As noted below, on February 20, the U.S. Supreme Court clarified a remedy issue under ERISA. Employees can sue under ERISA Section 502(a)(2) for fiduciary breaches that impair the value of assets in a 401(k) account. Last week, the Supreme Court signaled that it may now address the issue of what constitutes “equitable relief” under ERISA Section 502(a)(3). The case under consideration is Amschwand v. Spherion Corp., 505 F.3d 342 (5th Cir. 2007).
Mrs. Amschwand was denied benefits after her husband’s employer negligently accepted Mr. Amschwand’s premiums, told him that he was enrolled and fully eligible, but failed to give him the papers that actually would have made him eligible under the plan. Mrs. Amschwand sued for “equitable relief” under ERISA Section 502(a)(3) seeking monetary damages equal to the life insurance benefits that would have been paid if her husband submitted the papers he should have received. For its part, the company refunded the premiums but argued that Mrs. Amschwand could not collect money damages because Section 502(a)(3) allows only “equitable relief” not money damages. The 5th Circuit Court of Appeals agreed with the company and held that the damages requested, equal to the policy amount, was “legal” and not “equitable” relief. The opinion from the 5th Circuit is available here.
The Supreme Court addressed the meaning of “equitable relief” under Section 502(a)(3) back in 2002 in Great-West Life & Annuity Insurance Co. v. Knudson, 534 U.S. 204 (2002), but the circuits have split on issues surrounding how that case should be interpreted. The Supreme Court has invited the Solicitor General to submit briefs in the Amschwand case, which is an indication that the Supreme Court might accept review.
