555 F. App'x 77
2d Cir.2014Background
- Plaintiff Geoffrey Osberg sued Foot Locker and the Foot Locker Retirement Plan under ERISA after the company converted its defined benefit pension into a cash-balance plan.
- Osberg alleged (1) defective disclosure: summary plan descriptions (SPD) and other communications were false or misleading in violation of ERISA § 102(a); and (2) fiduciary breach under ERISA § 404(a) for making misleading statements/omissions. He also alleged failure to provide § 204(h) notice of reduced future accruals.
- The district court granted summary judgment to defendants and dismissed Osberg’s claims; Osberg appealed.
- On appeal the Second Circuit reviewed de novo and addressed whether (a) § 204(h) notice violations could provide the relief Osberg sought, and (b) whether equitable remedies (reformation or surcharge) were available for disclosure and fiduciary claims.
- The court affirmed dismissal of the § 204(h) claim but vacated and remanded the disclosure/fiduciary equitable-remedy issues for further proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| § 204(h) notice adequacy | Notice omitted part of new formula and failed to disclose reduced future accruals | ERISA at the time didn’t require that disclosure; any defect cured by later SPDs; claim time‑barred | Affirmed dismissal: § 204(h) deficiency cannot yield the limited remedy Osberg seeks (an opening balance); invalid notice would void the entire amendment, not just part Osberg asks to sever |
| Timeliness of § 102(a) disclosure claim | Argued not time‑barred (disagrees with district court) | District court held § 102(a) claim time‑barred (3- or 6-year issue) | Court avoided deciding statute-of-limitations for § 102(a) because § 404(a) timeliness undisputed; remanded further equitable issues |
| Availability of reformation as equitable relief | Requests plan reformation (to restore benefits) — no requirement to show actual harm for reformation | Foot Locker: former employees can’t seek reformation; reformation requires fraud or mutual mistake; Amara limits monetary relief to surcharge | Vacated summary judgment on reformation: district court erred requiring "actual harm." Former employees may pursue reformation; factual predicates (fraud/mistake) left to district court to decide on remand |
| Availability of surcharge / monetary relief | Surcharge alternative to reformation for misleading disclosures | Foot Locker argued monetary relief limited or claim moot if reformation unavailable | Court held reformation could provide full relief and rendered surcharge dismissal moot; preserved plaintiff’s ability to pursue surcharge later if reformation denied |
Key Cases Cited
- Frommert v. Conkright, 433 F.3d 254 (2d Cir.) (ERISA amendment notice invalidates amendment as to participants without proper § 204(h) notice)
- Frommert v. Conkright, 738 F.3d 522 (2d Cir. 2013) (standard for equitable relief and ‘‘likely prejudice’’; interplay of remedies after Amara)
- CIGNA Corp. v. Amara, 131 S. Ct. 1866 (2011) (Supreme Court on ERISA equitable remedies: reformation and surcharge explained; role of equitable harm)
- Ellicott Square Court Corp. v. Mountain Valley Indem. Co., 634 F.3d 112 (2d Cir.) (affirming ability to affirm on any correct ground supported by record)
- Burke v. Kodak Ret. Income Plan, 336 F.3d 103 (2d Cir. 2003) (discussing likely prejudice standard for ERISA notice violations)