604 F. App'x 494
6th Cir.2015Background
- Michael Stiso, an employee and beneficiary of International Steel Group’s (ArcelorMittal) ERISA-governed long-term disability (LTD) plan, became disabled and has received LTD benefits since March 2006.
- The employer distributed a Summary Plan Description (SPD) stating predisability earnings used to calculate LTD benefits are “indexed” and increased 7% after 12 months and annually thereafter.
- The formal plan document (drafted by MetLife) included a differently phrased definition of “indexed predisability earnings” and did not result in MetLife paying the 7% annual increases plaintiff sought.
- Stiso requested the 7% increases in 2009; MetLife denied the claim and the district court granted summary judgment to defendants.
- On appeal the Sixth Circuit held International Steel (as SPD drafter/distributor) and MetLife (as claims administrator) are ERISA fiduciaries and reversed, finding the SPD misleading and the fiduciaries breached their duties.
- The court remanded for equitable relief under 29 U.S.C. § 1132(a)(3), including calculation of make-whole damages and class issues.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether SPD language promising 7% annual "indexed" increases created enforceable entitlement or a basis for equitable relief | Stiso: SPD led him reasonably to expect 7% annual increases to his monthly benefits | Intl. Steel/MetLife: Plan terms control; SPD cannot override plan; no entitlement to increases | Court: SPD is a fiduciary communication; even if SPD cannot alter plan terms under §1132(a)(1)(B), a misleading SPD can give rise to equitable relief under §1132(a)(3) |
| Whether International Steel breached ERISA fiduciary duties by issuing a misleading SPD | Stiso: Employer miscommunicated benefits, creating reasonable expectation of 7% increases | Intl. Steel: SPD language is subordinate to plan; no breach | Court: Intl. Steel breached its fiduciary duty by distributing an SPD that did not accurately reflect plan terms and misled participants |
| Whether MetLife breached fiduciary duties in denying the 7% increases | Stiso: MetLife interpreted SPD/plan self-servingly to deny benefits | MetLife: Relied on plan document; proper claims administration | Court: MetLife, as claims administrator with discretionary authority, was a fiduciary and breached duties by a self‑serving interpretation that denied promised benefits |
Key Cases Cited
- Varity Corp. v. Howe, 516 U.S. 489 (1996) (recognizes fiduciary duties and equitable relief for misleading communications under ERISA)
- Cigna Corp. v. Amara, 131 S. Ct. 1866 (2011) (SPDs cannot themselves rewrite plan terms under §1132(a)(1)(B), but misleading SPDs can support equitable relief under §1132(a)(3))
- Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101 (1989) (standard for fiduciary status and review principles under ERISA)
- James v. Pirelli Armstrong Tire Corp., 305 F.3d 439 (6th Cir. 2002) (describes ERISA fiduciary duties and equitable remedies)
- Moore v. Lafayette Life Ins. Co., 458 F.3d 416 (6th Cir. 2006) (recognizes equitable breach-of-fiduciary-duty claims under §1132(a)(3))