Aaron Gearlds, Jr. v. Entergy Services, Incorporat
709 F.3d 448
| 5th Cir. | 2013Background
- Gearlds worked for Entergy Mississippi (1976–1994) and was a beneficiary of Entergy Services, Inc.-administered ERISA plan.
- He began long-term disability in 1994; benefits ended in 2002 but employment continued; Entergy Mississippi did not pay thereafter.
- In 2005 Gearlds retired early at 55 with reduced pension and medical benefits, allegedly based on assurances of life-long medical coverage.
- He later waived his wife’s plan medical benefits, believing he retained Entergy benefits due to the assurances.
- In 2010 Entergy notified Gearlds it would discontinue medical benefits, miscalculating service time by including years with presumed disability.
- Gearlds sued for breach of fiduciary duty under ERISA § 502(a)(3) and equitable estoppel; district court dismissed under Rule 12(b)(6).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether surcharge relief is available under ERISA § 502(a)(3). | Gearlds seeks make-whole damages for fiduciary breach. | Amara discussion is dictum and traditional harm-only remedies apply. | Amara permits surcharge; funds may be recovered as equitable relief. |
| Whether Gearlds pleads a plausible breach of fiduciary duty claim. | Misrepresentations induced early retirement and continued premiums. | Allegations insufficient to show discretionary fiduciary action. | Plausible breach alleged; merits development on remand. |
| Whether equitable estoppel claim survives. | Equitable estoppel due to reliance on assurances of benefits. | No extraordinary circumstances shown. | Remand allowed to address surcharge; estoppel may be considered later. |
| Whether Entergy Mississippi was a proper defendant. | Mississippi entity sponsored/administered plan and denied benefits. | Mississippi not shown to sponsor/administer or decide benefits. | Entergy Mississippi proper defendant; district court affirmed on that point; remand as to Entergy Services. |
Key Cases Cited
- CIGNA Corp. v. Amara, 131 S. Ct. 1866 (2011) (expands § 502(a)(3) make-whole relief for fiduciary breaches)
- Amara, 131 S. Ct. 1866 (2011) (recognizes surcharge as equitable relief for fiduciary breach)
- McCravy v. Metro. Life Ins. Co., 690 F.3d 176 (4th Cir. 2012) (remand to determine merits and surcharge applicability)
- Amschwand v. Spherion Corp., 505 F.3d 342 (5th Cir. 2007) (monetary make-whole damages not ordinarily available pre-Amara)
- In re Unisys Corp. Retiree Med. Benefit ERISA Litig., 57 F.3d 1255 (3d Cir. 1995) (breach of fiduciary duty may involve misrepresentation by plan administrator)