Connie Edmonson v. Lincoln National Life Insuranc

thus failed to take into consideration V have traditional, generational, and historical Conclusion principles precedents and of concurrent part company compelled I to with am jurisdiction. majority they my in the colleagues It is for that reason that I must dissent. Supreme Court have failed adhere join I majority opinion, cannot which Congress’ legisla- precedent interpreting this has remanded case the District out, I have since at least pointed tion. As originated in again—a case Court which required Supreme has fed- 1867 the Court Respectfully, taken in the actions 1940s. jurisdiction in recognize dual eral courts therefore, Supreme I would adhere majority The here matters such RCRA. precedent teaching Court and hold has not. in this Jer- the first time Court New “system of our respecting Instead jurisdiction sey has in RCRA concurrent requires sovereignty,” dual which cases with the federal courts. authority inherent state courts have competent adju- presumptively are thus I doing, In so would affirm all of claims under the laws of United dicate all present judgment District Court’s States, majority ignored prin- has this particulars, exception CERC- Supreme Court ciple prec- and thus defied LA su- prejudgment interest. See note Tafflin, edent. 493 U.S. See pra. (“Under system this of dual sov- S.Ct. 792 consistently ereignty, we have held authority, and

state courts have inherent competent, adju- presumptively

are thus arising under the laws of the

dicate claims States.”). Instead, the majority

United out, I has

opinion, pointed as have followed solitary unanalytic path Court of EDMONSON, individually Appeals held that federal courts Connie J. which has jurisdiction. Only have and on of all others exclusive RCRA behalf similarly adopted posi- District Courts have situated tion, following Eighth opinion Circuit any Legs per- Blue without additional LIFE LINCOLN NATIONAL analysis.

suasive INSURANCE COMPANY. opinions the District Courts do The Supreme precedent Court follow No. 12-1581. logic denying state court employ RCRA Appeals, United States Court of Rather, jurisdiction. have they cited Third Circuit. Legs position to one another Blue respective in superficial treatment of their 13, 2012. Argued Nov. jurisdictional Sadly and un- conclusions. Aug. Filed: fortunately, majority fol- opinion Accordingly, just lowed suit. as with the cited, majority

opinions opinion it has

lacks precedential analysis authoritative statutory majori- interpretation. to,

ty opinion, and the courts it has looked Barrett, Esq., & M. Barrett Asso- issued Lincoln. The policy Scott was estab- Jr., ciates, IN, Bell, Bloomington, John C. lished under an employee benefit Bell Esq. Brigham, Esq., Lee W. (argued), plan sponsored by Edmonson’s employer, GA, Jeffrey Brigham, Augusta, & G. Casu- Schurz Communications. When her hus- Atlanta, Flitter, rella, GA, Cary L. Esq., died, band Edmonson was entitled to Lorenz, Narberth, PA, Esq., Flitter for $10,000 states, policy benefits. The Appellant Connie J. Edmonson. “[u]pon receipt satisfactory proof of a Dependent’s death while Pittinsky, Esq. (argued), H. insured

David Joel Tasca, Uselton, Esq., Policy, E. Ruth Esq., Company S. will pay the PA, Spahr, Ap- Philadelphia, Ballard Dependents amount of the [sic] Life Insur- pellee Lincoln National Life Insurance death,” ance effect on the date such Company. and that “[a]ny payable benefits under this Policy will paid immediately be after the Pflepsen, Esq.,

Waldemar J. Jr. Jorden Company complete proof receives Burt, DC, Washington, for Amicus Curiae claim.” The policy does state that Council Life American Insurers. Lincoln will using benefits re- SCIRICA, FISHER, Before: tained asset account and does not other- JORDAN, Judges. Circuit specify wise how Lincoln was to pay Ed- monson benefits. THE OPINION OF COURT Edmonson submitted a claim form to SCIRICA, Judge. Circuit for payment. The form stated Plaintiff Connie Edmonson was a benefi- when greater the benefits are than ciary of a life insurance established $5,000, Lincoln’s usual method of payment governed by employer the Em- open is to a SecureLine Account in the ployee Security Retirement Income Act of beneficiary’s ap- name. After Lincoln (ERISA). Defendant Lincoln Na- proved claim, it aup Edmonson’s set Se- tional Life Insurance Co. chose to her in cureLine Account her name in the account, using a retained benefits asset $10,000, amount and sent her a check- which allowed it to hold onto the benefits book which she draw on could checks profit them invest for its own until explained the account. Lincoln to Edmon- affirmatively Edmonson chose to withdraw son that she would receive interest the them from the account. Bloomberg in amount the account Edmonson claims Lincoln its breached average interest-bearing national rate for fiduciary duty loyalty under ERISA and checking plus 1%. accounts Lincoln also disgorgement of profit seeks Lincoln if explained that Edmonson wanted by investing earned the benefits owed to proceeds immediately, all entire she had to granted summary her. District The Court one do was write check for the entire favor, judgment concluding Lincoln’s balance. acting fiduciary Lincoln in a was ca- subject it pacity when took the actions The SecureLine Account was a retained complaint. affirm. We will distributing asset account. When benefits accounts, an using retained asset insurance Background

I. deposit any does not funds into company Rather, merely it account. credits Connie Edmonson’s husband was in- benefits, group policy sured under a life insurance account with and when a ben- account, own interest or for his own his a check on eficiary writes account.”). disgorge- funds into Edmonson seeks transfers company insurance Lincoln from profits by that ment of the earned cover the check. Until the account to un- time, retains the the investment retained assets company the insurance (the 1132(a)(3), allows beneficiary “re- der U.S.C. which money owed to fiduciary assets”), participant, beneficiary, or to ob- invest the retained tained can equitable tain relief to violations profit. redress own assets ERISA. up Lincoln set Three months after Account, dismiss, Ed- arguing Lincoln moved to Edmonson withdrew

SecureLine lacked both constitutional and proceeds. insurance monson full amount bring claim. It statutory her her check for $52.33 Lincoln wrote argued acting it was not contends also interest. Edmonson investing the when it took the actions profit Lincoln earned from under ERISA and, were, subject to if it it greater complaint was than the even retained assets her, paid any fiduciary duty by and that tak- amount of interest did breach million in these actions. Edmonson v. Lin- approximately Lincoln made See $5 Co., F.Supp.2d Ins. by investing retained coln Natl profit assets Life (E.D.Pa.2011). reject- account and the accounts of 876 The trial court credited her Id. arguments. other ed all of Lincoln’s at 874. beneficiaries. had The court first concluded Edmonson brought an ERISA III standing under Article because she contending Lincoln violated its injury-in-fact suffered on the based by choosing ERISA to pay duties under spread the interest amount between using asset account and retained paid profit to her and the earned for its investing the own retained investing the retained assets. profit. She contends ERISA’s court then concluded Edmonson both acts implicated duties were ERISA, statutory standing re- exercising “discretionary involved authori- jecting argument that Edmonson ty discretionary man- respecting or control “beneficiary” longer was no ERISA agement” of an or “administration” plan once Account the SecureLine exercising “authority Finally, closed. Id. at 883. the court con- disposi- respecting management control sufficiently alleged cluded Edmonson had 29 [plan] tion assets.” U.S.C. fiduciary that Lincoln breached duties 1002(21)(A) § forth the various (setting Id. under ERISA. at 892. trigger fiduciary functions that ERISA duties). argues Following discovery, Lincoln’s acts breach- She Lincoln moved summary these it fiduciary judgment ground ed its ac- on duties fiduciary exclusive not a under tions were not taken for her ben- was ERISA when they self-dealing. efit and because involved took contested actions. 1104(a)(1) (“[A] § fiduciary partial summary judgment See moved for id. shall respect to discharge plan his with the same issue. Edmonson also moved duties certify in the solely participants paid interest of class individuals who were and and Lincoln via a retained beneficiaries ... the exclusive ERISA benefits purpose partic- granted of ... benefits to account. The court Lin- providing asset beneficiaries.”); summary judgment, ipants and their id. coln’s motion for de- 1106(b)(1)(“A § fiduciary respect partial with to a nied Edmonson’s motion for sum- mary ... as moot plan judgment, shall not deal with the assets of dismissed

413 compensation, Edmonson’s motion for class certification. indirect, direct or with Co., Edmonson v. Lincoln Ins. Nat’l respect any moneys or proper- other Life 310, (E.D.Pa.2012). F.Supp.2d 899 313 ty of such or plan, any authority or The court concluded actions were (iii) so, responsibility to do or he has governed fiduciary by ERISA duties any discretionary or authority discre- because the acts did not the admin- involve tionary responsibility in the administra- management or istration tion of such plan. exercising authority did involve or con- “ 1002(21)(A). § 29 U.S.C. ‘ERISA ... appeals, trol over assets. Edmonson ‘fiduciary1 defines not in terms formal contending respect the court erred with in trusteeship, but terms of con functional

both conclusions.1 ” authority trol and over the plan.’ In re Unisys Corp. Retiree Med. Fiduciary Principles II. ERISA’s Benefits “ (3d 220, ERISA Litig., 579 F.3d 228 Cir. is a comprehensive ‘ERISA stat 2009) (alteration and in emphasis original) designed promote ute the interests of (quoting Assocs., Mertens v. Hewitt 508 employees and their beneficiaries em ” 248, 262, 2063, 113 S.Ct. 124 L.Ed.2d ployee plans.’ Ingersoll-Rand benefit Co. (1993)). 161 “Accordingly, ‘[fiduciary McClendon, 137, 133, v. 498 U.S. 111 S.Ct. duties just under ERISA attach not (1990) 474 (quoting L.Ed.2d Shaw particular persons, but particular per Lines, Inc., 85, 90, v. Delta Air 463 U.S. ” particular performing sons functions.’ (1983)). 103 S.Ct. 77 L.Ed.2d 490 To (alteration original) (quoting Hozier v. protect participants employee benefit “ Fasteners, Inc., Midwest F.2d beneficiaries, plans and their ERISA ‘es (3d Cir.1990)). The definition of a conduct, responsi standards of tablishes] ERISA broadly is to be bility, and obligation fiduciaries of em ” construed. Curdo v. John Hancock Mut. ployee plans.’ benefit Pilot Ins. Co. Life (3d Co., Ins. Cir. Dedeaux, 41, 44, 107 v. 481 U.S. Life 1994) (citing Grp., Smith Ins. (1987) 95 L.Ed.12d (quoting U.S.C. Hartford 131, 141 Cir.1993)). n. 13 1001(b)). ERISA the circum defines a person entity stances under which is a duties, Among requires other ERISA fiduciary, forth sets the duties these that a fiduciary “discharge his duties with fiduciaries, provides causes of various respect plan solely to a in the interest of designed promote action the enforce participants and beneficiaries and ... ment of these duties. purpose for the providing exclusive of ... ERISA, Under to participants benefits beneficia- their 1104(a)(1). ries.” 29 person U.S.C. respect is a with (i) requires further “[a] extent with to the exercises he any respect to a shall not deal discretionary ... authority discre tionary the assets of the respecting management control his own interest 1106(b). § of such authority or exercises or his own account.” Id. any respect, or At respecting management control or least one these duties can be assets, (ii) disposition its fiduciary’s duty loyal- of he renders characterized of as investment for a or ty- advice fee other jurisdiction jurisdiction §

