Court calls for Solicitor General’s views on two ERISA petitions

By Kevin Russell
on Mar 11, 2010 at 9:14 pm

On Monday the Court called for the views of the Solicitor General on two petitions arising from the same ERISA case, Amara v. CIGNA Corp.  Both petitions raise questions regarding the proper remedy for misleading or inadequate disclosures relating to changes in a pension plan.

Background

In 1998, CIGNA changed its pension plan from a “defined benefit” plan (called “Plan A”) to a “cash balance” plan (called “Plan B”).  As required by ERISA, CIGNA gave notice to its employees.  A trial court subsequently found that the disclosures were inadequate and, in some respects, misleading, in violation of the statute.  In particular, the court found that although the change could have the effect of lowering the level of benefits for some employees, CIGNA represented that the changes would maintain or improve benefit levels.

In a remedial order, the district court ordered CIGNA to recalculate all of the workers’ benefits using a so-called “A+B” approach, under which the workers would receive all of their Part A benefits previously accrued plus additional benefits under Part B as they accrued.  The court declined to order CIGNA to reinstate Part A in full, and it declined the plaintiffs’ request for additional restitution for past due payments.

The Second Circuit summarily affirmed.

The Petitions

Both parties petitioned for certiorari.  In No. 09-804, CIGNA has asked the Court to decide whether the district court was allowed to order class-wide relief without requiring any individualized showing that particular plaintiffs relied upon or were prejudiced by the disclosure violations.  CIGNA argues that the courts of appeals are divided three ways over the question.  Six circuits, it says, require a showing of reliance or prejudice; three hold that no such showing is required; and the Second Circuit requires the district court to find that there was “likely harm” caused by the violation.  CIGNA further argues that the decision below was wrong, allowing windfalls to employees who were not in fact harmed by disclosure violations and thereby discouraging employers from offering benefit plans in the first place.

In No. 09-784, the employees have petitioned to challenge the district court’s refusal to expand relief further to require CIGNA to revert to its original Plan A and to order restitution.  The question of the scope of the district court’s remedial authority in ERISA cases, they argue, is already before the Court in Conkright v. Frommert, No. 08-810, which was argued in January.  As a result, the employees ask the Court to hold their petition until Conkright is decided, for a possible remand in light of that decision.

The CVSG

On Monday the Court asked the Solicitor General to weigh in on both petitions.  The Court’s decision to ask for the SG’s views on the employees’ petition – which simply asks for a hold – is a little unusual.  It may indicate that some on the Court wonder whether the petition warrants plenary review.  But it may just as well be that because the Court decided to ask for the SG’s view on CIGNA’s petition (which is not particularly surprising) it concluded that it was worth including both petitions in the invitation (particularly since CIGNA has argued that the issues in this case and Conkright are sufficiently distinct that a hold is unwarranted).  (Justice Sotomayor took no part in the consideration of either petition.)

There is no due date for a response, but the SG likely will attempt to file her brief in time for the Court to rule on the petitions before the end of the term.