CIGNA v. AMARA
Under the Employee Retirement Income Security Act (ERISA), plan administrators must provide all plan participants with a "summary plan description" (SPD), as well as a "summary of material modifications" when material changes are made to the plan. After CIGNA converted its traditional defined benefit pension plan to a cash balance plan, it issued a summary plan description to plan participants. In 2001, Janice Amara, one of the participants, filed a class- action lawsuit, claiming that CIGNA failed to comply with ERISA's notice requirements and SPD provisions. The U.S. District Court for the District Connecticut found for Amara, and the U.S. Court of Appeals for the Second Circuit affirmed, finding that the SPD misrepresented the terms of the plan itself.
Did the district court have authority under Section 502(a)(1)(B) of ERISA to reform CIGNA’s pension plan?
Legal provision: ERISA §502(a)(3)
No. The Supreme Court vacated and remanded the lower court order, finding that while the district court did not have authority under Section 502(a)(1)(B) of ERISA to reform CIGNA’s pension plan, it did have authority to do so under another provision, Section 502(a)(3). In a unanimous decision authored by Justice Stephen Breyer, the Court noted that "although §502(a)(1)(B) did not give the District Court authority to reform CIGNA's plan, relief is authorized by §502(a)(3), which allows a participant, beneficiary, or fiduciary 'to obtain other appropriate equitable relief' to redress violations of ERISA 'or the [plan's] terms.'" Justices Antonin Scalia and Clarence Thomas concurred only in the judgment. Meanwhile, Justice Sonia Sotomayor did not take part in consideration of the case.
Opinion of the Court
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SUPREME COURT OF THE UNITED STATES
CIGNA CORPORATION, ET AL., PETITIONERS v.
JANICE C. AMARA, ET AL., INDIVIDUALLY
AND ON BEHALF OF ALL OTHERS
ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF
APPEALS FOR THE SECOND CIRCUIT
[May 16, 2011]
JUSTICE BREYER delivered the opinion of the Court.
In 1998, petitioner CIGNA Corporation changed the nature of its basic pension plan for employees. Previously, the plan provided a retiring employee with a defined benefit in the form of an annuity calculated on the basis of his preretirement salary and length of service. The new plan provided most retiring employees with a (lump sum) cash balance calculated on the basis of a defined annual contribution from CIGNA as increased by compound interest. Because many employees had already earned at least some old-plan benefits, the new plan translated alreadyearned benefits into an opening amount in the employee’s cash balance account.
Respondents, acting on behalf of approximately 25,000 beneficiaries of the CIGNA Pension Plan (which is also a petitioner here), challenged CIGNA’s adoption of the new plan. They claimed in part that CIGNA had failed to give them proper notice of changes to their benefits, particularly because the new plan in certain respects provided them with less generous benefits. See Employee Retirement Income Security Act of 1974 (ERISA) §§102(a), 104(b), 204(h), 88 Stat. 841, 848, 862, as amended, 29 U. S. C. §§1022(a), 1024(b), 1054(h).
The District Court agreed that the disclosures made by CIGNA violated its obligations under ERISA. In determining relief, the court found that CIGNA’s notice failures had caused the employees “likely harm.” The Court then reformed the new plan and ordered CIGNA to pay benefits accordingly. It found legal authority for doing so in ERISA §502(a)(1)(B), 29 U. S. C. §1132(a)(1)(B) (authorizing a plan “participant or beneficiary” to bring a “civil action” to “recover benefits due to him under the terms of his plan”).
We agreed to decide whether the District Court applied the correct legal standard, namely, a “likely harm” standard, in determining that CIGNA’s notice violations caused its employees sufficient injury to warrant legal relief. To reach that question, we must first consider a more general matter—whether the ERISA section just mentioned (ERISA’s recovery-of-benefits-due provision, §502(a)(1)(B)) authorizes entry of the relief the District Court provided. We conclude that it does not authorize this relief. Nonetheless, we find that a different equityrelated ERISA provision, to which the District Court also referred, authorizes forms of relief similar to those that the court entered. §502(a)(3), 29 U. S. C. §1132(a)(3).
Section 502(a)(3) authorizes “appropriate equitable relief ” for violations of ERISA. Accordingly, the relevant standard of harm will depend upon the equitable theory by which the District Court provides relief. We leave it to the District Court to conduct that analysis in the first instance, but we identify equitable principles that the court might apply on remand. I
Because our decision rests in important part upon the circumstances present here, we shall describe those circumstances in some detail. We still simplify in doing so. But the interested reader can find a more thorough description in two District Court opinions, which set forth that court’s findings reached after a lengthy trial. See 559 F. Supp. 2d 192 (Conn. 2008); 534 F. Supp. 2d 288 (Conn. 2008).
Under CIGNA’s pre-1998 defined-benefit retirement plan, an employee with at least five years service would receive an annuity annually paying an amount that depended upon the employee’s salary and length of service. Depending on when the employee had joined CIGNA, the annuity would equal either (1) 2 percent of the employee’s average salary over his final three years with CIGNA, multiplied by the number of years worked (up to 30); or (2) 12⁄3 percent of the employee’s average salary over his final five years with CIGNA, multiplied by the number of years worked (up to 35). Calculated either way, the annuity would approach 60 percent of a longtime employee’s final salary. A well-paid longtime employee, earning, say, $160,000 per year, could receive a retirement annuity paying the employee about $96,000 per year until his death. The plan offered many employees at least one other benefit: They could retire early, at age 55, and receive an only-somewhat-reduced annuity.
In November 1997, CIGNA sent its employees a newsletter announcing that it intended to put in place a new pension plan. The new plan would substitute an “account balance plan” for CIGNA’s pre-existing defined-benefit system. App. 991a (emphasis deleted). The newsletter added that the old plan would end on December 31, 1997, that CIGNA would introduce (and describe) the new plan sometime during 1998, and that the new plan would apply retroactively to January 1, 1998.
Eleven months later CIGNA filled in the details. Its new plan created an individual retirement account for each employee. (The account consisted of a bookkeeping entry backed by a CIGNA-funded trust.) Each year CIGNA would contribute to the employee’s individual account an amount equal to between 3 percent and 8.5 percent of the employee’s salary, depending upon age, length of service, and certain other factors. The account balance would earn compound interest at a rate equal to the return on 5-year treasury bills plus one-quarter percent (but no less than 4.5 percent and no greater than 9 percent). Upon retirement the employee would receive the amount then in his or her individual account—in the form of either a lump sum or whatever annuity the lump sum then would buy. As promised, CIGNA would open the accounts and begin to make contributions as of January 1, 1998.
But what about the retirement benefits that employees had already earned prior to January 1, 1998? CIGNA promised to make an initial contribution to the individual’s account equal to the value of that employee’s already earned benefits. And the new plan set forth a method for calculating that initial contribution. The method consisted of calculating the amount as of the employee’s (future) retirement date of the annuity to which the employee’s salary and length of service already (i.e., as of December 31, 1997) entitled him and then discounting that sum to its present (i.e., January 1, 1998) value.
An example will help: Imagine an employee born on January 1, 1966, who joined CIGNA in January 1991 on his 25th birthday, and who (during the five years preceding the plan changeover) earned an average salary of $100,000 per year. As of January 1, 1998, the old plan would have entitled that employee to an annuity equal to $100,000 times 7 (years then worked) times 12⁄3 percent, or $11,667 per year—when he retired in 2031 at age 65. The 2031 price of an annuity paying $11,667 per year until death depends upon interest rates and mortality assumptions at that time. If we assume the annuity would pay 7 percent until the holder’s death (and we use the mortality assumptions used by the plan, see App. 407a (incorporating the mortality table prescribed by Rev. Rul. 95–6, 1995–1 Cum. Bull. 80)), then the 2031 price of such an annuity would be about $120,500. And CIGNA should initially deposit in this individual’s account on January 1, 1998, an amount that will grow to become $120,500, 33 years later, in 2031, when the individual retires. If we assume a 5 percent average interest rate, then that amount presently (i.e., as of January 1, 1998) equals about $24,000. And (with one further mortality-related adjustment that we shall describe infra, at 6–7) that is the amount, more or less, that the new plan’s transition rules would have required CIGNA initially to deposit. Then CIGNA would make further annual deposits, and all the deposited amounts would earn compound interest. When the employee retired, he would receive the resulting lump sum.
The new plan also provided employees a guarantee: An employee would receive upon retirement either (1) the amount to which he or she had become entitled as of January 1, 1998, or (2) the amount then in his or her individual account, whichever was greater. Thus, the employee in our example would receive (in 2031) no less than an annuity paying $11,667 per year for life.