1. The District Court under 28 We have under 28 U.S.C. 1132(e)(2). § § U.S.C. 1331 and 29 U.S.C. 414 injury-in-fact, as she received suffered no acting Lincoln was contends

Edmonson her pay it chose to owed to under both when all benefits as asset account and Court a retained interest. The District using policy, plus her assets concluding retained Lin- rejected argument, when it later invested this argues both acts profit. for its She full own Edmonson the coln’s failure be- fiduciary duties by were constrained invest- profit it earned from amount of management or acts involved cause the assets constituted retained alternatively, or plan, administration injury-in-fact. The purposes an standing exercising au- the acts involved because injury was Edmonson’s court concluded Lin- thority control over assets. or “spread” the interest between acting longer that it no as argues coln investing the retained earned it chal- took the when ERISA the interest to her. Edmon- paid and, alternatively, that these lenged acts son, court F.Supp.2d at 881. The 111 loyalty. its of acts not breach did Edmon- rejected argument that merely she injury suffered no son provides private enforcement under the action received all she was entitled to by creating causes of duties beneficiaries, See id. participants, policy. available to her brings dis- fiduciaries. appeal Although Lincoln did not

gorgement claim 29 U.S.C. an inde ruling, “federal courts have 1182(a)(3), participant, § allows a which they do pendent obligation to ensure bring a cause of beneficiary, or jurisdiction, of their scope not exceed “(A) enjoin any practice act or action they must raise and decide and therefore any or provision which [ERISA] violates (B) ei jurisdictional questions parties that the to obtain plan, the terms of (i) press.” relief to ther or elect not equitable other overlook appropriate (ii) Shinseki, violations or to enforce ex rel. Henderson v. such Henderson redress — 1197, 1202, terms any provisions -, 179 131 [ERISA] S.Ct. (2011). plan.” Supreme Court de- legal L.Ed.2d 159 We review 1132(a)(3) provi- novo, § “catchall” scribed standing de conclusions related net, safety offering sion which as a “act[s] factual error “but review clear injuries equitable relief for appropriate underlying the District Court’s elements caused violations ^[1132] does not determination standing.” Gen. Instru adequately Varity remedy.” elsewhere Mfg., 197 Corp. ment v. Nu-Tek Elecs. & Howe, 489, 512, 116 S.Ct. Corp. v. 516 U.S. (3d Cir.1999). 83, F.3d (1996) (quotation L.Ed.2d 130 omitted).2 Article III of the United States jurisdiction of fed Constitution “limits the ” Standing

III. eral courts to ‘Cases’ and ‘Controversies.’ Wildlife, 504 U.S. Lujan v. American appeal, On amicus Council Defenders 555, 559, L.Ed.2d Life Edmonson lacks argues Insurers (1992). enforce ease-or-con- bring because she “Courts ” i.e., Pell v. ty,’ law. language "[t]he not claims available Based on Co., Supreme '[elquitable Court has reasoned DuPont de Nemours & E.I. something all (3d Cir.2008) mean less than re- relief must lief,' & (quoting Great-West Life explained Knudson, it has therefore Annuity Co. 534 U.S. Ins. 1132(a)(3) categories only § 'those authorizes 708, 210, (2002)). 151 L.Ed.2d 635 122 S.Ct. equi- typically of that were available relief

415 (Third) through profits.” troversy requirement the several Restatement on Restitu Unjust § tion and Enrichment cmt. doctrines that ‘cluster about 51 a justiciability ” (2011); Bros., see also id. 43 cmt. (stating d Twp. Toll Inc. v. Article III.’ (3d claim based on a duty breach 131, 555 137 Cir. Readington, F.3d loyalty may brought regard be “without 2009) Wright, Allen v. 468 U.S. (quoting injury”); economic (providing examples id. 737, 3315, 750, 82 556 104 S.Ct. L.Ed.2d gains where is liable for even (1984)). These doctrines “include stand loss). though plaintiff no suffered This is mootness, political-ques ing, ripeness, disgorgement claims seek doctrine, prohibition tion and the on advi loss, compensate “deprive[] for a but to sory opinions.” Standing “perhaps Id. wrongdoers ill-gotten gains.” Commod important of these doctrines.” most ity Futures Trading Comm’n v. Am. Met 750, Allen, at 104 468 U.S. S.Ct. 3315. 991 Exchange Corp., als irreducible constitutional “[T]he Cir.1993) omitted). (quotation See S.E.C. ele minimum contains three (5th Huffman, v. 996 F.2d Cir. Lujan, ments.” U.S. S.Ct. 1993) equitable ... (“[D]isgorgement is an First, plaintiff must suffer remedy prevent wrongdoer meant to ” injury-in-fact particu that is concrete and enriching by wrongs.... from himself his imminent, larized actual or as opposed (citations omitted)).3 A requirement of a Second, conjectural hypothetical. Id. net financial loss would allow fiduciaries to must be a be “there causal connection ill-gotten retain profit—exactly what dis injury tween the and the conduct com gorgement designed pre claims are plained ... injury ‘fairly of—the has to be long vent—so as the breaches of challenged to the action of the trace[able] duty do not harm the or beneficiaries. defendant, and not ... th[e] result [of] Accordingly, the nature of disgorgement independent party action of some third suggest claims that a financial is not loss ” (alterations origi before the court.’ required standing, as a not an loss is nal) (quoting E. Ky. Simon v. of a disgorgement Welfare element claim. 26, 41-42, Rights Org., 96 S.Ct. principles provide of ERISA (1976)). “Third, it 48 L.Ed.2d 450 support further conclusion. likely, opposed merely spec must be as loyalty ERISA’s bars a ulative, will injury be redressed profiting from even if no loss to the by a (quotation favorable decision.” Id. 1109(a), occurs. Under 29 U.S.C. omitted). provides plans can recover begin require

We with the first or not suf profit whether ment, injury-in-fact. Generally, disgorge Leigh Engle, fered a financial loss. See (7th Cir.1984) (“ERISA fiduciary duty ment claims for breach of 727 F.2d require plaintiff do not that a suffer a fi clearly contemplates actions fidu against loss, disgorgement assets, nancial as relief in a profit by using ciaries who trust measured “is defendant’s even where the beneficiaries do not contrast, equitable remedy prevent claim for restitution seeks to meant loss, compensate plaintiff enriching so finan- wrongdoer his himself required bring cial loss such a As claim. wrongs. Disgorgement does not to com- aim Appeals the Court for the Fifth Circuit has acts, wrongful pensate the victims explained, "disgorgement precisely is not res- Huffman, restitution does.” Disgorgement ill-gotten gains titution. wrests (citations omitted). wrongdoer. from the hands of a It is loss.”).4 require and her to pur- “The in nature therefore financial suffer direct (citing Id. the fidu- demonstrate individual loss.” rule to deter pose behind this by Unisys Litig., re Sav. Plan 173 F.3d disloyal in conduct ciary engaging from Cir.1999)). She acknowl- of his breach.” profits him the denying however, no di- Clothing edged, she had suffered & Textile Amalgamated Workers Murdock, the 1411 rect financial and conceded “that loss v. Union Cir.1988) (9th a Bogert coverage care and she received as (citing G. G. and Trustees was never affected Bogert, [HMO] Trusts member The Law of (2d ed.1978)).5 physician of the existence incentives.” at 218 Instead, injury she contended her was Id. Notwithstanding principles, these overpaid firm the healthcare her for in Horvath our decision amicus contends that, breach, she absent received East, Inc., 333 Keystone v. Health Plan passed any savings the firm would have (3d Cir.2003), requires plaintiff a F.3d 450 rejected Id. on her. We “dimin- in order to have a financial loss show theory injury as a means ished value” disgorgement a claim. bring injury-in-fact requirement. satisfy The claim Horvath was plaintiffs at Id. 456-57. We also concluded her to disclose details HMO failed theory speculative “far too plaintiffs partici- cost-control incentives offered to serve as basis for a claim of indi- thus physicians, violated pating only “not vidual loss” because rested duty full to make disclosures. ERISA’s assumption a fact- troublesome restitution, disgorgement, She sued accurately finder can determine injunction barring the defendant firm plaintiffs] allegedly amount [the regarding phy- omitting information HMO], overpaid on the no- but also [the from its disclosures sician incentives passed tion that the firm would have at first con- plan members. Id. 455. We savings employees these on to its in the plaintiff did not need to “dem- cluded higher salary form of a or additional ben- actual harm in order to have onstrate efits.” injunctive standing to seek relief.” Id. restitu- Our in Horvath did not revolve 456. But because claims for decision monetary a disgorgement sought plaintiff tion and around whether suffered herself, plan, plaintiff relief as to the financial loss. The never opposed Horvath loss, “are she a financial as we concluded those claims individual contended suffered of, necessarily Nothing suggests text determine the outcome of ERISA beneficiary in or- interpret fiduciary must suffer a financial loss effort to ERISA's duties.” bring against fiduciary der suit Varity Corp., U.S. at 116 S.Ct. 1065. duty loyalty. breach of requirement A not a for a financial loss is unqualified, loyalty provides disgorgement law. Re- claim under trust See discharge ... his duties “shall (ex- (Third) § 100 c statement of Trusts cmt. respect plan solely with to a interest of plaining any profit a trustee "is liable for he participants and beneficiaries and ... for through even made his breach trust purpose providing the exclusive of ... bene- loss”); though see the trust has suffered no participants fits to and their beneficiaries” Eisenberg, also Scanlan and that the “shall not ... deal (7th Cir.2012) (holding a plaintiff had stand- own in his interest bring disgorgement law state his U.S.C. own account.” though were even her ultimate distributions 1104(a)(1), 1106(b) added). (emphases §§ the breach diminished duty). law principles 5. These are consistent with the trusts, inform, which "often will but will 417 premiums right all the to the to employer paid profit her the defendant’s and that any HMO and did not make deductions a plan right when the profit, has to the the employee paychecks. Id. at 452. individual plaintiff has not suffered a con- and her that Despite this fact concession injury. stitutional received all she was entitled to under she Therefore, we conclude a fi plan, we on to determine whether the went nancial a prerequisite loss is not for stand had an in- she nevertheless demonstrated ing to bring disgorgement a claim under Accordingly, loss. we doubt Hor- dividual discussed, ERISA. a As such rule would should read to a financial require vath be contrary be to the nature a disgorge Horvath, beyond Nothing any loss. claim, ment principles law, of trust “loss,” connotation of the possible word principles of ERISA. Edmonson is or that a seek implies states net financial loss is ing recovery on based Lincoln’s required standing bring disgorge- for to a use of Accordingly, belonged claim. to disagree ment we her. Unlike in Horvath, any right with the amicus’ contention that Horvath to recover belongs to her, a financial requires standing loss for not to plan, has there been no bring disgorgement claim. suggestion to the contrary. Accordingly, agree that, we with the District Court for Rather, question in Horvath was standing purposes, Edmonson incurred an plaintiff could individual bring whether injury-in-fact because she “suffered an in claims for and disgorgement restitution or loss, dividual ‘spread’ measured as the any sought by whether relief to be difference” between the profit Lincoln plan.6 She contended that firm over- by investing earned the retained assets paid the healthcare she received due to paid and the interest to her. Edmon the defendant’s But breach. because she son, 881; 777 F.Supp.2d see also Van sought individually, relief for herself we Luitgaren der Sun Ins. Co. right stated she must show an individual Life Canada, 09-CV-11410, No. overpayments. recover WL those She at- (D.Mass. 18, 2010) at *1 Nov. tempted by arguing to do she would (rejecting argument plaintiff higher have received more lacked benefits or salary breach, standing to for disgorgement profit absent sue but she failed to account). showing. earned via a Any injury, make this retained asset But thus relief, Co., any right only see Faber v. Metro. Ins. No. accrued 08- Life (S.D.N.Y. plan, to the individual members. at *5 WL 2009) Accordingly, we (reaching believe Horvath holds that Oct. conclus opposite ion).7 plaintiff must show she an individual Notably, proposition (comparing 6. for the "indi- causes action required, individuals); vidual loss” is court plans Horvath available In re Uni- Unisys Savings Litigation, cited to In re sys, Plan plaintiff’s (concluding 173 F.3d at 159 Varity F.3d at which in turn cited to expert claim failed only because his "referred 507-15, Corp., 516 U.S. at S.Ct. by to those incurred the Fund losses and not requirements These cases neither discuss the any partici- losses incurred individual disgorgement any provide claim nor pants plaintiffs”). named support argument for an that a financial loss Although Appeals Court for the Sec- required bring Horvath, disgorge- Rather, ond Circuit court in affirmed district Fa- claim. ment like both of Co., Metropolitan ber v. Ins. 648 F.3d 98 these cases on the focus difference between a Life (2d Cir.2011), regarding standing brought the issue claim and a individual brought disgorgement plan. Varity See behalf claims was not addressed on 507-15, Corp., appeal. only 516 U.S. at The Second Circuit discussed inju- traceability require alleged sation and found

