General Publications July 8, 2013

“Cigna v. Amara's Influence So Far,” Law360, July 8, 2013.

Extracted from Law360

It has been over two years since the U.S. Supreme Court’s landmark Employee Retirement Income Security Act decision in Cigna Corp. v. Amara, yet courts are only beginning to confront its possible expansion of available equitable remedies. This article will survey Amara’s influence on § 502(a)(3) claims brought by individual claimants.


ERISA’s civil enforcement provision authorizes three fundamental types of claims by private litigants: a claim for benefits (or clarification of rights) under the plan; a claim for breach of fiduciary duty; and a claim for “other appropriate equitable relief” to enforce the terms of the plan or Title I of ERISA. ERISA § 502(a), 29 U.S.C. § 1132(a). The Supreme Court has long held that claims for fiduciary breach under § 502(a)(2) must be brought on behalf of the plan, not on behalf of individual claimants. Mass. Mut. Life Ins. Co. v. Russell, 473 U.S. 134 (1985).[1]

Therefore, individual claimants who cannot bring a claim on behalf of the plan, are often required to proceed under § 502(a)(3). In Varity Corp. v. Howe, the Supreme Court cautioned that while § 502(a)(3) authorizes claims for individual relief, it is a “catchall” that acts as “a safety net, offering appropriate equitable relief for injuries caused by violations that § 502 does not elsewhere adequately remedy.” 516 U.S. 489, 512 (1996).

Thus, a claimant with an available remedy under the other subsections of § 502(a), such as a claim for benefits under § 502(a)(1)(B), must pursue that specific remedy and cannot make a claim under § 502(a)(3). E.g., Katz v. Comprehensive Plan of Grp. Ins., 197 F.3d 1084 (11th Cir. 2000). Regarding the scope of relief under § 502(a)(3), the Supreme Court has long held that it only authorizes relief typically available in courts of equity. Mertens v. Hewitt Assocs., 508 U.S. 248 (1993).

The Supreme Court's Amara Opinion

After concluding that relief was not available under § 502(a)(1)(B), the court considered whether relief was possible under § 502(a)(3). It concluded there were three types of equitable relief potentially available. Id. at 1879-80.

First, the court recognized the possibility of reformation of the plan document. Second, the court identified estoppel as a traditionally available equitable remedy. Finally, the court stated that “surcharge” was a potentially available remedy to a fiduciary breach.

While money damages are unavailable under § 502(a)(3), Mertens, 508 U.S. 248, and the surcharge remedy takes the form of a money payment, it is exclusively equitable in the context of a claim against a fiduciary. As the court noted, Mertens did not involve claims against fiduciaries. Amara, 131 S. Ct. at 1980.

Next, the court turned to the appropriate legal standard for determining whether the plaintiffs had been sufficiently injured. It found no general equitable requirement that a plaintiff show detrimental reliance, although such a showing may be required for particular equitable remedies (e.g., estoppel). Id. at 1881. Most significantly, the majority found that the expansive remedy of surcharge requires a showing of “actual harm,” but that such actual harm may “come from a loss of [a] right protected by ERISA.” Id.

In a concurring opinion, Justices Scalia and Thomas found the discussion of potential equitable remedies unnecessary and “purely dicta.” Id. at 1884. The concurring opinion suggests that ERISA § 204(h) (which requires proper notice as a condition precedent to a prospective reduction in benefits) provided an adequate remedy.

Subsequent Opinions

Although several courts have recognized that Amara’s discussion of equitable remedies is likely dicta, they have also assumed that estoppel, reformation and surcharge are available in appropriate circumstances. A key issue in these cases has been the required standard for proving harm.


In Skinner v. Northrop Grumman Retirement Plan B, the Ninth Circuit became the first federal appellate court to analyze Amara’s impact on the availability of equitable remedies under § 502(a)(3). 673 F.3d 1162 (9th Cir. 2012). A three-judge panel rejected the plaintiffs’ bid to recover for alleged inaccuracies in a SPD.

Unlike in Amara, there was no evidence of reliance and thus no claim for estoppel. The reformation claim failed because there was no evidence of a mistake in drafting the document or of any wrongful conduct. The court distinguished Amara on this point because the district court there had found evidence the defendant intentionally misled its employees, but there was no such evidence in Skinner.

