Reprinted with permission from Roger Baron
Today, in CGI v. Rose, the 9th Circuit aligned itself with the 3rd Circuit’s ruling in US Airways v. McCutchen. This decision is monumental in that allows the district court to consider traditional equitable considerations in adjudicating a claim for ERISA reimbursement. The opinion states,
The Circuits have split on whether strict adherence to the terms of an ERISA plan that disclaims the application of traditional equitable defenses constitutes “appropriate equitable relief.” Several circuits, and notably the Eleventh, Eighth, Seventh and Fifth Circuits, have stressed the primacy of an ERISA plan’s express language, and have decided that in balancing the equities, simple contract interpretation that provides for full reimbursement per the plain terms of a plan that disclaims the application of traditional equitable defenses such as the make-whole doctrine and the common fund doctrine, constitutes “appropriate equitable relief” under § 502(a)(3).
. . . .
We agree with the Third Circuit that under § 502(a)(3), the district court, in granting “appropriate equitable relief,” may consider traditional equitable defenses notwithstanding express terms disclaiming their application. [US Airways v.McCutchen, 663 F.3d 671, 679 (3rd Cir. 2011)] Id. at 679 (stating that in equity, “contractual language was not as sacrosanct as it is normally considered to be when applying breach of contract principles at common law . . . [, and] equitable principles can apply even where no one has committed a wrong”). While a weighing of the equities, including the consideration of equitable defenses, might support that full reimbursement per the Plan’s terms is “appropriate equitable relief,” like the Third Circuit we disagree with the other circuits to the extent that they have held that § 502(a)(3) categorically excludes the application of traditional equitable defenses where the plan disclaims their application and requires reimbursement as set by the plan. Id. at 678.
The court’s opinion is authored by Circuit Judge Gould. Circuit Judge Schroeder filed a concurring opinion. Chief District Judge Beistline of Alaska, sitting on the Court of Appeals by designation, filed a dissenting opinion.
To view the opinion click HERE