Finally, amount of hypothetical ry, profit, ques ment met even where conduct evidence of how speculative. There is might proximate tion not have been a by making in- Lincoln earned profit much harm, intervening cause of the due general pool, in asset vestments with News, events. Pitt 360-61 It were held. is which the retained assets traceability (finding requirement met to determine a of mathematics question regulation where was cause-in-fact of re- profit was the much of Lincoln’s how par newspaper’s lost revenue when third its of Edmonson’s sult of investment buying ties be stopped advertisements claim $10,000. Edmonson’s Importantly, action). regulatory cause the that, up not is had Lincoln set the not selecting payment acts of the method of Account, in- would have SecureLine she the al investing and then retained assets on her own. vested retained could profit. lowed Lincoln to Edmonson Accordingly, it does not matter that there af profiting have Lincoln from prevented how would have used is no evidence of she up by ter it SecureLine Account set they been retained benefits had not immediately withdrawing all of her bene Lincoln. Nevertheless, fits. we conclude Edmon summarize, To an ERISA benefi injury—Lincoln’s keep son’s decision to injury-in-fact sufficient to ciary suffers an to profit “fairly for itself—is traceable” a claim when a defen bring disgorgement via pay its initial decision to her the re fiduciary duty, its allegedly dant breaches Allen, 468 at tained asset account. U.S. breach, profits from the beneficia 751, 104 S.Ct. 3315. plan, has an individu ry, opposed as to al to right profit.8 As Edmonson has final element of constitutional The we requirements,

met these conclude redressability, standing requires which inju standing suffered an purposes she likely, that must be as mere ry-in-fact. opposed “it to injury re ly speculative, that will be The of Article requirement second Lujan, dressed favorable decision.” standing, causation, requires III that “the (quotation at 112 S.Ct. 2130 causally connected alleged injury-in-fact is omitted). she Edmonson contends is enti to an action the defen and traceable profit disgorgement.9 tled via to Lincoln’s Fisher, 215 F.3d Pitt News v. ].” dant Therefore, we conclude Edmonson has (3d Cir.2000); Lujan, 504 U.S. see bring under Article to standing III at 2130. have We described against Lincoln al- requirement disgorgement as akin to “but for” cau- bring disgorge- injury-in-fact to plaintiff had constitutional stand- sufficient whether relief, Horvath, id. injunctive at to seek like ment claim. In cases when question explicitly declined reach right profit belongs to the defendant's standing plaintiff to seek whether plan, beneficiary not suffered constitu- ("[0]ur analysis disgorgement, id. merits injury. tional depend on Faber also has does not whether light disgorgement.... seek standing purposes, we assume without For complaint ultimate that the our conclusion deciding that is correct claim, required fails to state a we are remedy disgorgement would entitle ERISA’s question[].”). th[is] answer though profit it com- her to Lincoln's even requirement plied with its contractual demonstrates, every breach As Horvath agreed-upon rate. her interest will cause beneficiaries to suffer an breaching fiduciary duty loy- lien, trust or an legedly equitable money where alty. property identified as belonging good plaintiff

conscience to the could clearly be Statutory Standing IV. traced particular property funds or possession.” defendant’s Id. The Court having In addition to Article further explained that “for restitution to standing, plaintiff an ERISA must also III in equity, lie generally action must standing. statutory have Graden Co seek not impose personal liability on the Inc., Sys. nexant defendant,” a claim for breach of con Cir.2007). “Statutory standing simply 214, 122 tract does. Id. S.Ct. 708. Rath statutory interpretation,” and we ask er, equity restitution lies in when the relief provided whether the remedies for in seeks “to plaintiff particular restore plaintiff particular ERISA allow the funds or in property pos defendant’s bring particular claim. Id. As dis 214, 122 session.” Id. at S.Ct. 708.10 cussed, disgorgement seeks un noted, however, The Court that “an ac 1132(a)(3), § only which for provides der counting for a profits, equitable form relief.” “appropriate equitable restitution,” a exception” is “limited to its argues Lincoln that not all dis rule defining the nature of equitable reme necessarily is in na gorgement equitable 2, dies. “If, Id. at 214 n. 122 S.Ct. 708. for ture, relying on & Great-West Annui Life example, plaintiff a is entitled to a con Knudson, ty 204, Ins. Co. v. 122 534 U.S. structive on particular property trust held (2002). 708, 151 L.Ed.2d In S.Ct. 635 defendant, may he also recover Life, the Court Great-West held relief produced by profits the defendant’s use of 1132(a)(3) under is only available when a property, even if identify he cannot a restitution, plaintiff equitable op seeks as particular containing profits sought res posed only to restitution available at law. to be sought by recovered.” The relief The Court all explained “not relief exception Edmonson falls within this falling under the rubric of restitution is general principles in established days in equity. available Life, disgorgement GreaP-West and ac bench, divided available in restitution was counting profits essentially for are law, certain cases at and in certain others (Third) same See remedy. Restatement 212, equity.” 122 Id. at S.Ct. 708. For on Unjust Restitution and Enrichment example, “plaintiff when a not assert (“Restitution could 51(4); id. cmt. measured right possession particular title or gain wrongful defendant’s is fre property, might but ... nevertheless be quently ‘disgorgement.’ called Other just grounds recovering able show ‘accounting’ cases an or an refer to ‘ac money plaintiff ... a right ”); counting profit.’ also Great- see 122 restitution at law.” Id. Life, U.S. at West S.Ct. 708 omitted). contrast, (quotation “In (instructing courts look to Restate plaintiff equity, disgorgement could seek restitution ments for guidance). The ordinarily remedy though the form of a constructive even equitable is Partners, distinguished 10. When we restitution from richment. F.T.C. v. See Bronson above, disgorgement using LLC, (2d Cir.2011). we were term 654 F.3d The particular remedy. restitution to refer to a using Court in Great-West the term Life Restitution, however, can also be used more and, accordingly, analy- in the latter sense metonym generally class “as a for the of rem- applies disgorgement. sis claims for unjust particularly edies identified” with en- challenged if of the two the retained either longer possession no type involved either conduct. actions assets, for a constructive making a claim v. E.I. unnecessary. See Skretvedt trust ac the use retained asset Whether Nemours, 372 F.3d De DuPont a question runs afoul of ERISA is counts Cir.2004) (concluding that a claim to impression this circuit. Two first illegally re interest earned recover our circuits have considered sister under Great- equitable tained benefits con question, but have come to different defendant had though even West Ins. See Faber Metro. clusions. Life Life benefits over to voluntarily paid the (2d Cir.2011) (con Co., 98, 107 that no constructive plaintiff, meaning cluding the use of a retained asset account required). Ac trust the benefits was over did not violate ERISA when insurance Edmonson’s cordingly, we conclude it); Mogel v. policy provided for UNUM ac which is akin disgorgement, (1st Co., 26-27 Cir. Ins. Life profits, equitable reme counting 2008) the use of retained (concluding ERISA and dy Great-West available account did violate ERISA when the asset policy required lump pay sum insurance Life.11 ment). rely heavily on these parties cases, begin synopsis so will with a two we Merits V. key of them. But there a factual dis merits of Ed turn to the We now and our tinction between these cases case: claim that Lincoln breached monson’s in our are as plan case silent policy trial court loyalty. of The ERISA pay to how Lincoln is to Edmonson. acting not as a fidu concluded Lincoln was provided Mogel, policies In at issue subject to ciary it the actions when took “ payable paid ‘all ... will be that benefits granted complaint and Lincoln’s motion Company as as the Insurance re- soon judgment.12 summary to it’ and proof acceptable of claim ceives elected, payment recapitulate, To Edmonson contends otherwise ‘[u]nless in lump it selected of life will be made one Lincoln violated ERISA when loss ” (alterations origi- in the method of sum.’ 547 F.3d at Account as SecureLine nal). Appeals it The Court of the First payment again when invested a plaintiffs alleged Circuit held the had profit. retained assets for its own She triggered fiduciary pay- of acts of duties because argues both these breach a account not they involved the ment via retained asset did fiduciary duties because satisfy payment that be plan, requirement or management administration in a sum. at 26-27. The alternatively, authority lump exercise of or made Id. rejected argument plan Lincoln acted as court the defendant’s control over assets. goes of her dissent Edmonson lacks the retained assets merits The concludes claim, statutory standing. statutory standing cannot because she demon- to a strate she would be entitled constructive assets, grant as the dissent trust over retained "We district of sum- review a court's novo, legal judgment applying had title over the mary contends Edmonson de the same (we question applied.” had court Viera whether Edmonson standard district $10,000 Am., legal had been title over that Ins. Co. N. Life Cir.2011). general pool Summary appropriate segregated judgment asset from Lincoln’s complete genuine dispute of con- there material and over which Lincoln had when is no trol). judgment as importantly, and the is entitled whether Edmonson movant More fact 56(a). a matter of law. Fed.R.Civ.P. have asserted a constructive trust over could fiduciary retained in a when capacity the selection of the asset it invested occurred after payment account method of the funds backing Plaintiffs’ [retained duties, fiduciary it had fulfilled its which asset accounts]. in- apparently contended the defendant Id. at 104. The court then determined merely approving processing

