High Court Hears Oral Arguments In ERISA Plan Documents Case

WASHINGTON, D.C. -- The U.S. Supreme Court on Nov. 30 considered whether a showing of "likely harm" was sufficient to entitle participants in or beneficiaries of an employee benefits plan governed by the Employee Retirement Income Security Act to recover benefits based on an alleged inconsistency between the explanation of benefits in the summary plan description (SPD) or similar disclosure and the terms of the plan itself (CIGNA Corporation, et al. v. Janice C. Amara, et al., No. 09-804, U.S. Sup.).

Theodore B. Olson of Gibson, Dunn & Crutcher in Washington urged the Supreme Court to overrule an Oct. 6, 2009, Second Circuit U.S. Court of Appeals ruling regarding remedies for violations of ERISA's notice and disclosure provisions in connection with CIGNA Corp.'s transition from a defined benefit pension plan to a cash balance pension plan.

Olson argued that an action seeking a remedy for harm caused by a defective SPD must be brought under ERISA Section 502(a)(3) for equitable remedies, not under ERISA Section 502(a)(1)(B) for plan benefits, because the SPD "is not a part of the plan."  Justice Elena Kagan disagreed, saying that the SPD and the written instrument "together . . . constitute the plan."  Olson responded that because the plan did not specify that it could be amended by the SPD, the SPD was separate from, and could not modify, the plan.

Olson went on to argue that the instant case was similar to an estoppel action and that "[a]n essential element of an estoppel action is detrimental reliance on the adverse party's misrepresentation."  Justices Anthony M. Kennedy and Antonin Scalia asked whether all or a majority of the 27,000 participants and beneficiaries had to demonstrate detrimental reliance. 

Representing the participants, Stephen R. Bruce of Law Offices of Stephen R. Bruce in Washington argued that ERISA did not require a showing of detrimental reliance.  Bruce contended "that the unfavorable provisions in the plan were not disclosed, and that the effect of the statute is to make those unfavorable plan provisions ineffective."

Appearing as amicus curiae in support of the participants, Deputy Solicitor General Edwin S. Kneedler of the U.S. Department of Justice in Washington said the instant case was a contract case, noting that "in this case the district court found that the SPD basically promised, represented to employees, that after the conversion they would receive pension benefits in the form of A plus B, the old benefits plus the new benefits, accruing right away."

Justice Samuel Anthony Alito Jr. said that "[i]f this is a contract case, then where does the 'likely harm' standard come from?  If I'm owed something under a contract, I am entitled to get that under the contract. I don't need to show that I was likely harmed by, that I relied in any - in any way on anything."  Justice Stephen G. Breyer inquired "[o]ne, why should a document written by a different person, the fiduciary, govern over the actual plan?  Second, what happens when you have a favorable conflict, what happens when you have an unfavorable conflict, what happens when you have a neutral conflict?"

Justice Sonia Sotomayor took no part in the consideration or decision of the petitions and did not participate in the oral argument.

[Editor's Note:  Full coverage will be in the December issue of Mealey's Litigation Report: ERISA.  In the meantime, the transcript is available at or by calling the Customer Support Department at 1-800-833-9844.  Document #54-101216-001X.  For all of your legal news needs, please visit] 

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