Ninth Circuit Reverses Course In ERISA Case

In a previous ASAP article, we discussed the Ninth Circuit's June 6, 2014 decision in Gabriel v. Alaska Elec. Pension Fund, 755 F.3d 647 (9th Cir. 2014). In the initial opinion issued by the court, the panel split 2-1 in affirming a district court's ruling that the appellant was not entitled to ongoing retirement benefits, even though the relevant pension fund had provided those benefits for three years prior to the parties becoming involved in litigation. The court initially held that the remedy sought by the appellant—called equitable surcharge—was unavailable to him under ERISA. See 11 U.S.C. § 1132(a)(3); ERISA § 502(a)(3). Pursuing that relief, the initial opinion stated, was contrary to the limited equitable relief regime set forth in the remedial provisions in the statute. In a strenuous partial dissent, Judge Marsha Berzon wrote that the panel had misconstrued the Supreme Court's decision in CIGNA Corp. v. Amara, 131 S. Ct. 1866 (2011), misread the Ninth Circuit's earlier cases, and in fact had triggered a circuit split on the issue of equitable surcharge.

On July 21, 2014, the appellant filed with the court a request for a rehearing or a rehearing en banc. A joint amicus brief—submitted on behalf of the National Employment Lawyers Association and the AARP—was filed on the same day, supporting the appellant. In response, Appellee Alaska Electrical Pension Fund filed its brief in opposition to rehearing or rehearing en banc on August 20, 2014. Much of the briefing discussed the equitable surcharge issue.

On December 16, 2014, without granting or denying the motion for rehearing (and before any action was taken by the full court to rehear the case en banc), the panel that issued the initial decision withdrew its earlier opinion, and a new opinion was issued, also written by Judge Sandra Ikuta. See Gabriel v. Alaska Elec. Pension Fund, 2014 WL 7139686 (9th Cir., Dec. 16, 2014). The new opinion echoed the earlier one with respect to appellant's claims for reformation and equitable estoppel, but it declined to reach the merits of his equitable surcharge theory. Instead, it simply remanded the issue to the district court. Judge Kozinski, who had joined Judge Ikuta in the initial opinion, now concurred in the judgment that allowed the appellant to pursue his claim in the district court, but expressed skepticism that the appellant would be able to ultimately obtain any relief under the theory.

In her majority opinion, Judge Ikuta wrote...