volved plan the retained assets were not the claim. Id. at 26. The court stated assets, plan ownership because the had no contention “rests the defendant’s interest them at the time defendant reality” because “it obscures quicksand,” invested them. at 106. Accordingly, Id. plaintiffs received the re- argue had acting fiduciary the defendant was not quired sum when the lump payment defen- capacity when it invested the retained as- asset up dant set the retained account. sets, plaintiffs’ ERISA claim failed. Id. The court concluded the defendant had not “completed its functions un- A. Payment Selection the Method plan,” plaintiffs der the and thus the argues Lincoln breached its fiduciary duty. alleged a breach fiduciary duty it when selected the Secure- Faber, documents one Line Account paying as the method of her stated, “[p]ayment policies at issue She argues acting benefits. Lincoln was as $7,500 death benefit or more is made when it took this action because under MetLife’s Total Account Control management this act involved the ad- [i.e., a retained asset The death account]. or, ministration of alternatively, deposited benefit amount is an interest this act exercising involved au- money bearing your market account and thority or control over assets. See 29 provided beneficiary is with checkbook to 1002(21)(A). U.S.C. We hold Lin- writing use for checks to withdraw funds.” acting coln was when at 100-01. documents chose to via SecureLine Ac- policies similarly for the other at issue and, extent, count to we depart provided, the benefit from a single “[i]f thoughtful the of analysis the trial court. $6,000, more, beneficiary claim is or your conclude, however, explain, We as we later may receive basic life insurance benefits that Lincoln fiduciary did not breach its the options under one of several available it pay- when this form selected of Beneficiary’s under the Ac- Total Control ment. (TCA) Program.” count Id. at 101. The Appeals Court of Second Circuit held company the insurance did not violate Edmonson contends that paying

ERISA when benefits via of selection the SecureLine Account as the account, retained in part asset because the triggered payment method of fidu ERISA plan documents allowed it do expressly to ciary duties because it involved “man so. at 107. The court concluded agement” plan. or “administration” discharged fiduciary MetLife obli- (“[A] 1002(21)(A) person is a U.S.C. gations aas claims administrator and fiduciary respect plan to a to the when, fiduciary ceased to an be any discretionary extent ... he exercises Plans, accordance with the created authority discretionary respect or accounts], control [retained Plaintiffs’ asset ing management plan of such or ... has them credited with the amount of bene- due, any discretionary authority or fits discretion enabling and issued checkbooks ary of proceeds responsibility Plaintiffs to withdraw their at the administration Thus, any acting discretionary time. was not plan....”). Only MetLife such acts this act argument at oral management conceded or administration plan of fiduciary governed “Since discretion- ERISA’s fiduciary duties. was trigger control ary authority, responsibility or choice Lincoln had the whether duties.13 status, fiduciary it follows to prerequisite the SecureLine pay Edmonson with purely ministe- perform who persons pay- other form of Account or with some processing tasks, claims rial such as of discretion. ment. This is definition fiduciaries calculation, be cannot Faber, (emphasiz- 104-05 648 F.3d at Cf. discretionary roles.” they not have do for the plan provided that the issue Co., Eng’g v. Custom Confer the benefits us- company pay insurance (3d Cir.1991). Accordingly, when a account). The choice ing a retained asset performance of requires plan policy or how also stands or administra- plan management an act of clear contrast with those activities manner, then ERISA’s specific tion in a given Labor as exam- Department of has But implicated. duties are not See 29 C.F.R. ples of ministerial acts. permits some lee- plan policy when the or (listing, example, ap- 2509.75-8 performed, then the way in how act determining eligibility of rules plication discretionary perform choice on how benefits, calculation of participation is cabined ERISA’s act compensation credits services duties. benefits, employee commu- preparation of “management” the terms To define benefits, material, calculation nications ERISA, of a “administration” advising rights, of their col- participants law, which, we to the common over “look contributions, processing of lection such as given terms years, claims). legal ‘fiduciary’and trust ‘administration’ which, normally presume, meaning to we pay- Lincoln’s selection of method Corp., Varity Congress meant to refer.” ment an act of administration 1065. “The 116 S.Ct. management. “disposition understanding fidu ordinary trust law under the beneficiaries benefits of a trust is ciary ‘administration’ comfortably scope falls within perform act is to administrator duties with ERISA’s definition powers imposed, or exercise duties respect Mogel, administration.” conferred, by trust documents.” Id. Varity Corp., (citing 547 F.3d at (Second) of Trusts (citing Restatement 1065); Pegram, 116 S.Ct. see (1957)). law, fiduciary § “At common (“At com- 530 U.S. characteristically to decisions attach duties law, characteristically fiduciary mon duties managing distributing assets and about managing assets attach to decisions about Pegram v. property beneficiaries.” distributing property beneficia- Herdrich, 211, 231, 120 S.Ct. 530 U.S. ries.”). Accordingly, Lincoln’s decision (2000). 2143, 147L.Ed.2d 164 Account pay Edmonson via the SecureLine discretionary plan act of constituted Although initially con Lincoln administration, Lin- management pay the method of the selection of tended fiduciary subject to ERISA’s coln was discretionary nor act ment was neither performed it this act. management, it duties when plan of administration or summary judgment. motions for Court did not have the The able District ruling on when benefit of concession Lincoln’s selection of the method Lincoln present and the amicus several payment exercising arguments why also involved au payment avia retained assets, over asset account thority plan or control advances the interests fiduciary beneficiary. For triggered indepen example, they duties for this argue some beneficiaries are grieving dent and alternative See 29 reason. loss of 1002(21)(A)(“[A] relative, a close thus not in an person U.S.C. is fidu ideal position to ciary to a determine what to do with a respect to the extent large lump sum of authority money. ... But these ar- any exercises or control [he] guments miss the mark. The issue is not respecting management disposition ”). whether the retained asset account is in its assets.... It is undisputed rather, the interest of beneficiary; policy asset. Under ERISA’s issue is whether Lincoln’s selection of the guaranteed provision, exemption benefit retained “solely asset account was in the when “a which a guaranteed bene interest” of Edmonson and “for exclu- policy insurer,” here, fit is issued purpose” sive providing benefits to her. “the assets of shall such be deemed to 1104(a)(1)(A). §id. 1101(b)(2). See policy.” include such authority exercised and control The purpose of establishing Secure- over the when it policy selected the meth Line pay Account towas Edmonson bene- payment od of because Lincoln had discre fits. Lincoln not directly gain any did tion type payment. to determine the financial benefit this decision. Nev- Therefore, we conclude Lincoln acted as a ertheless, Edmonson contends this deci- it when chose to Edmonson solely sion was not in her interest because using the SecureLine Account for the al put position it Lincoln in a it might where ternative reason this action involved profit by investing the retained assets. authority exercising and control over plan compared payment check, When via a assets. asserts, payment via a retained

asset account was better for Lincoln be- potential profit. cause created the This potential profit, poten- increased We now address whether se wholly tial that dependent on Edmon- lection of the SecureLine Account as the actions, son’s is insufficient result in method payment was a of Lin breach breach of Lincoln’s duties. fiduciary duty. coln’s Edmonson contends the selection of the SecureLine Account as any ‘ERISA does mandate payment payment method of breached ... specific mode of bene ” Inc., loyalty. provides Labs., Woolsey “a fits.’ Marion v. (10th Cir.1991) discharge shall his duties with (quoting ’ respect plan solely Plan, to a interest of Emps. Oster Barco Cal. Ret. and—(A) (9th the participants Cir.1988)); and beneficiaries see (i) for purpose Sons, the providing Pompano exclusive of: v. Michael Schiavone & Inc., (2d Cir.1982) (“Nei 911, benefits participants to beneficia 680 their F.2d 916 (ii) ries; defraying reasonable ex legislative history ther nor its [ERISA] penses administering plan.” of the 29 comments on the mode or manner which 1104(a)(1). U.S.C. prohibits paid.”). ERISA also be “[T]he benefits should re a fiduciary “deal[ing] from with the assets payment tained-asset account method of is of the in his own necessarily or for his not in interest itself inconsistent with 1106(b)(1). ERISA,” own Luitgaren account.” Id. Sun Vander v. Life 424 Canada, And, 09-11410, profit. impor- the for own No. assets its Co.