The District Court found that CIGNA’s initial descriptions of its new plan were significantly incomplete and misled its employees. In November 1997, for example, CIGNA sent the employees a newsletter that said the new plan would “significantly enhance” its “retirement program,” would produce “an overall improvement in . . . retirement benefits,” and would provide “the same benefit security” with “steadier benefit growth.” App. 990a, 991a, 993a. CIGNA also told its employees that they would “see the growth in [their] total retirement benefits from CIGNA every year,” id., at 952a, that its initial deposit “represent[ed] the full value of the benefit [they] earned for service before 1998,” Record E–503 (Exh. 98), and that “[o]ne advantage the company will not get from the retirement program changes is cost savings.” App. 993a.
In fact, the new plan saved the company $10 million annually (though CIGNA later said it devoted the savings to other employee benefits). Its initial deposit did not “represen[t] the full value of the benefit” that employees had “earned for service before 1998.” And the plan made a significant number of employees worse off in at least the following specific ways:
First, the initial deposit calculation ignored the fact that the old plan offered many CIGNA employees the right to retire early (beginning at age 55) with only somewhat reduced benefits. This right was valuable. For example, as of January 1, 1998, respondent Janice Amara had earned vested age-55 retirement benefits of $1,833 per month, but CIGNA’s initial deposit in her new-plan individual retirement account (ignoring this benefit) would have allowed her at age 55 to buy an annuity benefit of only $900 per month.
Second, as we previously indicated but did not explain, supra at 5, the new plan adjusted CIGNA’s initial deposit downward to account for the fact that, unlike the old plan’s lifetime annuity, an employee’s survivors would receive the new plan’s benefits (namely, the amount in the employee’s individual account) even if the employee died before retiring. The downward adjustment consisted of multiplying the otherwise-required deposit by the probability that the employee would live until retirement—a 90 percent probability in the example of our 32-year-old, supra, at 4–5. And that meant that CIGNA’s initial deposit in our example—the amount that was supposed to grow to $120,500 by 2031—would be less than $22,000, not $24,000 (the number we computed). The employee, of course, would receive a benefit in return—namely, a form of life insurance. But at least some employees might have preferred the retirement benefit and consequently could reasonably have thought it important to know that the new plan traded away one-tenth of their already-earned benefits for a life insurance policy that they might not have wanted.
Third, the new plan shifted the risk of a fall in interest rates from CIGNA to its employees. Under the old plan, CIGNA had to buy a retiring employee an annuity that paid a specified sum irrespective of whether falling interest rates made it more expensive for CIGNA to pay for that annuity. And falling interest rates also meant that any sum CIGNA set aside to buy that annuity would grow more slowly over time, thereby requiring CIGNA to set aside more money to make any specific sum available at retirement. Under the new plan CIGNA did not have to buy a retiring employee an annuity that paid a specific sum. The employee would simply receive whatever sum his account contained. And falling interest rates meant that the account’s lump sum would earn less money each year after the employee retired. Annuities, for example, would become more expensive (any fixed purchase price paying for less annual income). At the same time falling interest meant that the individual account would grow more slowly over time, leaving the employee with less money at retirement.
Of course, interest rates might rise instead of fall, leaving CIGNA’s employees better off under the new plan. But the latter advantage does not cancel out the former disadvantage, for most individuals are risk averse. And that means that most of CIGNA’s employees would have preferred that CIGNA, rather than they, bear these risks.
The amounts likely involved are significant. If, in our example, interest rates between 1998 and 2031 averaged 4 percent rather than the 5 percent we assumed, and if in 2031 annuities paid 6 percent rather than the 7 percent we assumed, then CIGNA would have had to make an initial deposit of $35,500 (not $24,000) to assure that employee the $11,667 annual annuity payment to which he had already become entitled. Indeed, that $24,000 that CIGNA would have contributed (leaving aside the lifeinsurance problem) would have provided enough money to buy (in 2031) an annuity that assured the employee an annual payment of only about $8,000 (rather than $11,667).
We recognize that the employee in our example (like others) might have continued to work for CIGNA after January 1, 1998; and he would thereby eventually have earned a pension that, by the time of his retirement, was worth far more than $11,667. But that is so because CIGNA made an additional contribution for each year worked after January 1, 1998. If interest rates fell (as they did), it would take the employee several additional years of work simply to catch up (under the new plan) to where he had already been (under the old plan) as of January 1, 1998—a phenomenon known in pension jargon as “wear away,” see 534 F. Supp. 2d, at 303–304 (referring to respondents’ requiring 6 to 10 years to catch up).
The District Court found that CIGNA told its employees nothing about any of these features of the new plan— which individually and together made clear that CIGNA’s descriptions of the plan were incomplete and inaccurate. The District Court also found that CIGNA intentionally misled its employees. A focus group and many employees asked CIGNA, for example, to “ ‘[d]isclose details’ ” about the plan, to provide “ ‘individual comparisons,’ ” or to show “ ‘[a]n actual projection for retirement.’ ” Id., at 342. But CIGNA did not do so. Instead (in the words of one internal document), it “ ‘focus[ed] on NOT providing employees before and after samples of the Pension Plan changes.’ ” Id., at 343.
The District Court concluded, as a matter of law, that CIGNA’s representations (and omissions) about the plan, made between November 1997 (when it announced the plan) and December 1998 (when it put the plan into effect) violated:
(a) ERISA §204(h), implemented by Treas. Reg. §1.411(d)–6, 26 CFR §1.411(d)–6 (2000), which (as it existed at the relevant time) forbade an amendment of a pension plan that would “provide for a significant reduction in the rate of future benefit accrual” unless the plan administrator also sent a “written notice” that provided either the text of the amendment or summarized its likely effects, 29 U. S. C. §1054(h) (2000 ed.) (amended 2001); Treas. Reg. §1.411(d)–6, Q&A–10, 63 Fed. Reg. 68682 (1998); and
(b) ERISA §§102(a) and 104(b), which require a plan administrator to provide beneficiaries with summary plan descriptions and with summaries of material modifications, “written in a manner calculated to be understood by the average plan participant,” that are “sufficiently accurate and comprehensive to reasonably apprise such participants and beneficiaries of their rights and obligations under the plan,” 29 U. S. C. §§1022(a), 1024(b) (2006 ed. and Supp. III).
The District Court then turned to the remedy. First, the court agreed with CIGNA that only employees whom CIGNA’s disclosure failures had harmed could obtain relief. But it did not require each individual member of the relevant CIGNA employee class to show individual injury. Rather, it found (1) that the evidence presented had raised a presumption of “likely harm” suffered by the members of the relevant employee class, and (2) that CIGNA, though free to offer contrary evidence in respect to some or all of those employees, had failed to rebut that presumption. It concluded that this unrebutted showing was sufficient to warrant class-applicable relief.
Second, the court noted that §204(h) had been interpreted by the Second Circuit to permit the invalidation of plan amendments not preceded by a proper notice, prior to the 2001 amendment that made this power explicit. 559 F. Supp. 2d, at 207 (citing Frommert v. Conkright, 433 F. 3d 254, 263 (2006)); see 29 U. S. C. §1054(h)(6) (2006 ed.) (entitling participants to benefits “without regard to [the] amendment” in case of an “egregious failure”). But the court also thought that granting this relief here would harm, not help, the injured employees. That is because the notice failures all concerned the new plan that took effect in December 1998. The court thought that the notices in respect to the freezing of old-plan benefits, effective December 31, 1997, were valid. To strike the new plan while leaving in effect the frozen old plan would not help CIGNA’s employees.
The court considered treating the November 1997 notice as a sham or treating that notice and the later 1998 notices as part and parcel of a single set of related events. But it pointed out that respondents “ha[d] argued none of these things.” 559 F. Supp. 2d, at 208. And it said that the court would “not make these arguments now on [respondents’] behalf.” Ibid.
Third, the court reformed the terms of the new plan’s guarantee. It erased the portion that assured participants who retired the greater of “A” (that which they had already earned as of December 31, 1997, under the old plan, $11,667 in our example) or “B” (that which they would earn via CIGNA’s annual deposits under the new plan, including CIGNA’s initial deposit). And it substituted a provision that would guarantee each employee “A” (that which they had already earned, as of December 31, 1997, under the old plan) plus “B” (that which they would earn via CIGNA’s annual deposits under the new plan, excluding CIGNA’s initial deposit). In our example, the District Court’s remedy would no longer force our employee to choose upon retirement either an $11,667 annuity or his new plan benefits (including both CIGNA’s annual deposits and CIGNA’s initial deposit). It would give him an $11,667 annuity plus his new plan benefits (with CIGNA’s annual deposits but without CIGNA’s initial deposit).
Fourth, the court “order[ed] and enjoin[ed] the CIGNA Plan to reform its records to reflect that all class members . . . now receive [the just described] ‘A + B’ benefits,” and that it pay appropriate benefits to those class members who had already retired. Id., at 222.
Fifth, the court held that ERISA §502(a)(1)(B) provided the legal authority to enter this relief. That provision states that a “civil action may be brought” by a plan “participant or beneficiary . . . to recover benefits due to him under the terms of his plan.” 29 U. S. C. §1132(a)(1)(B). The court wrote that its orders in effect awarded “benefits under the terms of the plan” as reformed. 559 F. Supp. 2d, at 212.
