Fifth Circuit Opines On When Claims May Be Properly Maintained Under ERISA § 502(a)(1)(B) Versus § 502(a)(3)

The U.S. Court of Appeals for the Fifth Circuit recently addressed "the labyrinthine complexities of ERISA law and practice." Manuel v. Turner Industries Group, LLC, et al., No. 17-30835 (5th Cir. Oct. 1, 2018). In this wide-ranging opinion, the Fifth Circuit highlighted the importance of identifying the underlying purported injury to understand whether an ERISA § 502(a)(3) claim (a claim for equitable relief) is duplicative of a claim that could have been brought under ERISA § 502(a)(1)(B) (a claim to recover benefits or enforce a right under the terms of a plan), in which case it should be dismissed.

Background

Plaintiff was a former employee of defendant Turner Industries Group, LLC and a participant in the company's group employee short-term and long-term disability plan (the "Plan"), which was sponsored by the company and insured by Prudential Insurance Company of America. Plaintiff filed suit against defendants alleging a breach of fiduciary duty under § 502(a)(3) of ERISA after his claim for long term disability (LTD) benefits was denied and after the insurer sought repayment of the short-term disability (STD) benefits it had paid.

The district court dismissed plaintiff's claims on the grounds that the relief plaintiff sought should have been brought under § 502(a)(1)(B) of ERISA, which generally governs claims for benefits, as opposed to § 502(a)(3), which can only be invoked if the claim is not governed by a different portion of § 502(a).

Fifth Circuit Decision

Propriety of ERISA § 502(a)(1)(B) Claims versus ERISA § 502(a)(3) Claims

On appeal, plaintiff argued that his claims were brought under the correct ERISA provision. The Fifth Circuit began by highlighting that ERISA § 502(a)(1)(B), which provides that a civil action may be brought by a participant "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," has been construed by the Supreme Court narrowly, and that such claims are generally limited to actions respecting the interpretation of plan documents and payment of claims.

On the other hand, ERISA § 502(a)(3), which provides that a civil action may be brought "by a participant, beneficiary, or fiduciary (A) to enjoin any act or practice which violates any provision of this subchapter or the terms of the plan, or (B) to obtain other appropriate equitable relief (i) to redress such violations or...