); Walsh v. Lifer Ins. Co. of N. Am., No. 08-791, 2008 U.S. Dist. LEXIS 38052, 2008 WL 2026107, at *2-4 (E.D. La. May 9, 2008); Sullivan v. Monsanto Co., 555 F. Supp. 2d 676, 683-85 (E.D. La. 2008).
Practice Pointer: The viability of claims under both statutory provions is not automatic and could change during the course of a case. The Court noted that:
Because it is unclear at this point whether the Q & A document serves as an SPD and whether the breach of fiduciary duty claims regarding deliberate misrepresentations are sufficiently distinct from the claims requesting enforcement of the plan so as not to effectively constitute “repackaging” of the latter, the Court cannot decide whether Currier’s claim is more accurately grounded in the Pilots Plan itself or in enforcement of the Q & A document. (emphasis added).