"Lies"1 My Opposing Counsel Told Me about Amara: The Perspective of a Defense Attorney
Having read Michelle Roberts's perspective, I deny that I have told her any lies about Amara! (Nor has she lied to me, at least so far as I know.) I do respectfully disagree with my esteemed colleague on a number of points, however.
In one significant way, at least, the Supreme Court has limited equitable remedies under ERISA. It made clear that, under ERISA § 502(a)(1)(B), equitable relief in the nature of estoppel/detrimental reliance is not available--that section allows only for the enforcement of the plan as written. This is significant because the Court also ruled that documents such as a summary of material modifications (SMM) or a summary plan description (SPD) are not plan documents and do not have the same dignity as an ERISA plan itself. The Court noted that the district court below had erred in awarding equitable relief under a reliance theory under that section because the plaintiffs were receiving, or were entitled to receive, benefits under the plan document as it was written. The Court ended this part of its analysis by stating that because the "summary documents . . . do not themselves constitute the terms of the plan for purposes of [Section] § 502(a)(1)(B) [;] [w]e also conclude that the District Court could not find authority in that section to reform CIGNA's plan as written." 131 S. Ct. at 1878. This is a very favorable holding for plan drafters concerned about differences as between plan language and the language in SMMs and SPDs, and makes clear that plan language always controls over language in these summary documents, at least in matters of plan interpretation.
Perhaps narrowing its prior ruling in Mertens, the Court went on to hold that monetary equitable relief, based, e.g., on the written communications of a plan fiduciary, is available under ERISA § 502(a)(3)--that some forms of monetary relief, such as 'surcharges', are available against a plan fiduciary. The Court stated that "insofar as an award of make-whole relief is concerned, the fact that the defendant in this case, unlike the defendant in Mertens, is analogous to a trustee makes a critical difference." 131 S. Ct. at 1880.
Finally reaching the issue on which the Court had granted review, the level of proof required for participants to obtain relief under ERISA for disclosure violations in the SMM and SPD documents, the Court observed that in equity, proof of detrimental reliance was not always necessary to obtain relief, although it did constitute an element in certain equitable theories such as promissory estoppel. And, while under other equitable theories, detrimental reliance need not be proven, nevertheless, a showing of "actual harm" rather than "likely harm" will be required to prevail under § 502(a)(3). The Court did not stray from the preponderance of the evidence standard, but this is in any event the default standard of proof in civil cases.) My belief is that although the Court observed that reliance will not be required in all cases, it will be required as a practical matter in most because detrimental reliance will be subsumed within the universal requirement cases that each participant must show "harm and causation." More often than not, the actual harm, if provable, will have been caused by reliance on a misrepresentation. And, if there is no actual harm, which will equate in many cases to no reasonable reliance, the plaintiff will and should obtain no relief. (In fact, a very recent Ninth Circuit case, Skinner v. Northrop Grumman Retirement Plan B, 2012 U.S.App.LEXIS 5517 (March 16, 2012), precisely so holds. In a pension case where the relevant SPDs were ambiguous about an "annuity equivalent offset" contained in the plan itself, but where the plaintiffs had been provided, pre-retirement, with benefit calculations that correctly applied that offset, and had understood the offset, the Court found no equitable bases for applying theories of mistake, fraud, surcharge, or unjust enrichment, and rejected plaintiffs' assertion of "actual harm" because they had not in fact relied on the ambiguous SPDs.)
I do agree with Ms. Roberts, however, that, in general, the Amara opinion provides plaintiffs with more than is taken away from them, but I hope that I am not "bitten"2 by Ms. Roberts or other plaintiffs' counsel as Amara is applied by the lower courts in future cases.
1Editors' Note: We asked the authors to write on this topic and stipulated the article title. It does not imply that they think any opposing counsel has lied to them. It did, however, get you to read a footnote.
2See, final paragraph of Ms. Roberts's note in which she asserts that § 502(a)(3) "now has some teeth and the plaintiffs' attorneys will be biting."
C. Mark Humbert, Green & Humbert