Friday, December 15, 2006

Fourth Circuit on Relationship Between ERISA Sections 502(a)(1)(B) and 502(a)(3)

Scales_13 Every so often as a professor you actually draft an examination which mirrors issues that are going on in the "real world."  Imagine that.  Case in point: Korotynska v. Metropolitan Life Insurance, 05-1613 (4th Cir., Dec. 13, 2006).
One of the questions that we spent a lot of time on in employee benefits this past semester was the meaning of "appropriate" within the phrase "appropriate equitable relief" under Section 502(a)(3).  Specifically, Varity v. Howe (U.S. 1996), permits individual participants to sue fiduciaries under 502(a)(3) for breaching their fiduciary duties by failing to inform participants, or misleading them, about important changes in the plan.  However, there is language in Varity which suggests that such equitable relief under the 502(a)(3) "catch-all provision" is only available if a participant does not have an adequate remedy under one of the more specific provisions under 502(a).

Apparently, the Fourth Circuit in Korotynska was following this language in Varity when it found that since the plaintiff had an adequate claim for denial of benefits under 502(a)(1)(B), relief under 502(a)(3) for breach of fiduciary duty was not appropriate.

This reading of ERISA almost certainly provides less relief to any plaintiff and one has to ask whether providing ERISA plaintiffs less relief in circumstances like these is consistent with the underlying primary purpose of the statute, which is to protect employees' rightful benefits.

Hat Tip:  Ross Runkel

PS

https://lawprofessors.typepad.com/laborprof_blog/2006/12/fourth_circuit_.html

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» The Fourth Circuit on Equitable Relief and Varity v. Howe from Boston ERISA Law Blog
Here is a neat post about a decision last week out of the Fourth Circuit concerning when equitable relief can be pursued by a plan participant. Supreme Court precedent already narrowly cabins that type of a claim, and the Fourth... [Read More]

Tracked on Dec 18, 2006 10:38:29 AM

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