Finally, the surcharge claim failed because there was no unjust enrichment or actual harm to plaintiffs. Plaintiffs argued that they were harmed in the sense that they were deprived of their statutory right to an accurate SPD. However, the court rejected this argument, finding that it would render fiduciaries strictly liable for every mistake in an SPD. Id. at 1167.

Thus, the Ninth Circuit more closely aligned itself with Justice Scalia’s concurring opinion that the “actual harm” required for a surcharge remedy is “harm stemming from reliance on the SPD or the lost opportunity to contest or react to the switch.” Amara, 131 S. Ct. at 1885 (Scalia, J., concurring).


The Fourth Circuit reached a different result in a case where the plaintiff claimed a monetary loss and not just the technical failure to receive a required communication. McCravy v. Metro. Life Ins. Co., 690 F.3d 176 (4th Cir. 2012).

In McCravy, plaintiff had continued to pay premiums, which the defendant had allegedly accepted, for life insurance on her daughter, who died at the age of 25. However, the plan provided coverage for children only up to age 24. Plaintiff contended that she was not aware of the limit and believed, because premiums were being accepted, that her daughter was covered and thus did not purchase other coverage.

The district court held that plaintiff’s remedy was limited to a return of premiums; however, after Amara, the Fourth Circuit held that plaintiff’s claims for the death benefit under theories of estoppel and surcharge were viable. It remanded for consideration of these claims in light of Amara.

Ultimately, the Fourth Circuit’s opinion offers little guidance on the level of harm required for surcharge or estoppel. Nonetheless, the Fourth Circuit found that the availability of equitable relief under § 502(a)(3) was broader after Amara than the district court assumed, noting, "With Amara, the Supreme Court has put these perverse incentives [to wrongfully accept premiums] to rest and paved the way for McCravy to seek a remedy beyond a mere premium refund." Id. at 183.

Amara Post-Remand

The district court on remand in Amara also struggled with these same issues regarding the availability of equitable remedies. Amara v. Cigna Corp., No. 3:01cv2361(JBA) (D. Conn. Dec. 20, 2012). Addressing reformation, the court found that equity courts traditionally had the power to reform contracts that failed to express the agreement of the parties, either as a result of mutual mistake or the fraud of one party and the mistake of the other. Id. at *6.

Given the prior findings that Cigna had affirmatively misled its employees, the court concluded that the fraud requirement was satisfied. It also found that, in the ERISA context, a mistake was measured by comparing the terms of the plan to the beneficiaries’ objectively reasonable expectations. Id. Thus, the court reformed the plan to accord with the parties’ intent as reflected in several communications that suggested participants would continue to receive the full value of their prior benefits. Id. at *8.

Addressing the possibility of a surcharge remedy, the district court found this remedy potentially applicable to prevent unjust enrichment or compensate for damages caused by a fiduciary breach. Id. The court referred to the compensatory component as “make-whole surcharge” and rejected Cigna’s argument that this type of relief required a showing of loss to the plan as a whole. It also found that although some harm is required, the requisite harm need not be detrimental reliance.

The district court ultimately resolved the causation problem by adopting a burden-shifting approach under which the plaintiff need only show a fiduciary breach and a “related loss” at which point the burden shifts to the defendant to prove that the loss would have occurred even in the absence of a fiduciary breach. Id. at *11.

Plaintiffs had shown a “related loss” because their retirement benefits were diminished by the amendment. (The court did not explain how this loss is related to the inaccurate descriptions of the amendment as opposed to the amendment itself.) Cigna, according to the court, was unable to carry its burden of showing that this loss would have occurred even absent the inaccurate communications.

The court found that surcharge based on unjust enrichment may also be appropriate given its finding that Cigna could not have obtained the cost savings it did, absent the misleading communications.

The court’s theory was that Cigna employees would likely have demanded wage or other benefit concessions had they known that their retirement benefits were being reduced. However, the court did not make specific factual findings on this point, instead opting to hold a hearing, should its other remedial orders be reversed on appeal. Id. at *14.

When Are Equitable Defenses Appropriate?

