ERISA Civil Actions
ERISA Civil Causes of Action
ERISA contains a comprehensive scheme of civil causes of action for claims that relate to ERISA plans. These causes of action may be found in ERISA Section 502.
Claims for Information
Under ERISA Section 502(a)(1)(A), a participant or beneficiary may bring an action against a plan administrator (within the meaning of ERISA Section 3(16)(A)) for failure to supply request information, including:
- a failure to provide a COBRA notice;
- a failure to provide notice of a transfer of excess pension assets to a health plan;
- a failure to provide a multiemployer plan funding notice; and
- a failure to mail any information which an administrator must furnish on request within 30 days of the request.
The plan administrator may, in the court's discretion, be held personally liable to the participant for up to $100 a day from the date of such failure or refusal. Each violation with respect to any single participant is treated as a separate violation.
Any ERISA Section 502(a)(1)(A) claim is most likely to be successful where the plan administrator acted in bad faith.
Claims for Benefits
Under ERISA Section 502(a)(1)(B), a participant or beneficiary may bring an action to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan.
See Litigation of Claims for Benefits for more information.
Exhaustion of Remedies
Plaintiffs generally must exhaust their admininstrative remedies before they can sue under Section 502(a)(1)(B). See ERISA Claims Procedure.
Generally, only participants and beneficiaries have standing to sue under 502(a)(1). In some cases, other parties may able to sue if they would have been participants but for a fiduciary's wrongdoing or have a colorable claim for benefits.
A key point in any claim for benefits that has been denied is likely to be whether the decision was within the discretion of the administrator. If a plan contains so-called Firestone language, which grants discretion to the administrator to interpret the plan's terms, the decision will be reviewed under an abuse of discretion standard that heavily favors the administrator.
See Firestone language.
Claims For Breach of Fiduciary Duty
A participant, beneficiary, fiduciary, or the DOL may sue under ERISA Section 502(a)(2) for appropriate relief under ERISA Section 409, which deals with breach of fiduciary duty.
A claim under ERISA Section 502(a)(2) must allege an injury to the plan. In a claim involving a defined benefit plan, the plaintiff must seek to recover for the whole plan. (As a practical matter, this means that a 502(a)(2) claim against a DB plan must typically be a class action.)
In the recent case of LaRue v. DeWolff, the Supreme Court held that an individual plaintiff may sue fiduciaries of a defined contribution plan under Section 502(a)(2) for his or her individual losses. It remains to be seen how this will be applied by lower courts.
Claims For Equitable Relief
Under ERISA Section 502(a)(3), a participant, beneficiary, or fiduciary may bring a claim for equitable relief for any act or practice that violates ERISA or the terms of a plan. As Sereboff v. Mid Atlantic Medical Services and other cases have held, equitable relief means remedies enforceable by a court of equity in the days of the divided bench. Money damages cannot be sought under 502(a)(3), although specific funds may be recovered.
ERISA Section 502(a)(3) is also used to enforce ERISA's anti-discrimination provisions. See ERISA Section 510.
Claims For Failure to Provide Pension Benefit Statements
Under ERISA Section 502(a)(4), the DOL, a participant, or a beneficiary may bring an action for appropriate relief in the case of a violation of ERISA 105(c), which provides for individual benefit states to participants in retirement plans.
Claims by the DOL for Equitable Relief
Subject to the restrictions of ERISA Section 502(b), under ERISA Section 502(a)(5) the DOL may bring an action to enjoin any action that violates ERISA or to obtain other appropriate equitable relief to redress or enforce any ERISA provision.
Claims by the DOL for Civil Penalties
The DOL may bring an action to collect any civil penalty under ERISA Sections 502(c)(2), (4), (5), (6), (7) or (8), or ERISA Sections 502(i) and 502(l).
Claims by a State to Enforce a QMCSO
Under ERISA Section 502(a)(7), a State may bring an action to enforce compliance with a QMCSO.
Claims for Failure to Provide DB Plan Funding Notice
Under ERISA Section 502(a)(8), the DOL, an employer, or any other person referred to in ERISA Section 101(f) (e.g., unions, PBGC) may bring an action to enjoin any act or practice which violates ERISA 101(f) (which deals with multiemployer defined benefit plan funding notices), or to seek appropriate equitable relief to redress the violation or enforce Section 101(f).
Claims for Annuity Benefits
Under ERISA Section 502(a)(9), the DOL, a fiduciary, or any individual who was a participant or beneficiary at the time of the alleged violation, may seek relief for the purchase of an insurance contract or insurance annuity for a participant's benefit distribution that is a violation of the plan's terms or a breach of fiduciary duty. Relief may include the posting of security to assure receipt by the participant or beneficiary of the amounts provided by the insurance contract or annuity, plus reasonable prejudgment interest.