At the same time the court considered whether ERISA §502(a)(3) also provided legal authority to enter this relief. That provision states 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 (ii) to enforce any provisions of this subchapter or the terms of the plan.” 29 U. S. C. §1132(a)(3) (emphasis added). The District Court decided not to answer this question because (1) it had just decided that the same relief was available under §502(a)(1)(B), regardless, cf. Varity Corp. v. Howe, 516 U. S. 489, 515 (1996); and (2) the Supreme Court has “issued several opinions . . . that have severely curtailed the kinds of relief that are available under §502(a)(3),” 559 F. Supp. 2d, at 205 (citing Sereboff v. Mid Atlantic Medical Services, Inc., 547 U. S. 356 (2006); Great-West Life & Annuity Ins. Co. v. Knudson, 534 U. S. 204 (2002); and Mertens v. Hewitt Associates, 508 U. S. 248 (1993)).
The parties cross-appealed the District Court’s judgment. The Court of Appeals for the Second Circuit issued a brief summary order, rejecting all their claims, and affirming “the judgment of the district court for substantially the reasons stated” in the District Court’s “wellreasoned and scholarly opinions.” 348 Fed. Appx. 627 (2009). The parties filed cross-petitions for writs of certiorari in this Court. We granted the request in CIGNA’s petition to consider whether a showing of “likely harm” is sufficient to entitle plan participants to recover benefits based on faulty disclosures.
CIGNA in the merits briefing raises a preliminary question. Brief for Petitioners 13–20. It argues first and foremost that the statutory provision upon which the District Court rested its orders, namely, the provision for recovery of plan benefits, §502(a)(1)(B), does not in fact authorize the District Court to enter the kind of relief it entered here. And for that reason, CIGNA argues, whether the District Court did or did not use a proper standard for determining harm is beside the point. We believe that this preliminary question is closely enough related to the question presented that we shall consider it at the outset.
The District Court ordered relief in two steps. Step 1: It ordered the terms of the plan reformed (so that they provided an “A plus B,” rather than a “greater of A or B” guarantee). Step 2: It ordered the plan administrator (which it found to be CIGNA) to enforce the plan as reformed. One can fairly describe step 2 as consistent with §502(a)(1)(B), for that provision grants a participant the right to bring a civil action to “recover benefits due . . . under the terms of his plan.” 29 U. S. C. §1132(a)(1)(B). And step 2 orders recovery of the benefits provided by the “terms of [the] plan” as reformed.
But what about step 1? Where does §502(a)(1)(B) grant a court the power to change the terms of the plan as they previously existed? The statutory language speaks of “enforc[ing] ” the “terms of the plan,” not of changing them. 29 U. S. C. §1132(a)(l)(B) (emphasis added). The provision allows a court to look outside the plan’s written language in deciding what those terms are, i.e., what the language means. See UNUM Life Ins. Co. of America v. Ward, 526 U. S. 358, 377–379 (1999) (permitting the insurance terms of an ERISA-governed plan to be interpreted in light of state insurance rules). But we have found nothing suggesting that the provision authorizes a court to alter those terms, at least not in present circumstances, where that change, akin to the reform of a contract, seems less like the simple enforcement of a contract as written and more like an equitable remedy. See infra, at 18.
Nor can we accept the Solicitor General’s alternative rationale seeking to justify the use of this provision. The Solicitor General says that the District Court did enforce the plan’s terms as written, adding that the “plan” includes the disclosures that constituted the summary plan descriptions. In other words, in the view of the Solicitor General, the terms of the summaries are terms of the plan.
Even if the District Court had viewed the summaries as plan “terms” (which it did not, see supra, at 10–11), however, we cannot agree that the terms of statutorily required plan summaries (or summaries of plan modifications) necessarily may be enforced (under §502(a)(1)(B)) as the terms of the plan itself. For one thing, it is difficult to square the Solicitor General’s reading of the statute with ERISA §102(a), the provision that obliges plan administrators to furnish summary plan descriptions. The syntax of that provision, requiring that participants and beneficiaries be advised of their rights and obligations “under the plan,” suggests that the information about the plan provided by those disclosures is not itself part of the plan. See 29 U. S. C. §1022(a). Nothing in §502(a)(1)(B) (or, as far as we can tell, anywhere else) suggests the contrary.
Nor do we find it easy to square the Solicitor General’s reading with the statute’s division of authority between a plan’s sponsor and the plan’s administrator. The plan’s sponsor (e.g., the employer), like a trust’s settlor, creates the basic terms and conditions of the plan, executes a written instrument containing those terms and conditions, and provides in that instrument “a procedure” for making amendments. §402, 29 U. S. C. §1102. The plan’s administrator, a trustee-like fiduciary, manages the plan, follows its terms in doing so, and provides participants with the summary documents that describe the plan (and modifications) in readily understandable form. §§3(21)(A), 101(a), 102, 104, 29 U. S. C. §§1002(21)(A), 1021(a), 1022, 1024 (2006 ed. and Supp. III). Here, the District Court found that the same entity, CIGNA, filled both roles. See 534 F. Supp. 2d, at 331. But that is not always the case. Regardless, we have found that ERISA carefully distinguishes these roles. See, e.g., Varity Corp., 516 U. S., at 498. And we have no reason to believe that the statute intends to mix the responsibilities by giving the administrator the power to set plan terms indirectly by including them in the summary plan descriptions. See CurtissWright Corp. v. Schoonejongen, 514 U. S. 73, 81–85 (1995).
Finally, we find it difficult to reconcile the Solicitor General’s interpretation with the basic summary plan description objective: clear, simple communication. See §§2(a), 102(a), 29 U. S. C. §1001(a), 1022(a) (2006 ed.). To make the language of a plan summary legally binding could well lead plan administrators to sacrifice simplicity and comprehensibility in order to describe plan terms in the language of lawyers. Consider the difference between a will and the summary of a will or between a property deed and its summary. Consider, too, the length of Part I of this opinion, and then consider how much longer Part I would have to be if we had to include all the qualifications and nuances that a plan drafter might have found important and feared to omit lest they lose all legal significance. The District Court’s opinions take up 109 pages of the Federal Supplement. None of this is to say that plan administrators can avoid providing complete and accurate summaries of plan terms in the manner required by ERISA and its implementing regulations. But we fear that the Solicitor General’s rule might bring about complexity that would defeat the fundamental purpose of the summaries.
For these reasons taken together we conclude that the summary documents, important as they are, provide communication with beneficiaries about the plan, but that their statements do not themselves constitute the terms of the plan for purposes of §502(a)(1)(B). We also conclude that the District Court could not find authority in that section to reform CIGNA’s plan as written. B
If §502(a)(1)(B) does not authorize entry of the relief here at issue, what about nearby §502(a)(3)? That provision allows a participant, beneficiary, or fiduciary “to obtain other appropriate equitable relief ” to redress violations of (here relevant) parts of ERISA “or the terms of the plan.” 29 U. S. C. §1132(a)(3) (emphasis added). The District Court strongly implied, but did not directly hold, that it would base its relief upon this subsection were it not for (1) the fact that the preceding “plan benefits due” provision, §502(a)(1)(B), provided sufficient authority; and (2) certain cases from this Court that narrowed the application of the term “appropriate equitable relief,” see, e.g., Mertens, 508 U. S. 248; Great-West, 534 U. S. 204. Our holding in Part II–A, supra, removes the District Court’s first obstacle. And given the likelihood that, on remand, the District Court will turn to and rely upon this alternative subsection, we consider the court’s second concern. We find that concern misplaced.
We have interpreted the term “appropriate equitable relief ” in §502(a)(3) as referring to “ ‘those categories of relief ’ ” that, traditionally speaking (i.e., prior to the merger of law and equity) “ ‘were typically available in equity.’ ” Sereboff, 547 U. S., at 361 (quoting Mertens, 508 U. S., at 256). In Mertens, we applied this principle to a claim seeking money damages brought by a beneficiary against a private firm that provided a trustee with actuarial services. We found that the plaintiff sought “nothing other than compensatory damages” against a nonfiduciary. Id., at 253, 255 (emphasis deleted). And we held that such a claim, traditionally speaking, was legal, not equitable, in nature. Id., at 255.
In Great-West, we considered a claim brought by a fiduciary against a tort-award-winning beneficiary seeking monetary reimbursement for medical outlays that the plan had previously made on the beneficiary’s behalf. We noted that the fiduciary sought to obtain a lien attaching to (or a constructive trust imposed upon) money that the beneficiary had received from the tort-case defendant. But we noted that the money in question was not the “particular” money that the tort defendant had paid. And, traditionally speaking, relief that sought a lien or a constructive trust was legal relief, not equitable relief, unless the funds in question were “particular funds or property in the defendant’s possession.” 534 U. S., at 213 (emphasis added).
