U.S. Supreme Court on ERISA Remedies

Cigna Corporation changed its pension plan back in 1998. Janice Amara, on behalf of herself and 25,000 beneficiaries sued under ERISA, claiming CIGNA's changes violated the law.  In particular, the plaintiffs challenged the notice of changes CIGNA provided.

The district court agreed CIGNA's notice provisions were improper, particularly in a newsletter that, the court found, painted too-rosy of a picture of the impending changes and ordered monetary relief based on the conclusion that the disclosures caused "likely harm." 
On review, the Supreme Court decided the district court's reasoning was wrong, but that it reached a nearly correct result.  The Court discussed the available remedies under ERISA.

The Court held that district court have broad discretion to fashion remedies as "equitable" relief.  Without a lot of legal mumbo jumbo, equitable remedies normally are injunctions, but there are some that include money.  In the CIGNA case, the district court had held that only those plaintiffs who "relied" on the erroneous information to their detriment could recover money.  The Supreme Court disagreed, saying that not all "equitable" remedies required a showing of reliance. .

A key take-away for non-ERISA people is that the courts here found that a newsletter previewing potentially detrimental changes to the plan was incomplete and misleading. So, HR practitioners, beware of informal communications regarding changes to your ERISA covered benefit plans.

The opinion is Cigna Corp. v. Amara and the opinion is here.

DGV