Assurance of (D.Mass. tantly, prevented could have 5875526,at Nov. Edmonson *11 2012 WL investing Lincoln from the retained 2012), it ERISA’s “is inconsistent arrange by withdrawing of them from the SecureLine type this goals prohibit to Ed- Accordingly, Account.15 conclude v. Ins. Co. we ment.” Merrimon Unum Life (D.Me. disgorgement monson not entitled to the Am., F.Supp.2d of 2012). to profit Lincoln based on its decision Accordingly, we conclude the SecureLine Account. its duties when it establish did not breach pay to Edmonson exercised its discretion B. Investment the Retained Assets asset account.14

with a retained argues Edmonson also that Lincoln Finally, assuming there even it in- breached its duties when breach, not entitled was a Edmonson is for its own vested retained assets directly not relief the breach did act gov- benefit. contends this She relief, for which she seeks injury cause the erned ERISA because it involved profit. its own Lincoln’s investment management of a administration plaintiff requires show that or, alternatively, authority exercise of the injury proximate was a cause argues She or control over assets. duty. Blue breach of Willett v. Cross and Lincoln’s decision invest retained Ala., F.2d Blue Shield of profit assets for its own violated its (11th Cir.1992). never invest Had Lincoln loyalty. assets, given ed the retained Edmonson earned, have profit all the she would 1. via the re injury. Payment

suffered no itself, noted, account, her caused As Edmonson contends tained asset the ac involved injury. no The establishment of investment the retained assets management or commanded the or administration of the guaranteed count neither investing plan. argues longer act of that it was no Lincoln take later challenged the amount more identical to its decision to Edmonson also interest as her, ultimately paid interest but we do not profit from the investment of retained challenge relate Lincoln's consider assets. initial decision to create and set the terms for Account. The minimum in- SecureLine does conflict with our This conclusion pay, as forth terest rate Lincoln would set earlier conclusion that the decision to invest Account's Terms and Condi- SecureLine "fairly the retained assets was traceable” to tions, average publish- rate 1% above Account establishment SecureLine Bloomberg interest-bearing ed by check- standing. purposes Article III ing argue does not accounts. Edmonson requirement “fairly traceable” constitu- minimum this initial decision what interest bar tional sets lower than pay rate to her violated ERISA. required showing of causation on the merits. Rather, argues that Lincoln Edmonson News, (treat- See The Pitt 215 F.3d at 360-61 pay her chose not above minimum akin constitutional causation as to but-for rate, thereby profiting from investment of causation); Sys. Gandy, Nova Health Axiomatically, the retained assets. Lincoln's Cir.2005) ("As (10th other higher rate decision interest noted, courts have Article causation re- Ill’s profit it to investment of the allowed quirement 'something less demands than we Accordingly, do not con- retained assets. ” concept proximate (quoting cause.’ Focus ulti- decision on the interest sider Lincoln's Family v. Transit on the Pinellas Suncoast mately paid to to constitute an Auth., (11th Cir.2003))). Instead, independent discretionary we act. pay treat Lincoln's decision not to Edmonson administering or once it funds.” managing plan Accordingly, Id. at the court Account, subject held was still SecureLine but rather UNUM to up set relationship duties even after it set up in a creditor-debtor with the retained asset account. when it the retained invested (hold- Faber, See at 105 assets. 648 F.Bd that, Edmonson contends like in Mogel, discharged company the insurance its Lincoln to fulfill obligation failed its to fiduciary duty when it established the re- her, “pay” thus was still or managing account in with the tained asset accordance administering plan when it invested policy). analogizes insurance Lincoln its the retained assets. But the terms of the relationship with Edmonson at that time to policy Mogel in required an immediate bank, that of a customer and a bank lump payment upon sum receipt proof deposited will invest customer’s policy of a claim. Because the here is profit, to the pay its own interest payment, silent as to the form of Lincoln in profit an amount less than the customer as to comply discretion how to its with it earns. requirements, under its contractual obli- and, gations above, as we concluded under

Nothing provides in the plan policy or Accordingly, ERISA. Lincoln its fulfilled respect any duty that Lincoln had with obligation pay Edmonson when it estab- plan or managing administering the be- lished the SecureLine Account.16 payment yond its of benefits to Edmonson. argued anything

Nor has Edmonson Faber, Lincoln, relying on argues that policy or required once it its obligation pay satisfied any perform act of or management benefits, no longer it was managing administration once it her the bene- paid Faber, administering plan. Rather, she fits. contends Lincoln failed Court of Appeals the Second Circuit “pay” required policy, her as held arguing the establishment of the Se- discharged MetLife obli- pay- Account cureLine did not constitute gations as a claims administrator and ment benefits. when, ceased to be Plans, with accordance it created our Edmonson directs attention Mo- accounts], [retained Plaintiffs’ asset in which gel, the court stated “when credited with the amount them of bene- says plaintiffs paid, UNUM had been due, enabling fits issued checkbooks referring already the sums deemed to proceeds Plaintiffs to withdraw their Plaintiffs, reality.” belong obscures Thus, any acting time. MetLife was not omitted). (quotation 547 F.3d fiduciary capacity in a when it invested euphemistically court concluded “the backing the funds Plaintiffs’ [retained Account,’ ‘Security accompanied named accounts]. asset checkbook, than with a was no more Faber, did IOU which not transfer the funds to at 104. The court con- tinued, “[n]othing which the beneficiaries out of in the [plans], were entitled or in the any assets and re- complaint, provides hence UNUM indication that a fiduciary mained to those respect after the asset were [retained accounts] inapposite. They only 16. Edmonson cites to several authorities for these cases are hold paid proposition payment security debts must be that forms of such as See, agreed upon, mortgage check cash or unless otherwise cannot be used to a debt. Stevens, Inc., plain e.g., and thus Lincoln violated the terms of re In WestPoint Cir.2010). paying But her with a check. Supreme either Plaintiffs or MetLife Edmonson takes the Court’s established quotation Varity Corp. from context. out of rela- contemplated fiduciary an indefinite Corp., was Varity the relevant issue “To the extent tionship.” Id. 105. Varity, acted the whether who as both the obligated MetLife honor remained plan and the administra- employer benefits pay interest account holder’s ‘checks’ tor, managing administering or the was rate, guaranteed at a we believe that this plan misrepresentations it when made arrangement straightfor- constituted viability of the employees about relationship gov- ward creditor-debtor 494-95, plan. Id. at 116 S.Ct. 1065. The Agreements and by erned the Customer repre- defendant asserted because its law, agree. not ERISA.” Id. We state plan, were required by sentations not Nonetheless, contends Lin- Edmonson employer, it in its and not as acted role fiduciary management duties over coln’s plan administrator. 116 S.Ct. plan of the continued and administration rejected argument 1065. The Court this Ac- after it the SecureLine established quoted with the Accord- rationale above. count if Lincoln had fulfilled its obli- even ingly, the Court that even if an act stated gations plan. under the relies to her She required by plan, may impli- is not it largely following quote Varity on the cate duties.

Corp. v. Howe: Corp. suggest Lin- Varity does not fiduciary duty plan coln’s administer trust) (or plan

