The Sixth Circuit Vindicates the Fourth and Eleventh re: ERISA
Monday, March 16, 2015

The Sixth Circuit came to its senses and confirmed 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.   


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