The case before us concerns a suit by a beneficiary against a plan fiduciary (whom ERISA typically treats as a trustee) about the terms of a plan (which ERISA typically treats as a trust). See LaRue v. DeWolff, Boberg & Associates, Inc., 552 U. S. 248, 253, n. 4 (2008); Varity Corp., 516 U. S., at 496–497. It is the kind of lawsuit that, before the merger of law and equity, respondents could have brought only in a court of equity, not a court of law. 4 A. Scott, W. Fratcher, & M. Ascher, Trusts §24.1, p. 1654 (5th ed. 2007) (hereinafter Scott & Ascher) (“Trusts are, and always have been, the bailiwick of the courts of equity”); Duvall v. Craig, 2 Wheat. 45, 56 (1817) (a trustee was “only suable in equity”).
With the exception of the relief now provided by §502(a)(1)(B), Restatement (Second) of Trusts §§198(1)–(2) (1957) (hereinafter Second Restatement); 4 Scott & Ascher §24.2.1, the remedies available to those courts of equity were traditionally considered equitable remedies, see Second Restatement §199; J. Adams, Doctrine of Equity: A Commentary on the Law as Administered by the Court of Chancery 61 (7th Am. ed. 1881) (hereinafter Adams); 4 Scott & Ascher §24.2.
The District Court’s affirmative and negative injunctions obviously fall within this category. Mertens, supra, at 256 (identifying injunctions, mandamus, and restitution as equitable relief ). And other relief ordered by the District Court resembles forms of traditional equitable relief. That is because equity chancellors developed a host of other “distinctively equitable” remedies—remedies that were “fitted to the nature of the primary right” they were intended to protect. 1 S. Symons, Pomeroy’s Equity Jurisprudence §108, pp. 139–140 (5th ed. 1941) (hereinafter Pomeroy). See generally 1 J. Story, Commentaries on Equity Jurisprudence §692 (12th ed. 1877) (hereinafter Story). Indeed, a maxim of equity states that “[e]quity suffers not a right to be without a remedy.” R. Francis, Maxims of Equity 29 (1st Am. ed. 1823). And the relief entered here, insofar as it does not consist of injunctive relief, closely resembles three other traditional equitable remedies.
First, what the District Court did here may be regarded as the reformation of the terms of the plan, in order to remedy the false or misleading information CIGNA provided. The power to reform contracts (as contrasted with the power to enforce contracts as written) is a traditional power of an equity court, not a court of law, and was used to prevent fraud. See Baltzer v. Raleigh & Augusta R. Co., 115 U. S. 634, 645 (1885) (“[I]t is well settled that equity would reform the contract, and enforce it, as reformed, if the mistake or fraud were shown”); Hearne v. Marine Ins. Co., 20 Wall. 488, 490 (1874) (“The reformation of written contracts for fraud or mistake is an ordinary head of equity jurisdiction”); Bradford v. Union Bank of Tenn., 13 How. 57, 66 (1852); J. Eaton, Handbook of Equity Jurisprudence §306, p. 618 (1901) (hereinafter Eaton) (courts of common law could only void or enforce, but not reform, a contract); 4 Pomeroy §1375, at 1000 (reformation “chiefly occasioned by fraud or mistake,” which were themselves concerns of equity courts); 1 Story §§152–154; see also 4 Pomeroy §1375, at 999 (equity often considered reformation a “preparatory step” that “establishes the real contract”). Second, the District Court’s remedy essentially held CIGNA to what it had promised, namely, that the new plan would not take from its employees benefits they had already accrued. This aspect of the remedy resembles estoppel, a traditional equitable remedy. See, e.g., E. Merwin, Principles of Equity and Equity Pleading §910 (H. Merwin ed. 1895); 3 Pomeroy §804. Equitable estoppel “operates to place the person entitled to its benefit in the same position he would have been in had the representations been true.” Eaton §62, at 176. And, as Justice Story long ago pointed out, equitable estoppel “forms a very essential element in . . . fair dealing, and rebuke of all fraudulent misrepresentation, which it is the boast of courts of equity constantly to promote.” 2 Story §1533, at 776.
Third, the District Court injunctions require the plan administrator to pay to already retired beneficiaries money owed them under the plan as reformed. But the fact that this relief takes the form of a money payment does not remove it from the category of traditionally equitable relief. Equity courts possessed the power to provide relief in the form of monetary “compensation” for a loss resulting from a trustee’s breach of duty, or to prevent the trustee’s unjust enrichment. Restatement (Third) of Trusts §95, and Comment a (Tent. Draft No. 5, Mar. 2, 2009) (hereinafter Third Restatement); Eaton §§211–212, at 440. Indeed, prior to the merger of law and equity this kind of monetary remedy against a trustee, sometimes called a “surcharge,” was “exclusively equitable.” Princess Lida of Thurn and Taxis v. Thompson, 305 U. S. 456, 464 (1939); Third Restatement §95, and Comment a; G. Bogert & G. Bogert, Trusts and Trustees §862 (rev. 2d ed. 1995) (hereinafter Bogert); 4 Scott & Ascher §§24.2, 24.9, at 1659–1660, 1686; Second Restatement §197; see also Manhattan Bank of Memphis v. Walker, 130 U. S. 267, 271 (1889) (“The suit is plainly one of equitable cognizance, the bill being filed to charge the defendant, as a trustee, for a breach of trust”); 1 J. Perry, A Treatise on the Law of Trusts and Trustees §17, p. 13 (2d ed. 1874) (common-law attempts “to punish trustees for a breach of trust in damages, . . . w[ere] soon abandoned”).
The surcharge remedy extended to a breach of trust committed by a fiduciary encompassing any violation of a duty imposed upon that fiduciary. See Second Restatement §201; Adams 59; 4 Pomeroy §1079; 2 Story §§1261, 1268. Thus, insofar as an award of make-whole relief is concerned, the fact that the defendant in this case, unlike the defendant in Mertens, is analogous to a trustee makes a critical difference. See 508 U. S., at 262–263. In sum, contrary to the District Court’s fears, the types of remedies the court entered here fall within the scope of the term “appropriate equitable relief ” in §502(a)(3).
Section 502(a)(3) invokes the equitable powers of the District Court. We cannot know with certainty which remedy the District Court understood itself to be imposing, nor whether the District Court will find it appropriate to exercise its discretion under §502(a)(3) to impose that remedy on remand. We need not decide which remedies are appropriate on the facts of this case in order to resolve the parties’ dispute as to the appropriate legal standard in determining whether members of the relevant employee class were injured.
The relevant substantive provisions of ERISA do not set forth any particular standard for determining harm. They simply require the plan administrator to write and to distribute written notices that are “sufficiently accurate and comprehensive to reasonably apprise” plan participants and beneficiaries of “their rights and obligations under the plan.” §102(a); see also §§104(b), 204(h). Nor can we find a definite standard in the ERISA provision, §502(a)(3) (which authorizes the court to enter “appropriate equitable relief ” to redress ERISA “violations”). Hence any requirement of harm must come from the law of equity.
Looking to the law of equity, there is no general principle that “detrimental reliance” must be proved before a remedy is decreed. To the extent any such requirement arises, it is because the specific remedy being contemplated imposes such a requirement. Thus, as CIGNA points out, when equity courts used the remedy of estoppel, they insisted upon a showing akin to detrimental reliance, i.e., that the defendant’s statement “in truth, influenced the conduct of ” the plaintiff, causing “prejudic[e].” Eaton §61, at 175; see 3 Pomeroy §805. Accordingly, when a court exercises its authority under §502(a)(3) to impose a remedy equivalent to estoppel, a showing of detrimental reliance must be made.
But this showing is not always necessary for other equitable remedies. Equity courts, for example, would reform contracts to reflect the mutual understanding of the contracting parties where “fraudulent suppression[s], omission[s], or insertion[s],” 1 Story §154, at 149, “material[ly] . . . affect[ed]” the “substance” of the contract, even if the “complaining part[y]” was negligent in not realizing its mistake, as long as its negligence did not fall below a standard of “reasonable prudence” and violate a legal duty. 3 Pomeroy §§856, 856b, at 334, 340–341; see Baltzer, 115 U. S., at 645; Eaton §307(b).
Nor did equity courts insist upon a showing of detrimental reliance in cases where they ordered “surcharge.” Rather, they simply ordered a trust or beneficiary made whole following a trustee’s breach of trust. In such instances equity courts would “mold the relief to protect the rights of the beneficiary according to the situation involved.” Bogert §861, at 4. This flexible approach belies a strict requirement of “detrimental reliance.” To be sure, just as a court of equity would not surcharge a trustee for a nonexistent harm, 4 Scott & Ascher §24.9, a fiduciary can be surcharged under §502(a)(3) only upon a showing of actual harm—proved (under the default rule for civil cases) by a preponderance of the evidence. That actual harm may sometimes consist of detrimental reliance, but it might also come from the loss of a right protected by ERISA or its trust-law antecedents. In the present case, it is not difficult to imagine how the failure to provide proper summary information, in violation of the statute, injured employees even if they did not themselves act in reliance on summary documents—which they might not themselves have seen—for they may have thought fellow employees, or informal workplace discussion, would have let them know if, say, plan changes would likely prove harmful. We doubt that Congress would have wanted to bar those employees from relief.
