Yesterday, the Second Circuit ruled on two important issues of note for ERISA plan sponsors and plan fiduciaries.

In Thurber v. Aetna Life Insurance Co., 2013 WL 950704 (2d Cir. Mar. 13, 2013), the Court ruled that participants and beneficiaries are not required to be put on notice that:

  • the plan fiduciary has reserved discretion to interpret the plan terms, and 
  • judicial review of these decisions will be based on an arbitrary and capricious standard of review. 

Separately, the Court ruled that Aetna’s counterclaim seeking reimbursement of benefit overpayments was “appropriate equitable relief” within the meaning of ERISA Section 502(a)(3).  In so ruling, the Court positioned itself with the First and Third Circuits.  The Ninth Circuit continues to stand alone on this issue in concluding that these types of claims do not seek “appropriate equitable relief.”  Interestingly, the Court closed its opinion by stating: “We note in closing that the distinction between claims based in law and those sounding in equity is often fine. In close cases, our inclination is to favor judicial efficiency by allowing ERISA insurers to bring responsive claims in ongoing federal actions, rather than forcing the parties to litigate two actions, one in federal court and one in state court, unnecessarily.” 

It remains to be seen whether the Court’s “inclination” is an indication that it in fact will begin to take a more expansive reading of “appropriate equitable relief.”

Posted in Remedies
Tags: Equitable Relief, Standard of Review
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Photo of Russell Hirschhorn Russell Hirschhorn

Russell L. Hirschhorn, co-head of the ERISA Litigation Group, represents plan fiduciaries, trustees, sponsors and service providers on the full range of ERISA and state law benefit and fiduciary issues. From single plaintiff litigation and arbitration to complex class action litigation, he provides…

Russell L. Hirschhorn, co-head of the ERISA Litigation Group, represents plan fiduciaries, trustees, sponsors and service providers on the full range of ERISA and state law benefit and fiduciary issues. From single plaintiff litigation and arbitration to complex class action litigation, he provides practical guidance, develops unique litigation defense strategies and, when appropriate, mediates successful resolutions.

Russell represents clients across a wide array of publicly-held, multi-national companies and privately owned companies across a multitude of industries including, banking, finance and investments, pharmaceuticals, retail products and construction, to name just a few. In addition, he also counsels benefit plan clients on a host of compliance and federal and state government agency enforcement matters, including complex and lengthy investigations and audits by the U.S. Departments of Justice and Labor.

Russell is management co-chair of the American Bar Association Employee Benefits Committee as well as management co-chair of the Trial Institutes Committee of the American Bar Association’s Labor and Employment Law. He also writes on cutting-edge ERISA litigation issues, serving as a contributing author and a past chapter editor to Employee Benefits Law (BNA Third Edition).

Deeply dedicated to pro bono work, Russell was a principal drafter of several amicus briefs for the Innocence Project, a legal non-profit committed to exonerating wrongly convicted people. Russell has been recognized on several occasions for his commitment to pro bono work including by President George W. Bush in receiving the U.S. President’s Volunteer Service Award.

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