CIGNA Corp. v. Amara
131 S. Ct. 1866
| SCOTUS | 2011Background
- CIGNA shifted its pension plan in 1998 from a defined-benefit annuity to a cash-balance account with annual contributions and interest.
- Pre-1998 benefits already earned by employees were converted into an opening account balance under the new plan.
- Employees challenged CIGNA for insufficient notices about changes, claiming the new plan reduced benefits in some respects.
- District Court found notice violations under ERISA and reformed the plan and benefits, invoking 502(a)(1)(B).
- Court also considered, and found potentially, an equitable remedy under 502(a)(3); the court reformed guarantees and ordered related relief.
- This Court was asked whether a showing of ‘likely harm’ suffices for benefits recovery under the 502(a)(1)(B) theory and what role §502(a)(3) should play.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether 502(a)(1)(B) authorizes reform of plan terms | CIGNA contends 502(a)(1)(B) cannot authorize reform. | Respondents rely on 502(a)(1)(B) to justify relief based on plan terms. | 502(a)(1)(B) does not authorize reform of plan terms. |
| Whether §502(a)(3) can provide the relief the district court ordered | Remedies should be under 502(a)(1)(B). | Equitable relief under 502(a)(3) may cover reform-like remedies. | Remand to determine appropriate equitable relief under §502(a)(3). |
| Whether ERISA summaries (SPDs) are themselves plan terms for 502(a)(1)(B) | Disclosures could be treated as plan terms enabling relief under 502(a)(1)(B). | SPDs are communications, not terms of the plan; not enforceable as plan terms. | SPDs are not terms of the plan for purposes of §502(a)(1)(B). |
| What standard of injury (harm) applies to equitable relief under ERISA | Harm or reliance should be inferred or presumed from disclosure violations. | Standard may require some form of reliance or harm depending on the remedy. | Harm and causation are required; detrimental reliance not always necessary; equitable principles govern. |
| Whether the district court’s relief can be characterized as equitable surcharge/reformation | Relief fits traditional equitable remedies for misrepresentation and breach of trust. | Remedial structure is unsettled and depends on remand under §502(a)(3). | Remand appropriate; Court discusses potential equitable theories but does not resolve on the merits. |
Key Cases Cited
- Mertens v. Hewitt Associates, 508 U.S. 248 (1993) (defines 'appropriate equitable relief' based on traditional equity)
- Great-West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204 (2002) (limits monetary relief under § 502(a)(3) to equitable principles)
- Sereboff v. Mid Atlantic Medical Services, Inc., 547 U.S. 356 (2006) (affirms equitable nature of certain remedies under § 502(a)(3))
- LaRue v. DeWolff, Boberg & Associates, Inc., 552 U.S. 248 (2008) (distinguishes plan terms from participant's personal rights under ERISA)
- Curtiss-Wright Corp. v. Schoonejongen, 514 U.S. 73 (1995) (distinguishes roles of sponsor and administrator in ERISA context)
- Varity Corp. v. Howe, 516 U.S. 489 (1996) (discusses enforcement scheme and remedies under ERISA)
- UNUM Life Ins. Co. of America v. Ward, 526 U.S. 358 (1999) (interprets plan terms and external rules in ERISA enforcement)