The upshot is that we can agree with CIGNA only to a limited extent. We believe that, to obtain relief by surcharge for violations of §§102(a) and 104(b), a plan participant or beneficiary must show that the violation injured him or her. But to do so, he or she need only show harm and causation. Although it is not always necessary to meet the more rigorous standard implicit in the words “detrimental reliance,” actual harm must be shown.
We are not asked to reassess the evidence. And we are not asked about the other prerequisites for relief. We are asked about the standard of prejudice. And we conclude that the standard of prejudice must be borrowed from equitable principles, as modified by the obligations and injuries identified by ERISA itself. Information-related circumstances, violations, and injuries are potentially too various in nature to insist that harm must always meet that more vigorous “detrimental harm” standard when equity imposed no such strict requirement. IV
We have premised our discussion in Part III on the need for the District Court to revisit its determination of an appropriate remedy for the violations of ERISA it identified. Whether or not the general principles we have discussed above are properly applicable in this case is for it or the Court of Appeals to determine in the first instance. Because the District Court has not determined if an appropriate remedy may be imposed under §502(a)(3), we must vacate the judgment below and remand this case for further proceedings consistent with this opinion.
JUSTICE SOTOMAYOR took no part in the consideration or decision of this case. It is so ordered.
SCALIA, J., concurring in judgment
SUPREME COURT OF THE UNITED STATES
CIGNA CORPORATION, ET AL., PETITIONERS v.
JANICE C. AMARA, ET AL., INDIVIDUALLY
AND ON BEHALF OF ALL OTHERS
ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF
APPEALS FOR THE SECOND CIRCUIT
[May 16, 2011]
JUSTICE SCALIA, with whom JUSTICE THOMAS joins, concurring in the judgment.
I agree with the Court that §502(a)(1)(B) of the Employee Retirement Income Security Act of 1974 (ERISA), 29 U. S. C. §1132(a)(1)(B), does not authorize relief for misrepresentations in a summary plan description (SPD). I do not join the Court’s opinion because I see no need and no justification for saying anything more than that.
Section 502(a)(1)(B) of ERISA states that a plan participant or beneficiary may bring a civil action “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.” ERISA defines the word “plan” as “an employee welfare benefit plan or an employee pension benefit plan or a plan which is both,” 29 U. S. C. §1002(3), and it requires that a “plan” “be established and maintained pursuant to a written instrument,” §1102(a)(1). An SPD, in contrast, is a disclosure meant “to reasonably apprise [plan] participants and beneficiaries of their rights and obligations under the plan.” §1022(a). It would be peculiar for a document meant to “apprise” participants of their rights “under the plan” to be itself part of the “plan.” Any doubt that it is not is eliminated by ERISA’s repeated differentiation of SPDs from the “written instruments” that constitute a plan, see, e.g., §§1029(c), 1024(b)(2), and ERISA’s assignment to different entities of responsibility for drafting and amending SPDs on the one hand and plans on the other, see §§1002(1), (2)(A); 1021(a) (2006 ed. and Supp. III), 1024(b)(1); Beck v. PACE Int’l Union, 551 U. S. 96, 101 (2007). An SPD, moreover, would not fulfill its purpose of providing an easily accessible summary of the plan if it were an authoritative part of the plan itself; the minor omissions appropriate for a summary would risk revising the plan.
Nothing else needs to be said to dispose of this case. The District Court based the relief it awarded upon ERISA §502(a)(1)(B), and that provision alone. It thought that the “benefits” due “under the terms of the plan,” 29 U. S. C. §1132(a)(1)(B), could derive from an SPD, either because the SPD is part of the plan or because it is capable of somehow modifying the plan. Under either justification, that conclusion is wrong. An SPD is separate from a plan, and cannot amend a plan unless the plan so provides. See Curtiss-Wright Corp. v. Schoonejongen, 514 U. S. 73, 79, 85 (1995). I would go no further.
The Court, however, ventures on to address a different question: whether respondents may recover under §502(a)(3) of ERISA, which allows plan participants “to obtain other appropriate equitable relief.” 29 U. S. C. §1132(a)(3). The District Court expressly declined to answer this question, stating that it “need not consider whether any relief ordered under §502(a)(1)(B) would also be available under §502(a)(3).” 559 F. Supp. 2d 192, 205 (Conn. 2008). It did note that §502(a)(3) might not help respondents because that provision authorizes only relief that was “ ‘typically available in equity.’ ” Ibid. (quoting Great-West Life & Annuity Ins. Co. v. Knudson, 534 U. S. 204, 210 (2002)). But it described this question as “particularly complicated,” 559 F. Supp. 2d, at 205, and said that “in view of these knotty issues . . . the Court need not, and does not, decide whether Plaintiffs could obtain relief under §502(a)(3),” id., at 206.
It is assuredly not our normal practice to decide issues that a lower court “need not, and does not, decide,” see Cooper Industries, Inc. v. Aviall Services, Inc., 543 U. S. 157, 168–169 (2004), and this case presents no exceptional reason to do so. To the contrary, it presents additional reasons not to do so. Mertens v. Hewitt Associates, 508 U. S. 248 (1993), the case the District Court feared had “severely curtailed the kinds of relief . . . available under §502(a)(3),” 559 F. Supp. 2d, at 205, is cited exactly one time in the parties’ briefs—by the CIGNA petitioners for the utterly unrelated proposition that ERISA contains a “ ‘carefully crafted and detailed enforcement scheme.’ ” Brief for Petitioners 2. And there is no discussion whatsoever of contract reformation or surcharge in the briefs of the parties or even amici.1
The opinion for the Court states that the District Court “strongly implied . . . that it would base its relief upon [§502(a)(3)] were . . . fact that it not for (1) the §502(a)(1)(B) . . . provided sufficient authority; and (2) certain cases from this Court that narrowed the application of the term ‘appropriate equitable relief.’ ” Ante, at 16. I find no such implication whatever—not even a weak one. The District Court simply said that §502(a)(1)(B) provided relief, and that under our cases §502(a)(3) might not do so. While some Members of this Court have sought to divine what legislators would have prescribed beyond what they did prescribe, none to my knowledge has hitherto sought to guess what district judges would have decided beyond what they did decide. And this, bear in mind, is not just a guess as to what the District Court would have done if it had known that its §502(a)(1)(B) relief was (as we today hold) improper. The apparent answer to that is that it would have denied relief, since it thought itself constrained by “certain cases from this Court that [have] narrowed [§502(a)(3)],” ante, at 16. No, the course the Court guesses about is what the District Court would have done if it had known both that §502(a)(1)(B) denies relief and that §502(a)(3) provides it. This speculation upon speculation hardly renders our discussion of §502(a)(3) relevant to the decision below; it is utterly irrelevant.
Why the Court embarks on this peculiar path is beyond me. It cannot even be explained by an eagerness to demonstrate—by blatant dictum, if necessary—that, by George, plan members misled by an SPD will be compensated. That they will normally be compensated is not in doubt. As the opinion for the Court notes, ante, at 10, the Second Circuit has interpreted ERISA as permitting the invalidation of plan amendments not preceded by proper notice, by reason of §204(h), which reads: “An applicable pension plan may not be amended so as to provide for a significant reduction in the rate of future benefit accrual unless the plan administrator provides the notice described in paragraph (2) to each applicable individual . . . .” 29 U. S. C. §1054(h)(1). This provision appears a natural fit to respondents’ claim, which is not that CIGNA was prohibited from changing its plan, but that CIGNA “failed to give them proper notice of changes to their benefits.” Ante, at 1. It was inapplicable here only because of the peculiar facts of this case and the manner in which respondents chose to argue the case. 2 Rather than attempting to read the District Judge’s palm, I would simply remand. If the District Court dismisses the case based on an incorrect reading of Mertens, the Second Circuit can correct its error, and if the Second Circuit does not do so this Court can grant certiorari. The Court’s discussion of the relief available under §502(a)(3) and Mertens is purely dicta, binding upon neither us nor the District Court. The District Court need not read any of it—and, indeed, if it takes our suggestions to heart, we may very well reverse. Even if we adhere to our dicta that contract reformation, estoppel, and surcharge are “ ‘distinctively equitable’ remedies,” ante, at 18, it is far from clear that they are available remedies in this case. The opinion for the Court does not say (much less hold) that they are and disclaims the implication, see ante, at 20.
