Fourth Circuit Establishes New Standards For Plaintiffs Seeking Unjust Enrichment As An Equitable Remedy Under ERISA
Jurisdiction | United States,Federal |
Law Firm | Littler Mendelson |
Subject Matter | Employment and HR, Retirement, Superannuation & Pensions |
Author | Mr Darren Nadel and Billie Jo M. Risheim |
Published date | 09 October 2023 |
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The United States Court of Appeals recently shed light on when'and under what conditions'a plaintiff may seek a monetary recovery under ' 502(a)(3) of the Employee Retirement Income Security Act (ERISA).1 Section 502(a)(3) authorizes courts to award only "equitable relief."2 Over the years, federal courts, including the United States Supreme Court, have been concerned with delineating exactly what relief is "equitable" under ' 502(a)(3)'s terms. In previous articles, we discussed the Ninth Circuit's initial 2014 decision that equitable surcharge, a form of equitable relief, was unavailable to a plaintiff as a ' 502(3)(a) remedy, and the Ninth Circuit's subsequent withdrawal of that decision, reversing course and declining to reach the merits of plaintiff's equitable surcharge theory.3 In Rose v. PSA Airlines Inc., the Fourth Circuit examined equitable relief in the form of unjust enrichment. Employers should take note of the decision because although the Fourth Circuit departed from Supreme Court precedent, making it more difficult for plaintiffs seeking monetary relief under ' 502(a)(3) to recover, it also created the possibility for those same plaintiffs to recover money damages under an unjust enrichment theory. Essentially, the Fourth Circuit closed one door and opened another, in the context of equitable relief under ' 502 (a)(3).
Background
Plaintiff, as administrator of her deceased son's estate, sued the administrators of her son's health plan (the Plan), asserting that Defendants wrongfully denied her benefits under ERISA ' 502(a)(1)(B) or, alternatively, for breach of fiduciary duty under ' 502(a)(3). Plaintiff claimed that her son was wrongfully denied surgery prior to his death and sought, among other relief, the monetary cost of the surgery. Defendants moved to dismiss both claims under Rule 12(b)(6), and the district court granted the motion. Plaintiff appealed.
On appeal, the Fourth Circuit affirmed dismissal of the ' 502(a)(1)(B) claim. However, the court vacated the dismissal of the ' 502(a)(3) claim, explaining that the district court failed to consider whether Plaintiff "plausibly alleged facts that would support relief 'typically...
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