Equitable Relief under Section 502(a)(3)

Last week, in Sereboff v. Mid Atlantic Medical Services, Inc., http://www.supremecourtus.gov/opinions/05pdf/05-260.pdf, the Supreme Court returned to the question of what particular relief sought by a fiduciary can properly be pursued under the equitable relief provisions of Section 502(a)(3)(B) of ERISA, which provides that:

A fiduciary may bring a civil action under 502(a)(3) of ERISA "(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 (ii) to enforce any provisions of this subchapter or the terms of the plan."

502(a)(3)(B) is understood, under Supreme Court precedent, to only allow fiduciaries to pursue equitable relief, spawning a class of litigation over the issue of what particular relief sought by a plan or other fiduciary should be deemed to be "equitable" for these purposes. In Sereboff, the Court returned to the specific question of when can the plan obtain reimbursement from beneficiaries who had collected a third party tort recovery. In the case before the Court, the beneficiaries had collected health benefits from the plan and thereafter obtained a tort settlement from those who had caused the injuries that required the health care in question; the plan contained an

"Acts of Third Parties" provision [, which] requires a beneficiary who is injured as a result of an act or omission of a third party to reimburse [the plan] for benefits it pays on account of those injuries, if the beneficiary recovers for those injuries from the third party.

The Court concluded that this issue is not decided by simplistic characterizations of the recovery, such as should it be characterized as restitution, a recovery normally understood at least in casual legal thought as equitable, or instead as compensatory damages, but instead by analyzing the history of equitable relief under Supreme Court precedent and determining whether, on that long history, the relief in question would qualify as equitable.