Contract reformation is a standard remedy for altering the terms of a writing that fails to express the agreement of the parties “owing to the fraud of one of the parties and mistake of the other.” 27 Williston on Contracts §69:55, p. 160 (4th ed. 2010). But here, the Court would be employing that doctrine to alter the terms of a contract in response to a third party’s misrepresentations—not those of a party to the contract. The SPD is not part of the ERISA plan, and it was not written by the plan’s sponsor. Although in this case CIGNA wrote both the plan and the SPD, it did so in different capacities: as sponsor when writing the plan, and as administrator when preparing the SPD. ERISA “carefully distinguishes these roles,” ante, at 15; see also Beck, 551 U. S., at 101, and nothing the Court cites suggests that they blend together when performed by the same entity.
Admittedly, reformation might be available if the third party was an agent of a contracting party and its misrepresentations could thus be attributed to it under agency law. But such a relationship has not been alleged and is unlikely here. An ERISA administrator’s duty to provide employees with an SPD arises by statute, 29 U. S. C. §1024(b)(1), and not by reason of its relationship to the sponsor. The administrator is a legally distinct entity. Moreover, it is incoherent to think of the administrator as agent and the sponsor as principal. Were this the case, and were the administrator contracting with employees as an agent of the sponsor in producing the SPD, then the SPD would be part of the plan or would amend it—exactly what the opinion for the Court rejects in Part II–A, ante, at 13–15. And, in any event, SPDs may be furnished months after an employee accepts a pension or benefit plan. §1024(b)(1). Reformation is meant to effectuate mutual intent at the time of contracting, and that intent is not retroactively revised by subsequent misstatements.
Equitable estoppel and surcharge are perhaps better suited to the facts of this case. CIGNA admits that respondents might be able to recover under §502(a)(3) pursuant to an equitable estoppel theory, but it presumably makes this concession only because questions of reliance would be individualized and potentially inappropriate for class-action treatment. Surcharge (which CIGNA does not concede and which is not briefed) may encounter the same problem. The amount for which an administrator may be surcharged is, as the opinion for the Court notes, the “actual harm” suffered by an employee, ante, at 22—that is, harm stemming from reliance on the SPD or the lost opportunity to contest or react to the switch. Cf. 3 A. Scott & W. Fratcher, Law of Trusts §205, pp. 237–243 (4th ed. 1988). A remedy relating only to that harm would of course be far different from what the District Court imposed.3
* * *
I agree with the Court that an SPD is not part of an ERISA plan, and that, as a result, a plan participant or beneficiary may not recover for misrepresentations in an SPD under §502(a)(1)(B). Because this is the only question properly presented for our review, and the only question briefed and argued before us, I concur only in the judgment.
1 “[P]lan reformation” makes an appearance in one sentence of one footnote of the Government’s brief, see Brief for United States as Amicus Curiae 30, n. 9. This cameo hardly qualifies as “discussion.”
2 The District Court found that §204(h) was unhelpful because CIGNA had provided a valid notice of its decision to freeze benefits under the old plan. If the new plan were invalidated because of a defective §204(h) notice, the freeze would return to force, and respondents would be worse off. Respondents might (and likely should) have argued that the notice for the freeze was itself void, but they “argued none of these things,” and the District Court declined to “make these arguments now on [their] behalf.” 559 F. Supp. 2d 192, 208 (Conn. 2008).
3 It is also not obvious that the relief sought in this case would constitute an equitable surcharge allowable under Mertens v. Hewitt Associates, 508 U. S. 248 (1993). Cf. Knieriem v. Group Health Plan, Inc., 434 F. 3d 1058, 1063–1064 (CA8 2006). This question, however, like the Court’s entire discussion of §502(a)(3), is best left for a case in which the issue is raised and briefed.
ORAL ARGUMENT OF THEODORE B. OLSON ON BEHALF OF THE PETITIONERS
Chief Justice John G. Roberts: We will hear argument first this morning in Case 09-804, Cigna Corporation v. Amara.
Mr. Olson: Mr. Chief Justice, and may it please the Court:
Congress crafted a carefully balanced ERISA enforcement scheme that enables plan participants to recover plan benefits under section 502(a)(1)(B), and equitable remedies for ERISA violations under section 502(a)(3).
In this case, Respondents are seeking a remedy for misleading plan summaries that violated ERISA.
Their remedy, if they were harmed by defective plan summaries, is under 502(a)(3), equitable remedies, not for plan benefits under 502(a)(1)(B).
The section that governs the relief that is sought is a necessary antecedent to any of the other questions in this case, and ERISA carefully structures, and this Court has repeatedly said the Court is not interested and does not -- is not willing to alter the structure that Congress carefully crafted and carefully developed over the years to provide remedies with respect to ERISA programs.
And the scheme is such that, if there is a participant to the plan who is seeking benefits under that plan, section (a)(1)(B) of -- subsections (a)(1)(B) of section 502 provides for relief under the plan.
If there are other violations of ERISA, section 502(a)(3) provides for equitable relief.
That is the scheme carefully developed by Congress.
Now, in this case what happened is that Cigna changed its pension program, its ERISA plan, from a defined benefit plan to a cash benefit plan, cash value plan.
And it put out, as required by ERISA, summaries of the new plan that the district court found, and the court of appeals affirmed, were misleading in the sense that they did not provide all of the information necessary for plan participants to evaluate what was happening.
Now, the changes to the plan were lawful.
ERISA permitted and does permit these kind of changes to an ERISA plan.
There was nothing unlawful about the plan and the plan change.
And the beneficiaries, the participants to the plan, did not have any choice.
Cigna had the right to change the plan.
It did change the plan.
It did have an obligation under ERISA to provide accurate summaries, and the district court and the court of appeals found that those summaries were not inaccurate.
In other words -- they were not accurate.
In other words--
Justice Ruth Bader Ginsburg: Mr. Olson, when you say the employees had no choice, but the district court found, didn't it, that the reason for this plan summary being misleading was that the employer, Cigna, feared that there might be a backlash on the part of the employees if they found out, if they were told the truth about this plan; that is, that it was less favorable, that they would not have the same benefits that they had under the prior plan?
Mr. Olson: --That is correct, Justice Ginsburg.
They had no choice in the sense that Cigna could adopt a change in the plan, as it did.
That was permitted under ERISA, but it was required to give accurate summaries.
The choice that you are suggesting and the district court was concerned about is that an individual could have left the employ of Cigna if he or she was unhappy with the change in the plan, or the district court said there could have been some sort of a protest.
What we're saying is that the remedy -- what was -- what was the violation is the summary itself.
We're not -- we're not challenging that here.
That's a finding below.
The summary was misleading, but that makes it a violation of ERISA.
The summary is not the plan.
Justice Elena Kagan: Well, Mr. Olson, we have several times referred to the plan as having a range of documents associated with it, not as having just a single written instrument, but we referred to documents and instruments governing the plan.
We did that in Curtiss-Wright, which is the case that you pin so much on.
We did that in Kennedy.
And the statute itself talks about that on numerous occasions, that there are documents and instruments, in the plural, and one would think that the SPD is -- is one of those documents and instruments that govern the plan.
Mr. Olson: --It's quite clear from the structure of the statute that is correct, as you suggest, that there may be multiple instruments or documents that are the -- create the plan itself.
But the summary plan document, the SPD, is not a part of the plan.
It is a separate document.
It is a summary.
It is a succinct statement of what might be in the plan, and it must be accurate and it must be written in comprehensible English.
But I would refer the Court to section 1024 (b)(2) and (4), which are on pages 3a, 4a, and 5a of the blue brief.
That describes the obligations that are required with respect to the summary plan document.
And it describes the instruments of both the summary plan document and the instruments that constitute the plan itself in the following sentence -- and this is a similar sentence in subsection (4), but I'm reading from subsection (2), which is on 4a of the blue brief.
It says: "Summary plan" -- it refers to
"a summary plan description and the latest annual report and/or -- and the bargaining agreement, trust agreement, contract or other instruments under which the plan was established. "
The construction of that sentence has to be that the summary plan description is a separate document.
It is not one of those latter category of documents under which the plan was established.
And the proof of that, if English doesn't teach it to us, which I think it does, is the reference to the annual report.
No one would say and no one would contend that the annual report is a part of the instruments creating the plan.
Justice Elena Kagan: Well, I was struck by something else, Mr. Olson.
I was struck by the fact that the -- that the statute saying what is in the summary plan description is packed with information that needs to be in the summary plan description.
By contrast, the written instrument, which you equate to the plan, the written instrument says barely anything about what has to be in it.
It just says the name of the fiduciaries has to be in the written instrument.
So it seems clear that this statute is set up so that everything that is important, everything that the employee needs to know and needs to rely upon, is supposed to be in the SPD, not necessarily in the written instrument.
Mr. Olson: Well, the written instruments, as these things turn out, are long, complex documents.
They may be 90, 100 pages long.
The summary, as you suggest, Congress said, yes, there is a separate document that must state in intelligible English that plan participants can understand the following things, and they must be furnished to plan participants, but they are not the plan document.
