The Third Circuit held that a plan administrator’s plan interpretation requiring an actuarial reduction of certain employees’ pension benefits conflicted with the plan’s terms. As such, its decision to reduce participants’ benefits violated ERISA section 502(a)(1)(B), and also violated ERISA’s prohibition against cutbacks of accrued benefits.
Breaching Fiduciary Cannot Seek Equitable Indemnity from Another Fiduciary
A California federal district court dismissed a plan fiduciary’s equitable indemnity claim because such claims are not available to a breaching fiduciary under ERISA. Plaintiff William Brown commenced a putative class action for long-term disability benefits.
District Court Defines Surcharge Broadly
A New York district court held that surcharge could include not only make-whole relief, but also consequential, exemplary, or punitive damages in limited circumstances where malice or fraud is involved. Plaintiff Janet D’Iorio alleged that Winebow breached its fiduciary duty by failing to provide an SPD and by making material misrepresentations about whether her commissions were included as income in determining LTD benefits.
Second Circuit: Class-Wide Reformation Is Appropriate Equitable Relief
In the latest chapter of the Amara saga, the Second Circuit recently affirmed the district court’s class-wide order to reform CIGNA’s cash balance plan, as a means to remedy what the district court previously found to be CIGNA’s breach of its statutory notice obligations.
Ninth Circuit Breathes Life Into Participant’s Claim for Surcharge
A panel of the Ninth Circuit withdrew its earlier opinion and has now joined other circuits in finding that the equitable remedy of surcharge is available for participants seeking recovery of personal losses as opposed to losses suffered by the plan. Gabriel v. Alaska Elec. Pension Fund, 2014 WL 7139686 (9th Cir. Dec. 16,
Second Circuit Holds ERISA Disclosure Claims Are Time-Barred
The Second Circuit recently held (in a summary order) that plan participants’ claims alleging violations of ERISA’s disclosure rules in connection with a cash balance conversion were barred by the statute of limitations. In so ruling, the Court explained that because the participants’ claims that defendants breached their fiduciary duties by mischaracterizing the new plan’s
Second Circuit Rejects Plan’s Claim For Reimbursement From Another Plan
Where an ERISA plan specifically sets forth in the plan document its rights to reimbursement/subrogation vis-à-vis a plan participant then there is no requirement that recovery be conditioned on the plan being able to trace the recovered monies to the original benefit payment. Under such circumstances, the plan is considered to have an equitable lien
District Courts Continue to Reject the Ninth Circuit’s Limitation on Surcharge
We previously reported (here) that the Ninth Circuit stands alone in expressly limiting the availability of surcharge to cases involving loss to, or unjust enrichment at the expense of, the plan (as opposed to being available to a participant claiming personal loss flowing from a fiduciary breach). See Gabriel v. Alaska Electrical Pension
View From Proskauer: The Availability of Surcharge as Relief for Individual ERISA Fiduciary Breach Claims
Three years ago, the U.S. Supreme Court identified three forms of appropriate equitable relief — reformation, equitable estoppel and surcharge — that are available under Section 502(a)(3) of the Employee Retirement Income Security Act (‘‘ERISA’’). See Cigna Corp. v. Amara, 131 S. Ct. 1866, 50 EBC 2569, 2011 BL 128629 (2011). This article focuses on the availability of surcharge and, in particular, a division among the lower courts on whether surcharge is available to plaintiffs seeking monetary recovery for personal loss as opposed to a loss to the plan.
Sixth Circuit says ERISA does not preempt state law claim for fraudulent inducement.
The Sixth Circuit recently held that ERISA did not preempt a plan participant’s claim for state law fraudulent inducement. McCarthy v. Ameritech Pub., Inc., No. 12-4510, 2014 WL 3930572 (6th Cir. 2014). Defendant-API’s decided to terminate Plaintiff’s employment and gave her two options: (1) she could leave and receive a lump-sum “termination payment”; or