There is more adminis- after its continued it satisfied contractual simply complying tration than with the benefits, nor Edmonson imposed by plan specific docu- duties fiduciary’s implicate obligation did it statutory it in- regime; ments or also plan. find manage or administer We ‘ordinary that are cludes the activities rationale persuasive Faber’s and conclude achieving and natural means’ of the ‘ob- completed obligations Lincoln had Indeed, jective’ plan. primary respect managing administering or fiduciary duty is function of the to con- plan once it established the SecureLine discretionary pow- strain the exercise of Lincoln Accordingly, Account. was ers which are controlled no other managing administering when specific duty imposed by the in- trust it assets. invested retained regime. or the If the legal strument fiduciary duty applied to more nothing already than activities controlled oth- alternatively argues duties, it specific legal er would serve no acting that Lincoln as a purpose. it invested be when the retained assets 504, 116 (emphasis 516 U.S. at S.Ct. 1065 exercising that act authori cause involved omitted) (quoting Bogert Bogert, G. & G. ty or control over See 29 assets. Law Trusts and Trustees at 41- 1002(21)(A)(“[A]person U.S.C. fidu 52). quote, Based on Edmonson con- respect ciary with to the extent acting (i) tends Lincoln was as a whether any authority ... or con he exercises as- when invested retained disposition trol respecting management ”). requires go beyond question sets us to its assets.... contends whether Lincoln had satisfied its duties assets retained were assets. We agree.17 plan. argues authority Lincoln also that it did not have or control over retained ficiary-turned-account holder specific statutory simply the absence of or aas “[I]n here, relationship fundamentally creditor—a guidance,” as “the term dif- regulatory ferent from an ERISA given ordinary its relation- assets’ should be ‘plan ship with panoply discretionary its should be con au- meaning, and therefore thority responsibility.” Id. by owned an property refer strued Labor plan.” Sec’y Doyle, v. conclusion, In reaching its the Faber Cir.2012) (3d (citing F.3d In court part relied in on an amicus (10th Luna, 1192, 1199 Cir. re brief/opinion by letter submitted the Sec- 2005)). is also consistent approach “This Labor, retary Secretary in which the guidance provided by Secretary the with alia, argued, inter that the retained assets assets,’ meaning ‘plan on the Labor] [of plan were not The Secretary pos- assets. plan states that assets of a which ‘the ordinary ited that the notions of property on the generally are to be identified basis rights an determine whether asset ais rights ordinary notions of un property asset, plan any- and considered whether general, non-ERISA law. the as der thing in plan the documents elsewhere plan any of a welfare include sets would gave plans ownership an in the interest tangible intangible, which property, assets, noting retained “whether ownership has a inter plan beneficial particular ‘plan asset asset’ requires is a ” Labor, Id. (quoting Dep’t est.’ Adviso factual inquiry parties’ representa- into the 93-14A, Op. at *4 ry No. 1993 WL understandings.” tions and Brief of U.S. 5,1993)).18 (May Dep’t of Faber v. Labor at Metro. Life Co., Cir.2011). Ins. 648 F.3d 98 The applied approach The Faber court this “ Secretary there concluded was no evidence concluded the ‘retained assets’ are plan ownership had interest in the ‘plan not assets’ the Plans do not because asset, retained thus the retained as- an ownership have interest—beneficial or sets were assets. plan not The Faber Faber, them.” otherwise—in adopted court this conclusion. explained The court that once 106. created, retained asset accounts were Lincoln urges pay us to deference to the company’s “remaining insurance obli- Secretary’s opinion under Skidmore are to gations Co., honor checks drawn on the & 65 S.Ct. Swift pay (1944). asset and to Skidmore, [retained inter- accounts] L.Ed. 124 Under we at the Id. It stipulated Secretary’s est rate.” con- opinion defer to the letter ordinary thoroughness cluded “under notions of based on “the evident in its rights, relationship consideration, property validity reasoning, this involves its simply earlier consistency pro- MetLife as a debtor the bene- with and later not, ability policy, deemed to but had with- include such shall the entire draw balance her retained solely by poli- reason of the issuance of such any account at time. Based on asset our cy, any be deemed to include assets of such conclusion the retained assets were not 1101(b)(2). par- insurer.” 29 The U.S.C. assets, plan argument. we do not reach appear agree exemption ties also that this longer applied no once Lincoln established parties agree assets held Lin- account for retained asset Edmonson. coln Edmonson submitted her claim before guaranteed While the amicus finds benefit assets, plan guaranteed were exemption significant, arguing to be that the policy exemption pro- ERISA. benefit This "suddenly” assets would not turn into provides, case of a "[i]n vision assets, we, place parties, like do not much guaranteed policy which benefit is issued emphasis on it. insurer, the assets of such shall be Moreover, obligation which Edmonson. nouncements, those factors and all 140, 65 Mogel holding the re- power persuade.” we do not read give disagree no see reason Mogel We assets. The tained assets were legal argument Secretary’s court, company after the insurance finding rights of property ordinary notions discharged its contractual duties asset, plan an asset is a determine whether sum, con- policy pay lump under the to plan and look to the and that we should plaintiffs “the due remain cluded sums making in this deter- the plan documents plan subject assets to UNUM’s Furthermore, suggests Doyle mination. payment.” Mogel, actual obligations until in law our circuit. See already the court, Mogel howev- 547 F.3d 26. The the at 203. But as Secre- Doyle, 675 F.3d er, plan not that are to did mention assets specific assets are tary states, whether ordinary the no- be determined based on ultimately inquiry, a factual plan assets is it property rights, tions of nor consider did here specific to the facts so we must turn Rather, as plan the definition of assets. to make this determination.19 stated, “Mogel Faber court is better the anything in not identified Edmonson has fact, as on not predicated understood the supports or documents that plan policy the here, to present the insurer failed an owner- plan a conclusion the retained by plan requiring abide terms it to distrib- after in the retained assets ship interest sums,” lump ute in thus was benefits Ac- the Lincoln established SecureLine plan. managing administering still or an argues plan count. Edmonson Faber, 106-07; see 648 F.3d at also Merri- in the assets ownership interest retained mon, F.Supp.2d (explaining at 318-19 money in its kept Lincoln because Mogel’s holding” “core “did not re- present- general account until draft was to quire First Circuit find payment, depositing rather than ed for plaintiffs plan due to those sums were backing in funds the bank the SecureLine assets,” that “if opining the First Cir- Account, pay them and if Lincoln failed to issue required cuit were address the her, But plan would liable. over be squarely, would not hold that the funds authority Edmonson to no for this cites backing the asset accounts] [retained point any pro- proposition, and does assets”); are Luit- plan this case Vander support it. plan policy vision (similarly garen, 2012 WL *8 compelled if plan Even could be be finding Mogel interpreted should not Lincoln, that rights against enforce its as- holding plan the retained assets were ownership right equivalent is not sets). Mogel provides little Accordingly, funds. general stake account argument that the support Edmonson’s we should follow Edmonson contends plan retained assets were assets. Mogel and the retained assets conclude Alternatively, urges ap- us to via a payment were assets ply approach” the “functional to determin- satisfy Lin- retained account failed to asset asset, discussed, as set duty we whether asset is pay coln’s her. As Appeals for the disagree to fulfill its forth Court failed however, analy- on urges disregard opinion, primarily focused 19. Edmonson us to persua- that case were sis in the recent deci- whether briefs in letter brief because the sive, argument Christopher that Christo- sion in v. SmithKline Beecham so Edmonson’s - --, legitimacy pher generally on Corp., casts doubt (2012), Secretary paying is unavail- L.Ed.2d casts of amicus briefs from doubt ing. Christopher See id. at 2169-70. deference to such briefs. The Enter- Circuit in Acosta v. chose to Edmonson with a Ninth retained Pacific (9th Cir.1991). Under 950 F.2d 611 prises, asset and then account invested the re- Acosta, “the an asset is a asset when tained for its own profit. The deci- question may used to the bene- item in be sion to pay Edmonson the retained otherwise) (financial of the fit asset account did not breach Lincoln’s or ben- expense participants at the loyalty her. And when Lincoln stated, recently Id. at 620. We eficiaries.” assets, then the retained invested it was dicta, may that “this be approach albeit in acting fiduciary capacity. in a Accord- items considering when whether helpful ingly, affirm judgment we will cash or financial instruments other than District Court. of an are considered assets properly plan.” Doyle, at 203 n. JORDAN, Judge, Dissenting. Circuit a later footnote in that we opinion, 33. In I agree Majority with the and the Dis- “Supreme Court has also stated trict Lincoln Court that should win suggested approach that strongly [the case, but I would vacate and remand for ordinary property of based notions complaint dismissal of the rights] proper approach defining is the because Edmon- ” (citing ‘plan Id. at 204 n. 34 Jack- son statutory assets.’ lacks both constitutional and States, 1163, 129 son v. United 555 U.S. she standing, since abandoned her claim (2009)).20 L.Ed.2d 575 injunctive for relief under and payment seeks only the funds she claims suggests apply that not Doyle we should wrongfully that Lincoln retained. I would ques- approach, as the assets Acosta not reach issue of the alleged breach of tion are cash financial instruments. Cf. fiduciary duty under ERISA. Acosta, (considering 950 F.2d at 620 participant-shareholder a list was whether ERISA, “To civil action a bring a under asset). any event, In assets at plan a constitutional, plaintiff must have pruden- not plan issue are assets under Acosta. tial, statutory standing.” Leuthner v. Lincoln Although used the assets its Pa., Blue Cross & Blue Shield Ne. benefit, it “at own did not use them (3d Cir.2006). F.3d Constitutional expense participants or beneficia- out, standing, Majority points as the re- ries.” Id. quires injury-in-fact, elements: a three conclude We the retained assets were injury causal connection between that short, assets. In set once Lincoln conduct, complained-of and the likeli- Account, SecureLine no up the injury by hood that can be redressed and, had an longer interest the assets element, court action. As to the first it is ordinary rights, notions of property that injury-in-fact well-established “[a]n Lincoln Edmonson were in a creditor- palpable must be a distinct harm Lin- relationship. Accordingly, debtor plaintiff per- ... in a that[ ] affect[s] conduct was not constrained coln’s way.” v. sonal and individual Freeman loyalty. ERISA’s Cir.2010) Corzine, (3d (internal omitted). marks quotation

VI. Conclusion Majority plaintiff The seems to treat a We conclude did not breach fiduciary duties when it a demanding disgorgement special under ERISA as case Jackson, property rights ap- ordinary the Court vacated the lower of the notions of light court’s decision in of the Solicitor Gen- proach. Doyle, 675 F.3d at 204 n. 34. See brief, application argued which eral's for the that she under the injury-in-fact require- care received of the purposes deficient, way sought any was in she both standing. suggests It III

