The Sixth Circuit Vindicates the Fourth and Eleventh.
The en banc Sixth Circuit reaffirmed what the Fourth
and Eleventh Circuits knew all along.
Ever since Cigna v.Amara, 131 S. Ct. 1866 (2011), in which the United States
Supreme Court provided fresh theories (e.g.,
surcharge) of equitable relief under ERISA § 502(a)(3), some members of the plaintiff’s
bar found a renewed interest in tagging on a claim for equitable relief when seeking
employee benefits under ERISA § 502(a)(1)(B).
Defendants were quick to say “whoa” - Amara
did not change the long-standing rule under Varity
Corp. v. Howe, 516 U.S. 489, 116 S. Ct. 1065 (1996) that a claimant seeking
benefits under ERISA § 502(a)(1)(B) had an adequate avenue of relief available,
making a claim for equitable relief under ERISA § 502(a)(3) duplicative and
therefore not appropriate.
In the district courts of the Fourth
and Eleventh Circuit, defendants consistently won this battle when seeking to dismiss
ERISA § 502(a)(3) claims added to a straight-forward benefits case, the most recent ones being Beckham v. Liberty Life Assurance Co. of Boston, 4 F. Supp. 3d 1266
(M.D. Ala. 2014); Caudle v. LINA, 33
F. Supp. 3d 1288 (N.D. Ala. 2014); Benson v. LINA, 2014 WL 4769601 (E.D.N.C
2014); Esposito v. Wal-Mart, 2014 WL
4104731 (W.D.N.C. 2014); Campbell v. Rite
Aid Corp., 2014 WL 3868008 (D.S.C. 2014); Leach v. Aetna, 2014 WL 470064 (D. Md. 2014); Jenkins v. Grant Thorton, 2014 WL 860547 (S.D. Fla. 2014).
However, as part of that battle, defendants
often were required to address Rochow v. LINA, 737 F. 3d 415 (6th Cir. 2013), a Sixth Circuit outlier showing up in
the claimants’ opposition briefs. Rochow involved the quintessential benefit
case; the plaintiff sought employee benefits under ERISA § 502(a)(1)(B), and
added an ERISA § 502(a)(3) claim. Plaintiff
argued that two injuries were involved:
(1) the denial of benefits; and (2) the withholding of the benefits
during the length of time it took for plaintiff to have the denial reversed. Under the plaintiff’s theory of surcharge, the
recovery of the plan fiduciary’s “unjust enrichment” of profits was calculated
at a far greater amount than any conceivable pre-judgment interest rate. The District Court agreed with the plaintiff,
using Amara as its authority. Rochow, 851 F. Supp. 2d 1090 (E.D. Mich. 2012).
The Sixth Circuit Court of Appeals affirmed in December of 2013, but in February
of 2014, the defendant’s motion for rehearing en banc was granted, leaving the decision vacated in the
meantime. Then we waited.
Over one year later, the majority
vacated the panel’s earlier decision, relying upon the authority that seemed
clear under Varity and its progeny
that the plaintiff’s claim for benefits was adequate relief, making the ERISA §
502(a)(3) claim duplicative and inappropriate:
“Despite Rochow’s creative use of semantics, the reality remains clear-
Rochow suffered one injury, the denial of his benefits.” Rochow,-- F. 3d -- , 2015 WL 925794 (6th Cir. March 5, 2015). The majority also
found that pre-judgment interest could be awarded, but not at a rate so high as
to be punitive. Id.
The decision was not unanimous,
with concurring and dissenting opinions flowing forth. Nevertheless, the Sixth Circuit majority’s
solid reliance on Varity told us what
we already knew in the Fourth and Eleventh, and removed any doubt.
