What Rochow Teaches Us About Amara Remedies, and What It Doesn't

You know, I have been wanting to sit down for weeks – at least – to write about Rochow v. Life Insurance Company of America, initially with regard to the extraordinary remedy initially imposed by the court and then later with regard to the Sixth Circuit’s decision to return to the issue by hearing the case en banc, but I just plain haven’t had the time to write in detail on something that raises so many issues. Beyond that, I am not convinced that the problems raised by Rochow, and the issues it requires observers to consider, are well-suited to the form of a blog post, as there is simply a lot of ground to cover to be able to talk intelligently about the case. This latter problem, though, was solved for me by Alston & Bird’s Elizabeth Wilson Vaughan, who somehow summed up the entire history of the case and the issues it places in play in one simultaneously concise yet in-depth treatment, which you can find here. I highly recommend it to anyone who wants to understand the case, and what the hoo-ha is about, in advance of the en banc return to the issues by the Sixth Circuit.

I have long been on record with the view that the Amara addition of equitable remedies fills in a glaring hole in ERISA, and particularly with regard to ERISA remedies, by, if not solving, at least significantly reducing the problem in ERISA litigation of “harms without a remedy.” We all know those cases, in which a plaintiff makes a compelling presentation of harm, but the remedial structure does not provide for a clear right of recovery; most typically, benefits aren’t due in light of the circumstances at play, and thus a denial of benefits by the administrator was correct and must be upheld, but other issues – most typically a problem in communications with the participant – led to financial losses. We all know, as well, that many judges reluctantly accept that this occurs in ERISA litigation, and rule accordingly, although often expressing unhappiness about doing so – if not in their opinions, then in comments from the bench during hearings. The Amara equitable remedies framework provided a structure for resolving the most meritorious of those claims, by allowing equitable remedies such as estoppel and surcharge to fill in that hole.

The original Rochow disgorgement ruling – widely perceived, including by me, as excessive – falls outside of this framework, by going far beyond simply the proper use of Amara remedies to fix that problem, and is flawed for this reason alone. I have little doubt that the Sixth Circuit will fix this in its next opinion in the case. But for now, it is important, I think, to remember that this is an outlier decision, one that should not be seen as demonstrating some type of inherent flaw in the Amara equitable remedies rubric which, properly used and confined by judicial development of case law to the purpose of solving the “harms without a remedy” problem, is instead a valid and appropriate judicial interpretation of ERISA’s grant of equitable relief. Rochow, in the end, is best thought of, in its rulings to date, as the McDonald’s coffee cup case of ERISA remedies: an example of the need for judicial control over remedies, but not an indictment of the idea of having them.
 

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