In addition to the expansion of equitable remedies under § 502(a)(3), Amara has also allowed courts to expand the availability of equitable defenses. Thus, Amara has become a double-edged sword for plan sponsors and administrators; not only has it expanded remedies beyond the terms of the plan, but it has also expanded the available defenses for claimants in reimbursement and subrogation actions.

In McCutchen, the plaintiff sued under § 502(a)(3) for reimbursement of medical expenses paid by the plan after a participant recovered damages for injuries sustained in an automobile accident. The Supreme Court issued a two-part opinion holding: Equitable principles cannot override clear plan terms, but equitable principles can be used to construe ambiguous or missing plan terms. US Airways Inc. v. McCutchen, 133 S. Ct. 1537 (2013).

Applying these holdings to the facts of the case, the Supreme Court rejected McCutchen’s attempt to use theories of unjust enrichment to prevent US Airways from seeking reimbursement owed under the plan terms. The Supreme Court noted that § 502(a)(3) “does not, after all, authorize ‘appropriate equitable relief’ at large ... rather, it countenances only such relief as will enforce ‘the terms of the plan’ or the statute, §1132(a)(3).” Id. at 1548 (internal citations omitted). Thus, equitable defenses may not override unambiguous contractual terms.

The Supreme Court next considered the problem of how to allocate attorneys' fees since the plan in McCutchen was silent on that issue. The Supreme Court held that where the plan is silent on the issue of how to apportion costs incurred (i.e., attorneys’ fees) in the recovery, “the common-fund doctrine provides the best indication of the parties’ intent.” Id. at 1550.

The Supreme Court remanded for the district court to consider what portion of US Airways’ recovery should be reduced to cover attorneys' fees. Thus, while the Supreme Court held that equitable defenses cannot override unambiguous plan terms, it also held that equitable defenses may be considered to fill in any gaps.

Shortly after its issuance of the McCutchen opinion, the Supreme Court granted certiorari in CGI Technologies & Solutions v. Rose, et al., and then immediately vacated and remanded in light of McCutchen. 133 S. Ct. 1995 (2013). Back in June 2012, the Ninth Circuit in this case had joined the Third Circuit’s opinion in McCutchen, thereby concluding that equitable defenses (such as the common-fund rule) could trump express contractual language in lawsuits seeking “appropriate equitable relief” under § 502(a)(3). 683 F.3d 1113 (9th Cir. 2012).

Given the similarity of facts in Rose and McCutchen, it is not surprising that the Supreme Court simply vacated and remanded Rose with a reference to McCutchen. However, unlike in McCutchen, the plan in Rose expressly disclaims the common-fund doctrine and requires full reimbursement to the plan regardless of whether the beneficiary is made whole by their recovery. Thus, McCutchen may require a different result in Rose.

Is Equitable Relief Appropriate in Routine Benefits Disputes?

So far, our discussion of the scope of equitable relief under § 502(a)(3) deals with cases outside of the typical claim for benefits under § 502(a)(1)(B). However, some plaintiffs seek to expand the impact of Amara to routine benefits disputes.

Such plaintiffs have argued that if a claim's fiduciary violates the plan terms by failing to pay a meritorious claim, it has breached its fiduciary duty to follow the plan terms, and Amara authorizes a claim for equitable surcharge. In response to the argument that Varity only permits a claim under § 502(a)(3) if adequate relief is unavailable under § 502(a)(1)(B), these plaintiffs argue that the relief available under § 502(a)(1)(B) is never adequate because it does not include compensatory and punitive damages.

This argument is contrary to the Supreme Court cases holding that consequential damages are not available under any provision of ERISA and so far has not been accepted by the lower courts. See Biglands v. Raytheon Emp. Savings & Inv. Plan, 801 F. Supp. 2d 781 (N.D. Ind. 2011).


Amara severely limits prior authority that precluded monetary relief in the context of individual claims. Now, if a plaintiff can show actual damages, the surcharge remedy is going to be the functional equivalent of a money judgment. Courts have struggled with the type of harm that will suffice for equitable relief, but it seems likely that courts will continue to reject claims where the only harm that can be identified is the technical failure to provide fully compliant communications. 

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