The way that ERISA is structured--
Justice Antonin Scalia: Am I missing something?
They -- they cannot be in the SPD unless they are in the plan; isn't that right?
Mr. Olson: --Well -- if the -- if the--
Justice Antonin Scalia: So the one cannot be more detailed than the other, can it?
Mr. Olson: --The plan can be more detailed than the SPD.
Justice Antonin Scalia: Right.
Justice Elena Kagan: But can't the SPD--
Justice Antonin Scalia: Whatever is in the SPD must be in the plan; isn't that right?
Mr. Olson: Well, if the plan is -- if the SPD complies with ERISA, yes.
It has to be--
Justice Antonin Scalia: Yes.
That's what I'm talking about, of course.
Mr. Olson: --Yes, exactly.
But not everything that is in the plan, or the plan -- as the statute says, the documents that constitute the plan need not necessarily be in the summary.
The words "summary plan"--
Justice Elena Kagan: --But, Mr. Olson, what about the opposite?
Because the statute seems to be written so that things are in the SPD which don't need to be in the written instrument.
And together, they all somehow constitute the plan.
Mr. Olson: --Well, I submit that that is not the way the statute is written, and subsections (2) and (4) of the provision that I was referring to make that clear if the word "summary" itself did not make that clear.
But the Curtiss-Wright case to which you referred to in your earlier question also proves that.
Curtiss-Wright case talked about a summary plan description and said it can't modify the plan -- using "plan", "summary plan description", in different terms -- it cannot modify the plan, which is what the district court here held, unless the plan specifically says that it may be modified in a certain way and that the summary is an appropriate amendment to the plan.
So the Court -- and this was a unanimous decision of this Court -- was referring to the summary as something that was separate, that might modify the plan if the plan itself allows for it to be modified in that fashion.
Now, the government says that the summary plan description is a part of the plan and so do Respondents.
And that's what the court below -- the court below didn't actually find that the SPD was a part of the plan.
The court found, on the latter pages of its opinion, that it was a modification, it was an amendment to the plan.
That is inconsistent with the Curtiss-Wright case because in this case the plan itself specifically says that it cannot -- does not say that it can be amended by the SPD.
Justice Ruth Bader Ginsburg: I thought that what the district court said was that they would treat the plan as containing what the summary said, not that -- that it was part of the plan itself, not an amendment, amendment.
I thought that was what the district court said.
Mr. Olson: I think in the -- on the page of the -- this is the summary to the cert petition, page 218, which is the district court's -- the conclusions of the district court's decision.
Under Roman numeral viii, the district court specifically said that
"The terms of part B have been correspondingly modified by the SPDs. "
The court was saying -- I think you were referring, Justice Ginsburg, to the relief that the court ordered, but the court was ordering that relief on the theory that the SPDs modified the plan.
And the plan itself under Curtiss-Wright doesn't provide for it to be amended in that way.
And the SPDs--
Justice Antonin Scalia: It can't be part of the plan without modifying the plan, can it--
Mr. Olson: --That's correct.
Justice Antonin Scalia: --because it contradicts other provisions.
Mr. Olson: That's correct.
And the SPDs, the two SPDs themselves on page 922a and 938a of the Joint Appendix, specifically say that if there is any discrepancy between the SPD and the plan the plan governs.
The language is at the bottom of, for example, at the bottom of 922a.
Justice Elena Kagan: But the SPD can't negate the force of ERISA, and if ERISA says that the summary has to be consistent with the plan documents nothing in the SPD can negate that requirement.
Mr. Olson: --That's correct.
No one -- but Congress did consider prohibiting a provision like that in SPDs, that they could not disclaim, they could not say that if there is any inconsistency the plan governed, and Congress did not adopt such a provision.
This is a perfectly legal provision, to tell someone that if there is any discrepancy -- and there is bound to be discrepancies.
As I said, the plans themselves can be 90, 100 pages, very long and very complex.
That's why there is an SPD that can't contain everything in the plan.
And one of the thing that would be the outcome of what the government and Respondents are urging here is that plan creators, these companies that create these plans, either will be discouraged from doing it or they will start preparing summaries that are 90 and 100 pages long.
Justice Ruth Bader Ginsburg: But they can't do that because the statute requires a summary to be understandable and not prolix.
Mr. Olson: That's Catch 22, because if there is a discrepancy because they have to be short, summary, and intelligible, then we are have -- we're faced with the proposition that someone's going to say, well, I read the SPD and it didn't say what was in the plan.
If the SPD is as long and as detailed as the plan, then there is a violation of ERISA.
My point I guess in this is that, yes, Justice Kagan, the statute requires the SPD to contain certain information.
We accept the fact of the conclusions of the court below in this case that they did not do so.
There are two SPDs.
They failed to live up to the requirements of ERISA.
There is a remedy for that.
It is a violation of ERISA and it specifically says in 502(a)(3) that for violations of ERISA, equitable remedies are available.
And that is what Congress decided.
Unless it's a part of the plan, you must go under (a)(3).
Justice Elena Kagan: But the very question here is if there is an SPD that is inconsistent in some way with the written instrument, what happens?
Is the written instrument modified or instead is the provision in the SPD given operative effect?
And that question is one about your benefits under the plan.
Mr. Olson: I would submit that it can't modify the plan unless the plan permits that.
That's the unanimous decision of this Court.
Justice Elena Kagan: I do think you are over-reading Curtiss-Wright.
Curtiss -- Wright talked about whether a particular provision satisfied the requirement that a plan have an amendment provision.
It didn't say anything at all about whether there are provisions that can have operative effect regardless of whether they pass through a formal amendment procedure.
Mr. Olson: It seems to me -- I think we might disagree about that, respectfully.
I think that the sense of the opinion in Curtiss-Wright was that if you are going to say that this SPD modifies the plan, it can only do so if the plan permits the SPD to modify the plan.
Then the Court sent it back to a lower court to determine whether in fact the employees that were involved in creating the SPD there had the authority under the plan to modify the plan.
Justice Stephen G. Breyer: So far we are just discussing, I take it, whether under (1) the other side is entitled to their benefits even if they weren't hurt, on a contract theory.
Mr. Olson: That--
Justice Stephen G. Breyer: All right.
But I thought we took the case to decide a different issue.
Mr. Olson: --Yes.
Justice Stephen G. Breyer: And that is: I will assume you are right, it should have come under (3), but I don't know if that is harmful, whether it was (3) or (1).
And the question I thought we were to decide WAS, if you are under (3), say, where equity is at issue, now equity is at issue and the district court says: Here we have 27,000 people, and now here's how I'm going to go about this.
I'm going to look at this provision mistake here, and the mistake it seems to me was likely to cause some harm.
And once that is shown -- and they showed it, it's likely to cause it harm; we can't be sure, but it's likely -- then it's up to your client to refute case by case that these guys or women were not really harmed.
Now, that seems very sensible to me.
And if that's the issue we're going to decide, I would like to hear you explain why that isn't sensible.
It's an equitable matter.
This is simply a way of going about it.
What's wrong with that?
Mr. Olson: Well, in the first place, it is important which section.
Justice Stephen G. Breyer: I agree, but I don't understand -- I'm with you on this one so far.
Mr. Olson: So because it's a different defendant.
The plan is the defendant, versus the plan administrator is the defendant, so that's important.
Secondly, (a)(3) provides only for remedies that are available in equity.
Then the point that you are making with respect to what provision of equity, what is the -- what is the action that's brought and what is the remedy sought, as this Court talked about in the Varity case, and so therefore those are those questions.
Now, the Second Circuit said "likely harmed".
The fact is, as I pointed out at the very beginning, this was a lawful change in a plan and it's a plan where 27,000 people that were employees were participants in this plan and they would have had to do, as Justice Ginsburg suggested, either leave the company and suffer some harm or engage in some--
Justice Stephen G. Breyer: You are sounding to me as if you are saying there wasn't likely harm.
Are you conceding that the standard that they used, the standard was -- the question that you raised at the beginning, whether -- whether the showing of likely harm is sufficient in the absence of a rebuttal?
Mr. Olson: --Absolutely we are not.
Justice Stephen G. Breyer: All right.
That's what I want to hear: What's the argument against that standard?
Mr. Olson: Six circuit courts of appeals have held that detrimental reliance is required.
If this is an action under (a)(3) under equity, neither the government nor the Respondents dispute the fact that detrimental reliance would be required if you are proceeding in equity under (a)(3).
Justice Stephen G. Breyer: Does "likely harm" capture that idea?
Mr. Olson: "Likely harm" is not a demonstration of prejudicial reliance.
Justice Stephen G. Breyer: Why not?
That's the kind of harm they mean.
What they mean by harm is they were hurt, brought about by reliance.
Mr. Olson: Well, in the first place, it comes out of the blue, "likely harm", as I suggested, since this was a legal lawful change.
People were going to retain their employment.
They didn't have a right to opt for one or the other.