Claims to Adopt or Enforce a Funding Improvement or Rehabilitation Plan
An employer or an employee organization (e.g., union) may bring suit under ERISA Section 502(a)(10) to force a multiemployer plan to adopt or enforce a Funding improvement plan or Rehabilitation plan.
Parties With Standing to Sue
Generally, each ERISA cause of action described above specifies the suitable plaintiffs.
Participants and Beneficaries
For purposes of these causes of action, "participant" and "beneficiary" is any person defined in ERISA Section 3(7) and 3(8):
(7) The term “participant” means any employee or former employee of an employer, or any member or former member of an employee organization, who is or may become eligible to receive a benefit of any type from an employee benefit plan which covers employees of such employer or members of such organization, or whose beneficiaries may be eligible to receive any such benefit.
(8) The term “beneficiary” means a person designated by a participant, or by the terms of an employee benefit plan, who is or may become entitled to a benefit thereunder.
There has been considerable controversy over whether a participant who has received a total distribution from a plan has standing to sue. The better rule is that such a person has standing to sue if he or she claims that his or her benefit would have been greater but for a wrong under ERISA.
A fiduciary is defined in ERISA Section 3(21). See ERISA fiduciary.
The term “State” includes any State of the United States, the District of Columbia, Puerto Rico, the Virgin Islands, American Samoa, Guam, Wake Island, and the Canal Zone.
Entities That May Be Sued
ERISA is a notable exception to the general American rule that parties bear their own attorneys' fees in a suit. Generally, courts have discretion to award fees to either party (even a losing party, in extraordinary circumstances) in an ERISA civil case. In awarding fees, courts generally consider:
- bad faith,
- ability to pay,
- deterrent effect,
- benefit of the suit on the plan as a whole, and
- relative merits of the positions.
An award of attorneys' fee is mandatory for a plan fiduciary who prevails against an employer for a delinquent contribution to a multiemployer plan.
See ERISA 502(g).
DOL and Treasury Intervention
ERISA Section 502(h) permits the DOL and the Treasury to intervene in any ERISA civil action filed by a private party. The Treasury may not, however, intervene in actions involving a breach of fiduciary duty.
Actions Against the DOL
ERISA Section 502(k) permits a plan administrator, fiduciary, participant, or beneficiary of an employee benefit plan to bring an action:
- to review a final order of the DOL,
- to restrain the DOL from taking any action contrary to the provisions of ERISA, or
- to compel the DOL to take action required under ERISA.
DOL Enforcement Programs
The DOL maintains a variety of ERISA Enforcement Programs.
ERISA preempts state law claims that relate to employee benefit plans, even if such claims
Federal Jurisdiction and Removal
All ERISA claims may be filed in federal court. Only claims under ERISA Section 502(a)(1)(B) (claims for benefits) may be filed in state court.
Because all ERISA claims involve federal substantive law, the defendant (with the consent of other defendants) may remove a claim in state court to federal court. This is true even if an ERISA claim does not appear on the face of the complaint, so long as the state law claims are completely preempted by ERISA. See ERISA Preemption.
Venue is proper in an ERISA action where:
- the plan is administered;
- where the breach or violation occurred; and
- where any defendant resides or may be found.
See ERISA Section 502(e)(2).
Generally, there is no right to a jury trial under ERISA. However, some authority indicates that DOL actions against a fiduciary seeking legal remedies (i.e., personal libiability for money damages) give right to a jury trial. See 2007 WL 4225069.
Statute of Limitations
For Breach of Fiduciary Duty
Claims for breach of fiduciary duty (including prohibited transactions) may not be commenced after the earlier of:
- six years after (A) the date of the last action which constituted a part of the breach or violation, or (B) in the case of an omission the latest date on which the fiduciary could have cured the breach or violation, or
- three years after the earliest date on which the plaintiff had actual knowledge of the breach or violation.
In the case of fraud or concealment, no action may be commenced not later than six years after the date of discovery of a breach or violation.
For Other Claims
For other claims (e.g., a claim for benefits), ERISA specifies no statute of limitations. Courts generally enforce the most analagous state statute of limitations. The limitations period usually begins when a claim is denied. Many plans shorten the period of limitations for benefits claims -- these provisions are enforceable if reasonable. (A two-year period, for example, has been almost universally upheld.)
Links to Selected Supreme Court Cases
- Firestone Tire and Rubber Co. v. Bruch
- Massachusetts Mutual Life Ins. Co. v. Russell
- Shaw v. Delta Air Lines
- Aetna Health Inc. v. Davila
- Metropolitan Life Ins. Co. v. Taylor
- Sereboff v. Mid Atlantic Medical Services
- LaRue v. DeWolff -- expands the permissible range of claims under ERISA Section 502(a)(2) to include suits for individual losses of benefits