In the brief filed on May 31, Solis asked for a rehearing and reversal of an appellate panel’s ruling that a “surcharge” is not an available remedy under Section 502(a)(3) of the Employee Retirement Income Security Act (ERISA). She explained how the appellate panel relied on the Supreme Court’s decisions in Mertens v. Hewitt Assocs. and Great-West Life & Annuity Ins. Co. v. Knudson, and concluded that section 502(a)(3) of ERISA does not allow the court to surcharge Metropolitan Life Ins. Co (MetLife) for the life insurance proceeds that Debbie McCravy would have received from MetLife but for its alleged fiduciary breaches.
However, on the same day that the panel issued its decision, the Supreme Court decided CIGNA Corp. v. Amara, Solis pointed out. “Contrary to the panel’s decision holding that surcharge is unavailable, the Supreme Court’s decision in CIGNA states that surcharge is an available remedy under section 502(a)(3). The CIGNA opinion explains that surcharge, or monetary compensation by a fiduciary for loss resulting from the fiduciary’s breach of duty, was a ‘traditional equitable remedy’ and thus falls within the ‘category of traditionally equitable relief’.”
“As CIGNA now makes clear, appropriate equitable relief under ERISA Section 502(a)(3) includes relief that makes injured participants and beneficiaries whole and thus permits the court to surcharge MetLife for the insurance proceeds that McCravy would have received but for the alleged breaches of fiduciary duty.”
Solis asked for a reversal of a lower court’s ruling when the case first came to the U.S. Court of Appeals for the Fourth Circuit (see “Solis Files Brief in Support of ‘Surcharge’ for Fiduciary Breaches”).
The full text of the brief is at http://www.dol.gov/sol/media/briefs/mccravy%28A%29-5-31-2011.pdf