CIGNA Corp. v. Amara

CIGNA Corp. v. Amara

Opinion

 [*424]  Justice Breyer delivered the opinion of the Court.

In 1998, petitioner CIGNA Corporation changed the nature of its basic pension plan for employees. Previously, the plan provided a retiring employee with a defined benefit in the form of an annuity calculated on the basis of his preretirement salary and length of service. The new plan provided most retiring employees with a (lump sum) cash balance calculated on the basis of a defined annual contribution from CIGNA as increased by compound interest. Because many employees had already earned at least some old-plan benefits, the new plan translated already-earned benefits into an opening amount in the employee's cash  [****8] balance account.

Respondents, acting on behalf of approximately 25,000 beneficiaries of the CIGNA Pension Plan (which is also a petitioner here), challenged CIGNA's adoption of the new plan. They claimed in part that CIGNA had failed to give them proper notice of changes to their benefits, particularly because the new plan in certain respects provided them with less generous benefits. See Employee Retirement Income Security Act of 1974 (ERISA) §§ 102(a), 104(b), 204(h), 88 Stat. 841,  [*425]  848, 862, as amended, 29 U.S.C. §§ 1022(a), 1024(b), 1054(h).

The District Court agreed that the  [***848] disclosures made by CIGNA violated its obligations [**1871]  under ERISA. In determining relief, the court found that CIGNA's notice failures had caused the employees “likely harm.” The Court then reformed the new plan and ordered CIGNA to pay benefits accordingly. It found legal authority for doing so in ERISA § 502(a)(1)(B), 29 U.S.C. § 1132(a)(1)(B) (authorizing a plan “participant or beneficiary” to bring a “civil action” to “recover benefits due to him under the terms of his plan”).

We agreed to decide whether the District Court applied the correct legal standard, namely, a “likely harm” standard, in determining that  [****9] CIGNA's notice violations caused its employees sufficient injury to warrant legal relief. To reach that question, we must first consider a more general matter--whether the ERISA section just mentioned (ERISA's recovery-of-benefits-due provision, § 502(a)(1)(B)) authorizes entry of the relief the District Court provided. We conclude that it does not authorize this relief. Nonetheless, we find that a different equity-related ERISA provision, to which the District Court also referred, authorizes forms of relief similar to those that the court entered. § 502(a)(3), 29 U.S.C. § 1132(a)(3).

Full case includes Shepard's, Headnotes, Legal Analytics from Lex Machina, and more.