Aaron Gearlds, Jr. filed a lawsuit alleging his employer Entergy Services negligently induced him to take early retirement insofar as it promised him health care benefits. A district court dismissed the complaint for failure to state a claim, reasoning that Gearlds sought only compensatory money damages, which was not an available equitable remedy under Employee Retirement Income Security Act (ERISA) § 502(a)(3). Gearlds sought as damages past and future medical expenses, interest, attorneys’ fees, costs, and any other damages, equitable or otherwise, to which he may be entitled.
However, the 5th Circuit noted that in CIGNA v. Amara, the Supreme Court recently stated an expansion of the kind of relief available under § 502(a)(3) when the plaintiff is suing a plan fiduciary and the relief sought makes the plaintiff whole for losses caused by the defendant’s breach of a fiduciary duty (see “Supreme Court Sends Back Cash Balance Notice Decision”).
The Supreme Court reasoned that a money remedy was not beyond the scope of traditional equitable relief because “[e]quity courts possessed the power to provide relief in the form of monetary ‘compensation’ for a loss resulting from a trustee’s breach of duty, or to prevent the trustee’s unjust enrichment.” The Supreme Court concluded that “an award of make-whole relief” in the form of surcharge was within the scope of “appropriate equitable relief” for purposes of § 502(a)(3).
The 5th Circuit also referenced in its decision McCravy v. Metropolitan Life Insurance Company, a similar case for which the 4th U.S. Circuit of Appeals ruled the plaintiff was not limited to recovering the premiums she had paid for medical insurance for her daughter (see “4th Circuit Uses High Court Decision to Allow for Surcharge”).
Gearlds case was remanded to the district court for further proceeding.The 5th Circuit’s opinion is here.