ment Article injunctive relief as well restitution or as seeking remedy that need plaintiff which she disgorgement amount injury actual not demonstrate putative and other members class a net financial loss requirement of “[a] overpaid a result of supposedly as retain ill-gotten allow fiduciaries would required fiduciary’s failure make disgorgement claims profit—exactly what plaintiff We decided that disclosures. long as the prevent—so designed are under ERISA claiming breach fiduciary duty do harm the breaches harm in or- “need not demonstrate actual (Majority atOp. plan or beneficiaries.” injunctive der to have to seek 415.) Thus, Majority concludes comply relief’ require disgorgement sug- claims “the nature of ERISA, “requests but resti- required loss is not that a financial gests] disgorgement, tution and both of which are standing, a loss is not element nature[,] require ... individual (Id. 415)1 disgorgement claim.” individual loss.” Id. demonstrate however, conclusion, counter That runs insists, true, Majority It as the Keystone holding our in Horvath present Horvath is different from the case. Inc., East, Plan 333 F.3d 450 Health “premised plaintiffs there was Cir.2003). case, In an ERISA that that argument overpaid on her her firm a fiduciary that had participant alleged id., received,” for the healthcare she fi- requirement an that a violated other there was no evidence of individual relating duciary “all material facts disclose case, contrast, by In this as harm. provides.” it benefits Id. to the insurance observed, alleged District “Plaintiff Court (internal omitted). marks quotation at 453 loss, that an individual meas- she suffered said that particular, plaintiff ‘spread’ ured or difference between as phy- certain had failed to disclose allegedly that Defendant interest potential had the sician incentives that in Plaintiffs earned on benefits Se- of care quality provid- account, decrease the overall interest cureLine and the that not al- Although plaintiff ed. did paid Defendant Plaintiff.” Edmonson Co., personally that she affected v. lege had been Lincoln Nat’l Ins. 777 Life (E.D.Pa.2011).2 869, that 881 by F.Supp.2d the existence of the incentives or Majority support for Court that that The that conclu The District concluded finds fact, allegation injury “a in sufficient of "principles of whose sion in the ERISA” by defendant’s conduct” to establish caused "duty loyalty profit bars standing. III Edmonson v. Lincoln Article (Ma ing even if no loss to the occurs.” Co., F.Supp.2d Ins. Nat’l Life 415.) jority Op. approach conflates That however, (E.D.Pa.2011). Court, The consid statutory standing in a constitutional and standing only response in ered inapt particularly manner that is in this case. declined motion to dismiss. The Court Although injury actual or threatened "[t]he by support of follow a case cited Lincoln in by required may solely by exist virtue Art. Ill argument that be Edmonson lacked creating legal rights, statutes the invasion cause, view, "imposed it Court’s too standing,” only of which that is true creates respect high plaintiff on a burden regard injunctive "with relief.” Horvath jurisdictional allegations on a Rule Inc., East, KeystoneHealth Plan 333 F.3d id., motion,” 12(b)(1) did the Court but (citation Cir.2003) quo and internal summary judgment issue at the revisit the omitted). provided tation marks But that is not the though had stage, even Edmonson seeking. injury-in-fact. no further evidence an relief Edmonson is dispositive lege Thus, in an important injury-in-faet). But re- although just may same: the Edmonson attempted the cases are the have spect individ- ualize her by basing in Horvath plaintiff “concedefd] on the lost spread, injury her coverage “entirely specu- she received as mem- remains care best,” lative” “hypothetical employer’s] HMO was never and she [her ber accordingly lacks in- the “irreducible physician the existence constitu- affected tional minimum centives,” standing,” which is “an 333 F.3d at Edmonson ef- ... injury fact that is actual or immi- fectively every- concedes that she received nent, conjectural hypothetical.” thing to entitled under which she was her Drutis, 499 F.3d at 611 (quoting Lujan v. employer’s See Edmon- plan. husband’s 555, 560, Wildlife, son, F.Supp.2d (noting at 875 that Defenders of (1992)) 112 S.Ct. 119 L.Ed.2d 351 agreed argument Edmonson at oral (internal omitted).3 quotation marks she received both “claimed bene- fit, $10,000.00[,] in the amount plus Majority correctly observes that shortly interest” check after $138.08 “[o]ur decision in Horvath did not revolve decided to she close her SecureLine Ac- around plaintiff whether suffered a count). Moreover, has adduced 416.) (Majority financial loss.” Op. at It that, if paid no evidence she had been a did, however, question turn through sum lump rather than a retained whether plaintiff had demonstrated an account, she have asset would invested her i.e., loss, individual injury actual generated death benefit and the same that particular plaintiff. That showing is “spread” she now profit seeks to required plaintiff seeking when a indi merely reclaim from Lincoln. She has vidual relief under ERISA. See In re benefit, greater had Lin- hypothesized Unisys Litig., Sav. Plan administered in a different coln (3d Cir.1999) plaintiff that a (holding seek ought than it did. way That not be individual relief under ERISA enough. Emps. See Kendall v. Ret. Plan 502(a)(3), 502(a)(2), to contrast (2d Prods., Avon 561 F.3d 119 which behalf plan, allows relief on of a is Cir.2009) (finding plan par- that an ERISA loss). required prove to an individual Yet ticipant’s opportunity higher lost to receive conclude, Majority appears the as one an injury-in- benefits did not constitute has, other court Horvath requires that fact); Co., McNally Drutis v. Rand & 499 only plaintiff that an ERISA demonstrate (6th Cir.2007) (holding that she, plan, that than the “per rather plaintiffs damage who claimed based on sonally alleged the affected breach.” they would received if “what have Central Sw. Areas the[ir] States Se. & Health & [employer’s] plan were re-formed to meet Managed Fund Merck-Medco Welfare (2d Care, L.L.C., requirements of ERISA” failed to al- Cir. allegedly is also the that the United mine what amount funds That conclusion should putative District Court Southern be reclaimed and the States for the District the Plaintiffs class”); (noting New York reached Faber v. Metro. id. "Plaintiffs that do not—(cid:127) Life Co., 10588(HB), cannot—deny they No. 2009 WL and have received the Ins. (S.D.N.Y. 2009), aff'd, they Oct. full to which 648 F.3d 98 amount of benefits were Cir.2011), entitled”). disgorge- on identical facts. See id. at *5 Edmonson’s (noting pool similarly particular ment not a that "this funds to which is based on her, claim entitlement is not 'identifi amount of interest due but rather on [Plaintiffs] rather, quantifiable;' identify profit an and unidentified amount investment able any quantify allegedly relief for the Plain earned while her Se- measure of require accounting possession. its tiffs would an to deter- cureLine assets were in 2005) a plan “individual the term defined benefit implies, Horvath’s (interpreting for unduly That lax a to no more than her requirement). participant loss” entitles injury- effectively employee, upon mulation eliminates as benefit defined. “[T]he any virtually in-fact as requirement, retirement, entitled to a fixed periodic fiduciary to a can be duty plan breach of Hughes Co. v. payment.” Jacob Aircraft partici a “personally plan affect” son, said to 432, 439, S.Ct. on itself. pant through impact (citation (1999) L.Ed.2d 881 internal omitted). result, quotation marks As a meaning Majority believes typically employer “the bears the entire “a to be that either has Horvath any investment risk ... must cover individual right profit, [and] to the underfunding result of shortfall constitutional plaintiff has suffered may plan’s occur from the invest an indi- injury,” plaintiff or else the “has But, “[s]ince ments.” Id. a decline in the profit” right vidual defendant’s plan’s value assets does not alter injury-in-fact. (Major- she suffered an benefits, accrued 417.) similarly members have however, That, ity Op. presup- plan’s in a no entitlement share sur only two poses possibilities that there are 440, 119 ...” plus. Id. at when of ERISA a breach however, is, pos- There third alleged. case, In this defined amount indi- sibility: nor the neither which Edmonson was entitled was profit. vidual is entitled to the defendant’s $10,000 death fixed entitlement benefit—a plan per- That case when a would be the place that remained in after her Secure- fiduciary to retain and invest mitted the established, Line Account was even if Lin- benefit, payment funds of a pending the money investing coln had lost funds amount plaintiff and the received fixed backing Having no that account. claim on entitled, argued to which she was as is profits, cannot claim an she individual case, be the case here. And such “personally loss—or even that she was af- neither the can nor individual fected”—by receiving a share of those rightly allege injury-in-fact based profits. judicial power And “the limits on not having something received to which imposed by against Article III per- counsel entitled, regardless neither was of whether mitting participants or beneficiaries who duty.4 the defendant breached its injury suing have suffered no in fact from words, any right profit other to enforce ERISA duties on be- assets, loss of generated with Harley, half the Plan.” 284 F.3d at 906. said an injury-in-fact, which is now to be automatically Notwithstanding does follow the al- requirements not breach, III, at leged least not in a defined Article that imposing worried type requirement benefit at issue here. loss would mean that fiducia- Cf. Co., Harley Mfg. v. Minn. & ill-gotten profit Min. ries could “retain ... so (8th Cir.2002) (discussing long fiduciary duty F.3d 905-06 as the breaches of do inquiry harm “proper standing (Major- focus” of the or beneficiaries” 415), in an “to ity Op. Majority action seek relief ... at an [a] treats particular duty, given unique disgorgement breach of action for as sui generis. says of a As ERISA plan”). Majority plaintiff features defined benefit The that an relief,” i.e., infra, remedy propriate remedy 4. As equitable discussed for a fiducia- ry 502(a)(3). in such is not dam- breach circumstances provided § under ERISA ages, ap- injunction rather but or "other Leuthner, seeking disgorgement profits ing.” to which 125. The in- only she claims entitlement need plead quiry into statutory standing requires a that has been a breach there and that the court to determine Congress “whether plan itself is not entitled to recover. But injured accorded plaintiff this the right to quite plainly our decision Horvath states sue the defendant injury.” redress [her] fiduciary duty that a breach is sufficient to Inc., Graden v. Sys. Conexant standing only confer on an plaintiff (3d Cir.2007) (emphasis in origi- regard injunctive “with relief.” 333 nal). 502(a)(3)(B), § Under ERISA “[a] F.3d at 456. That is not the relief that may civil action brought be ... a par- so, seeking, per Edmonson is our own ticipant, beneficiary, ... binding precedent, she does not have con- (i) obtain ... appropriate equitable relief standing stitutional to press her claim.5 (ii) to redress such violations or to enforce any provisions standing, subchapter addition constitutional or the ERISA, bring civil action under terms plan.” “[t]o 29 U.S.C. 1132(a)(3).6 ... plaintiff statutory Thus, must have stand- “the statute author- Horvath, Relying reasoning our disgorgement.” on seek Id. at 102. The Court standing Second Circuit has come to the same concluded "[plaintiff] need not demon- closely resembling conclusion in two cases strate standing actual harm in order to have First, Employees this one. in Kendall v. Re- injunctive to seek requiring [defen- relief Products, tirement Plan Avon 561 F.3d 112 satisfy statutorily-created dant] ... fidu- Cir.2009), plan participant an ERISA took ciary responsibilities,” "[obtaining but that provision partially issue with a offset disgorgement restitution or under ERISA re- security payments against plan social benefits quires plaintiff satisfy that a the strictures of penalized based on formula that certain standing by demonstrating constitutional in- plaintiff injury retirees. The claimed on the loss; wit, they dividual have suffered grounds pre- that "the Offset under the Plan (alterations injury-in-fact.” and em- benefits,” realizing higher vents her from id. phasis original) (quoting citing Hor- argued employer that her could vath, 456-57) (internal quotation 333 F.3d at adjust spread either the formula to it more omitted). only marks reason that the evenly altogether, eliminate offset id. at Faber Court did not dismiss the action based plain- 119 n. 14. The Court observed that the standing plaintiff was that that was seek- tiff "concedes that her future benefits under a ing injunctive against relief the insurer as modified Plan that conforms to ERISA are (agreeing well. See id. at 103 with the dis- "claim, yet determined” and held that her trict court "insofar as it concluded that Faber that she would receive more in benefits were injunctive has constitutional to seek the Offset to be eliminated or the Plan modi- relief”). Again, that is not the relief that ERISA, injuiy-in- fied to conform to is not an Edmonson seeks in this case. fact.” Id. at 122. The Court also noted that [plaintiff] “the best offers the court is a calcu- analysis statutory standing, In its hypothetical lation of how a participant Plan only District Court focused on whether Ed- injured” by provision would be the offset "beneficiary” monson awas within the mean- plan. provid- Id. Edmonson has not even 502(a)(3) of ERISA when she com- hypothetical ed such a calculation of her lost lawsuit, given menced this that her claim "spread.” already paid been in full. The Court conclud- Second, Metropolitan in Faber v. Insur- Life was, “plaintiff's ed that Co., she [is] status Cir.2011), ance 648 F.3d 98 as in this case, fiduciary measured at the time the breach of plan beneficiary complained an ERISA occurred, rather than the time of the paid that her benefit had been in the form of Edmonson, appeal.” F.Supp.2d at 777 882 retained asset account rather than in a lump (citing Corp., sum. Daniels v. Thomas & Betts 263 The Court noted that "[i]n the context, 66, (3d Cir.2001)). ERISA we have F.3d 78 drawn a distinction The Court did not standing statutory standing between constitutional to seek in- consider whether she lacks junctive standing relief and constitutional to based on the relief that she seeks. 434 relief[,] legal equitable ing from defendant’s breach [and]

