Thanks to Mark DeBofsky for bringing to my attention a potentially game-changing ERISA legal remedies case, Rochow v. Life Insurance Co. of North America (6th Cir. Dec. 6, 2013).
Without seeking to lay out the byzantine world of ERISA remedial law, the important question in the case is whether a plaintiff can maintain both a Section 502(a)(1)(B) claim for benefits and Section 502(a)(3) claim for breach of fiduciary at the same time. If so, the question remains whether disgorgement of profits is cognizable remedy under Section 502(a)(3) against the insurance company for failure to pay the benefits on a timely basis.
It seems like this is the important holding by the 2-1 majority: “[W]e hold that disgorgement is an appropriate equitable remedy under § 502(a)(3) and can provide a separate remedy on top of a benefit recovery.” This is a welcome development for ERISA plaintiffs and their attorneys, as ERISA’s remedial scheme has been narrowly construed over the years to prevent plaintiffs from receiving full recovery for their losses.
The debate going forward is whether the Supreme Court’s Varity case allows this outcome. Read more »