NELA Amicus Briefs

On July 21, 2014, NELA and AARP submitted an amicus curiae brief in Gabriel v. Alaska Electrical Pension Fund, No. 12-35458, pending in the U.S. Court of Appeals for the Ninth Circuit, in support of plaintiff Gregory R. Gabriel’s petition for rehearing en banc. This case involves whether remedies under the Employee Retirement Income Security Act (ERISA) are available when a pension plan represents that a plan participant is eligible for benefits, pays those benefits for several years, and thereafter discontinues them. The Ninth Circuit panel opinion, authored by Judge Sandra S. Ikuta and joined by Chief Judge Alex Kozinski, limited the scope of equitable remedies, creating a split with every other circuit court that has reviewed this issue, as Judge Marsha L. Berzon noted in her dissenting opinion.

Plaintiff-Appellant Gregory R. Gabriel received eleven years of service credit from Defendant-Appellee Alaska Electric Pension Fund, which vested him under its pension plan. Gabriel was advised that he would receive monthly pension benefits of $1,236. He subsequently retired and began receiving benefits. Several years later, the Fund terminated the benefits, and threatened to seek reimbursement for the benefits paid, because it determined that Gabriel should have received credit for only eight instead of eleven years, and thus was ineligible to participate in the pension plan. Gabriel filed suit, alleging breach of fiduciary duty, misrepresentation, and estoppel.

The district court rejected Gabriel's claims for equitable relief based on breach of fiduciary duty because the requested compensatory damages were not equitable and he failed to establish fraud. On appeal, the Ninth Circuit panel majority affirmed the district court judgment in its entirety, finding that Gabriel could not demonstrate entitlement to an equitable remedy of surcharge under Section 502(a)(3) of ERISA. The dissent contended that the majority opinion disregarded the Supreme Court's guidance in CIGNA Corp. v. Amara, 131 S. Ct. 1866 (2011), and conflicted with decisions of the Fourth, Fifth, and Seventh Circuits.

NELA and AARP argued in the amicus brief that ERISA was designed to provide remedies for plan participants and beneficiaries who are harmed by breaches of fiduciary duty and the Ninth Circuit panel majority incorrectly limited those remedies. In particular, the panel majority erred by holding that surcharge includes only unjust enrichment and losses to the trust estate, which conflicts with Amara, and three other courts of appeals that have considered the scope of the surcharge remedy under Section 502(a)(3). These courts recognized, post Amara, that surcharge is appropriate to support an award of equitable monetary relief where a participant or beneficiary of an employee benefit plan is harmed by a fiduciary breach without requiring unjust enrichment to the fiduciary or loss to the trust estate. The panel majority also narrowed the availability of reformation as an equitable remedy under Section 502(a)(3), in conflict with Amara as well the Ninth Circuit decision in Mathews v. Chevron Corp., 362 F.3d 1172 (9th Cir. 2004). If the panel majority opinion stands, plan participants and beneficiaries will be deprived of meaningful relief in what is unfortunately an all too common situation.

NELA and AARP’s excellent amicus brief was drafted by NELA members Lindsay Nako, Catha Worthman and Julie Wilensky of Lewis Feinberg Lee Renaker & Jackson, P.C. and Mary Ellen Signorille of AARP Foundation Litigation.