izes appropriate (citation courts, 210, in fashion- duty.” that 122 S.Ct. expect should at 708 [w]e relief, keep omitted). equitable will internal marks It appropriate quotation purpose of special that, in mind nature and in concluded cases which “[i]n respect employee plans, and will benefit right to plaintiff could not assert title or inclusion policy reflected in the choices property, but in possession particular and the exclusion of of certain remedies to might nevertheless he be able which Howe, v. 516 U.S. Varity Corp. others.” just grounds recovering money show 1065, 489, 515, L.Ed.2d 130 134 116 S.Ct. benefit the defendant had pay some (1996) original) (quoting Pilot (emphasis him, right plaintiff received from ” Dedeaux, 41, 54, 481 U.S. Ins. Co. v. 213, Life restitution law... Id. at 122 at (in- (1987)) 1549, 107 95 L.Ed.2d 39 S.Ct. (internal quotation 708 marks omit- S.Ct. omitted); quotation marks see also ternal ted). contrast, By “for restitution to lie 497, (noting at 1065 Con- id. 116 S.Ct. equity, generally the action must seek not system that gress’s “desire not create personal liability on defen- impose costs, or so that complex is administrative dant, plaintiff particu- but restore to the discourage em- litigation unduly expenses, lar funds or in the property defendant’s offering plans ployers from welfare benefit 214, possession.” Id. at 122 S.Ct. 708. in the place”). first “disgorgement” The Edmonson seeks is statutory standing The for Ed problem nothing compensation more than Horvath, that, monson as we said in is alleged alleged loss caused allegedly disgorgement “claims for restitution fiduciary duty. In oth breach 502(a)(3) likely [under ] ERISA are barred words, it precisely type er of relief by the Court’s ... decision in Supreme legal, Great-West said was Life Annuity Insurance Great-West & [Life Majority’s equitable. The discussion of Knudson, 204, 122 v. 534 S.Ct. Co. U.S. disgorgement support its conclusion 708, (2002) Horvath, ].” L.Ed.2d that Edmonson has constitutional Life, n. 3. In at 457 Great-West Majority says makes clear. The pointed the Court out that ERISA purpose disgorge an action seeking 502(a)(3) relief, only equitable provides ment, context, at in the ERISA is “to least 708, 209-10, see 534 at S.Ct. engaging deter the in dis then that whether relief for an said conduct him loyal by denying profits cognizable breach is 416), at (Majority Op. his breach” and that equitable under that section “de relief liable for he any profits “is pends plaintiffs] on the basis for [the trust,” through has made his breach {id. underlying the nature of the (internal quotation at 416 n. 5 marks omit sought,” remedies id. 122 S.Ct. 708 ted)). case, If that then is the it is difficult Co., (quoting v. Cont’l Reich Cas. Cir.1994)) (internal to see how Edmonson’s claim for “dis (7th quotation at omitted). gorgement” anything other than an marks Court noted that tempt personal liability on the “impose invariably seeking ... suits “[a]lmost defendant,” (whether Life, 534 U.S. at Great-West or dec by judgment, injunction, laration) for “the S.Ct. defendant’s compel defendant legal duty,” id. plaintiff sum of suits breach money to are all marks of ‘money certainly 708. That damages,’ as that has tradi phrase tionally they legal seek relief is unavailable applied, been since no 502(a)(3). more than a loss result- Mertens Hewitt As- compensation for See

435 socs., 248, 255, 2063, 124 508 U.S. 113 S.Ct. equitable remedy, but rather whether the (1993) they 161 (“Although L.Ed.2d often plaintiffs have demonstrated that their word, petitioners dance around the what claims for relief requirements meet the for nothing compensatory seek is other than applying type of remedy.”).8 Entitle- damages—monetary relief for all losses ment to a turn, constructive in trust re- [they] sustained as a alleged result of the (i) quires that “the defendant has been Money breach of duties. dam (ii) unjustly enriched by acquiring legal are, course, ages the classic form of specifically title to property identifiable legal (emphasis original)). relief.” (iii) at the expense of the claimant or in ” violation of the rights.... claimant’s in an Re- Perhaps prob- effort the avoid that (Third) statement lem, of Restitution Majority recasts Un- disgorgement as (2011). just § Enrichment Thus, an cmt. “accounting profits” for for purposes of statutory “[constructive trust is the standing, principal so that it de- falls within vice for vindicating exception equitable an ownership Great-West bar on Life’s 502(a)(3) against conflicting legal actions that seek to title....” impose Id. This personal liability presents case exactly opposite on a defendant. See situa- Here, Life, legal tion. passed Great-West 534 U.S. at 214 n. title to Edmon- (recognizing S.Ct. 708 son when exception “limited Lincoln established her Secure- for an accounting profits, for a form Line Account. Lincoln legal had no title restitution”).7 equitable funds, There are two to the nor was Edmonson left with a First, problems with that rhetorical equitable claim, shift. mere during period accounting an only proper when “a which she contends that she is entitled to plaintiff is entitled to a constructive trust spread. excess So this case does not on particular property held present the defen- circumstances which a plain- dant, may he profits [so that] also recover tiff would be remedy entitled to the of a produced by the defendant’s use of that constructive trust or an accounting for the Id.; property.” see Unisys also re profits on that Unisys, trust. See Corp. Retiree Med. Litig., (concluding plaintiffs Benefits (3d Cir.2009) (“[T]he 502(a)(3) could not recover under where question here is not disgorgement whether requirements for an accounting for profits met).9 or accounting profits profits is an were recognized 7.We equitable Supreme explicitly restitution 8. The Court characterized claim under ERISA in accounting profits, Plucinski v. I.A.M. Na requiring entitle- Fund, trust, tional Pension 875 F.2d 1052 Cir. ment to a constructive as a "limited 1989), holding equitable exception” that “there is an to what it concluded was ERISA’s by employers recovery types cause of action bar on for the to seek certain of resti- tutionary erroneously paid pension Life, contributions relief. Great-West 534 U.S. at funds due to a fact n. S.Ct. 708. I mistake of or law.” Id. at therefore fail to see However, ability how we Edmonson’s to assert a construc- characterized restitution equitable securing tive trust over the remedy only as an her Secure- to the extent that claim, "goes Line Account plan sponsor to the merits of her had made an "honest mis statutory standing,” Majority as the con- recovery specific take” and limited its to the 11.) (Majority Op. tends. at 420 n. erroneously paid pension amount into the equita fund. Id. at 1058. But we held that ble restitution does not Majority include an award of 9. The cites Skretvedt v. E.I. DuPont Nemours, (3d Cir.2004) interest on that amount for the time it was De 372 F.3d 193 is, held the fund. proposition Id. at 1058 n. 6. disgorgement That that "[t]he rem- essence, remedy edy equitable though that Edmonson seeks in long- even no assets, this case. possession er ha[d] of the retained 51(4) something than all relief.” § Re- must mean less

Second, to the according Mertens, 8, Restitution, the at 258 n. 113 S.Ct. purpose 508 U.S. & statement (internal omitted). an restitutionary remedy accounting quotation marks the wrongdoing profit “eliminate is to to limit the “Respecting Congress’s choice im- possible, the avoiding, 502(a)(3) so far while ‘equi- § to relief under available Thus, profit “[t]he a penalty.” position recognize us the requires table to relief is liable the wrongdoer the for which legal equitable difference between 51(4) increase in § is net rule of the petitioners forms of restitution. [When] extent that this wrongdoer, to the former, au- is not only seek the their suit underlying to the increase is attributable 502(a)(3).’” by § thorized Great-West case, In this § 51 e. wrong.” cmt. Life, 708. Be- 534 U.S. not) (or may may have that Lincoln profit cause under what seeks is Edmonson’s generated attributable reality in “disgorgement” label a funds from decision not withdraw damages only claim and is the relief when she could her SeeureLine Account seeks, statutory she she lacks both stand- acknowledges Majority have. The itself standing. and constitutional (“This (See at 423 in- Majority Op. that. my in respect colleagues With all wholly ... potential profit! ] creased summary Majority, I would vacate the ”).) dependent on Edmonson’s actions.... judgment for Lincoln remand to the accounting for an There is thus no basis District with instructions to dismiss Court exception limited that profits, complaint, based Edmonson’s lack recognized Court the Great-West Life standing.10 compensation rule general that its legal duty is unavailable under breach of 502(a)(3) apply does not to Ed-

ERISA claim.

monson’s explained, in Supreme

As the Court has arising context of claims 502(a)(3), “[ejquitable relief making Majority's a claim for a constructive trust unnec- merits decision is at odds 419-20.) essary.” (Majority Op. In that and statu- conclusions as to her constitutional case, beneficiary equi- had we held that a tory standing. standing re- Constitutional during period table claim for interest quires, injury-in-fact, addition to “a delayed, payment aof benefit was see Skret- injury and causal connection between the vedt, contrary 372 F.3d at conclusion complained injury conduct of—the be Plucinski, supra we reached see note 7. fairly challenged tracefable] ... action equitable was limited to the But that defendant, and not result th[e] [of] ... period during plan wrongly re- which the independent par- action third of some funds, i.e., legal period tained title to the ty....” Lujan Wildlife, Defenders of during of a requirements which the construc- 112 S.Ct. 119 L.Ed.2d Skretvedt, trust were See tive satisfied. (citation (alterations (1992) original) (analogizing F.3d at 209 the claimed interest omitted). quotation and internal marks "prejudgment interest” on claim that had ability Majority concludes that Lincoln’s Thus, already adjudicated). been we did not generate using backing profit the funds her disgorgement equi- hold in Skretvedtthat is an "wholly dependent Account was SeeureLine remedy longer table where the defendant no actions,” i.e., decision on Edmonson's her funds, legal beneficiary's title to the as in as the to withdraw all of funds as soon case. established, and that "is account Although to result in breach of Lincoln’s I insufficient would not reach merits of 423.) (Majority Op. at appeal, me duties.” Edmonson's it strikes America,

UNITED STATES

Plaintiff-Appellee, LESPIER,

James Ernest Defendant-

Appellant.

No. 12-4266. Appeals,

United States Court of

Fourth Circuit.

Argued: May Aug.

Decided: suggests That injury underlying Edmonson's claimed wrong.” able to the Restatement inaction, "fairly traceable" to her own major- of Restitution 51 cmt. e. Because payment rather than to Lincoln’s of her death ity concludes that Lincoln has not breached Account, using benefit a SecureLine and that fiduciary duty, “underlying there is no plead purposes she has failed to causation for wrong” subject that can be the aof restitu- standing. of Article III tionary remedy. That further undercuts the Similarly, Majority’s statutory in order to claim conclusion that claim for stand- dis- ing exception gorgement really equitable based on Great-West an Life’s accounting profits, accounting, suggests Edmonson must that she lacks stand- 502(a)(3). profits demonstrate that those are “attribut- under ERISA

Case Details

Case Name: Connie Edmonson v. Lincoln National Life Insuranc

Court Name: Court of Appeals for the Third Circuit

Date Published: Aug 7, 2013

Citation: 725 F.3d 406

Docket Number: 12-1581

Court Abbreviation: 3rd Cir.