If they could prove that they were--
Justice Stephen G. Breyer: You object to this decision, saying the following: Of course, the lower court said likely harm is necessary.
As we understand it, given the context of equity, what that means here is that there is reason to believe -- reason to believe -- it was probable that, or some words like that, that there would have been harm caused by reliance on the misstatement.
Mr. Olson: --That would not be justified at all.
I mean, under equity, as this Court said in the Lyng v. Payne case, which is cited in the briefs, this is like an estoppel action.
An essential element of an estoppel action is detrimental reliance on the adverse party's misrepresentation.
What the district court below did was by coming up with this 27,000 members of this purported class somehow were hurt by a change in a plan over which they had no control, over which they had no discretion, unless they were going to leave the--
Justice Ruth Bader Ginsburg: But wasn't the -- wasn't the meaning of "likely harm" simply that they were promised one thing in the plan documents, and so what likely harm is, is we have to do away with what they call, what is it, the wear-away effect?
So that's the harm, the wear-away effect, and we have to remedy that.
And the way to remedy it is to treat this as, what is it, instead of (a) or (b), (a) plus (b).
Mr. Olson: --And that would be an action to seek benefits under the plan, which would be an (a)(1)(B) action against the plan itself.
Justice Ruth Bader Ginsburg: Yes.
Mr. Olson: Against the plan.
The record suggests in various parts -- I can't remember which page to refer to -- that $70 million would be the consequence of this against the plan, on which some people, depending upon how long they were with the company, when they left the company, whether they were about to retire, whether they stayed longer and the interest rates fluctuated, there can be all, innumerable permutations of the effect upon persons.
Chief Justice John G. Roberts: Then you can't--
Justice Anthony Kennedy: Excuse me, Chief Justice.
Chief Justice John G. Roberts: --Then you can't require, it seems to me, each individual to make a calculation about whether they have actually been harmed, whether there is detrimental reliance.
The whole point of these plans is to give some people some comfort and assurance when they are age whatever, that: Don't worry; retirement is taken care, or at least I can rely on that.
And your formulation would sort of put that up in the air and say: We don't know if you are going to be harmed or not; wait until you are 65 and we will see.
Mr. Olson: Well, Chief Justice -- Mr. Chief Justice, that is the statute.
The statute gives you a relief with respect to a misleading plan summary under the laws of equity.
The laws of equity would require that the person say -- demonstrate in some way that they were harmed.
The petition -- the Respondents in this case, the named members of the class, claim that they were out some 30-some thousand dollars each.
They would have an incentive to bring an action by themselves.
Justice Ruth Bader Ginsburg: But it couldn't--
Mr. Olson: Under the rules--
Justice Ruth Bader Ginsburg: --But it couldn't be brought as a class action, and isn't that a large piece of this picture, that proceeding as they did they can proceed as a class?
Proceeding under detrimental reliance, it would be hard to get a class because it would be an individual case of detrimental reliance.
Mr. Olson: --The Rules Enabling Act provides that a class mechanism cannot change the substantive provisions of law.
And so, it cannot be that because this is brought as a class action the rules of equity somehow change.
Justice Ruth Bader Ginsburg: No, the question is, under the -- under the section that the district court proceeded under, not the one that you say is proper, a class action would be appropriate.
Mr. Olson: A class action might be appropriate but it would not change the detrimental reliance requirement.
Justice Anthony Kennedy: Well, turning to (a)(3), I have two questions.
One is, as you -- and this is probably for your friends on the other side more than you.
But as you understand the "likely harm" standard that prevails in the Second Circuit, is this likely harm to a majority of the members of the class, all the members of the class?
Do you know?
Has the Second Circuit told us what that means?
Mr. Olson: --Well, the Second Circuit suggested, and the government and Respondents, particularly the Respondents, say if there's a material difference likely harm is presumed.
And the government itself says--
Justice Antonin Scalia: Likely harm to whom?
I think that's the question--
Mr. Olson: --That is the question.
Justice Antonin Scalia: --that Justice Kennedy is asking, and I have the same question.
Does it mean likely -- is it likely that the class as a whole has been harmed, or that each -- is it likely that each individual member of the class has been harmed?
Justice Anthony Kennedy: Or -- or a significant number?
Justice Antonin Scalia: Or a majority?
What does likely harm mean?
Do we know that?
Mr. Olson: I -- I totally agree with the import of those questions.
You can't describe that--
Justice Anthony Kennedy: My question had no import.
I really wanted to know the answer.
Mr. Olson: --Well, the answer -- the answer is what the district court ordered and the government seeks and the Respondents seek, is they are all harmed by this, that there is any material disparity, then everybody--
Justice Stephen G. Breyer: Maybe it wouldn't be too hard.
They are joined as members of the class in light of a certain set of characteristics and the judge would find that, other things being equal, individuals who have that set of characteristics which in this circumstance make them members of the class would be harmed in all likelihood, okay?
Now, it's up to -- it's up to the -- the defendant then to show that in a particular case this individual wasn't harmed.
Mr. Olson: --It defies reality--
Justice Stephen G. Breyer: Why?
Mr. Olson: --Justice Breyer, to suggest that the 27,000 people -- each one occupy a different position in terms of the length of their employment, when they might be retiring, what their benefits might be, whether they might take a lump sum or an annuity.
All of those thing are different.
And the only way they--
Justice Stephen G. Breyer: Well, it depends on the facts.
Maybe they'd have a union--
Mr. Olson: --The only way they could have been harmed, Justice Breyer, is if they had otherwise decided to leave the employ of the company and go someplace else.
They could demonstrate that.
If I could save my time--
Justice Anthony Kennedy: Your white light -- just one more thing.
If you proceed under (a)(3), doesn't Mertens bar the award of -- of monetary damages?
Mr. Olson: --I think it would.
I mean, this Court--
Justice Anthony Kennedy: Well, then -- then you are not offering us much.
You say: Oh, please go under (a)(3), but then you go back and say: Oh, well, you can't get monetary damages.
Mr. Olson: --In the first place, that's Congress's choice.
It's an equitable remedy that would be required.
Congress made that decision.
This Court has said it is not going to reconstruct what Congress carefully did.
The thing is that it would have to balance people wanting to create these plans and go into these plans and the solvency and stability of the plan; what Justice Breyer is suggesting, and the Second Circuit suggested, is that you would expose plans to enormous liability because someone might think that someone might have left the employ of the -- of the company and taken a different job.
That's not realistic.
And -- and that's why it just came out of -- out of thin air.
If I may--
Chief Justice John G. Roberts: Thank you, Mr. Olson.
ORAL ARGUMENT OF STEPHEN R. BRUCE ON BEHALF OF THE RESPONDENTS
Mr. Bruce: Mr. Chief Justice, and may it please the Court:
Our position is that detrimental reliance is not found in section 102 of ERISA, which establishes the summary plan description requirements.
It's not found in section 404(a)(1)(D) of ERISA, which establishes the fiduciary duty that's in accordance with the plan documents and instruments, plural, insofar as consistent with the provisions of this title.
It is also not consistent with any language in section 502(a), either in 502(a)(1)(B) or 502(a)(3).
The reference to equitable relief is to appropriate equitable relief to redress a violation of Title I, or a violation of the terms of the plan.
Justice Anthony Kennedy: Well, that seems to me like just a roundabout, complex way of saying that you must recover under the plan, because if reliance is not required then there must be some basis on which you must recover, and that recovery must be under the plan.
So it's -- it's--
Mr. Bruce: The -- the--
Justice Anthony Kennedy: --If you say injury is not required, then -- then I don't see how the SPD can give you recovery, unless the SPD is the plan, which brings us right back to the argument, which is your argument, under the first -- under the first section, under (a).
Mr. Bruce: --Under either (a)--
Justice Anthony Kennedy: --(a)(1), (a)(1).
Mr. Bruce: --Under -- our understanding is that under either (a)(1)(B) or (a)(3), that the court is effectively providing an injunction in a case like this, where -- where an action violates the statute.
And here a plan provision which had a very detrimental effect on people was not disclosed to them, and so the effect of the statute is to make that unfavorable provision ineffective.
Justice Samuel Alito: If the -- if the SPD is part of the plan, then where does the "likely harm" standard come from?
Mr. Bruce: --I think, as we've said in our brief, we think that the likely harm, possible prejudice, and the material conflict that -- that is used in the Third Circuit in Burstein, we think that all of those standards are very similar, that they are really looking at whether--
Justice Samuel Alito: No, but why is there any requirement whatsoever, other than the fact that it's in the plan?
If the SPD is the plan and the SPD says you get certain benefits that you wouldn't get under the written document, then -- the previously executed written document, then you get the benefits under the SPD, period.
It doesn't matter whether there's likely harm or reliance or anything else, right?
Mr. Bruce: --Well, I think, Justice Alito, we see this more as a nondisclosure issue, that the unfavorable provisions in the plan were not disclosed, and that the effect of the statute is to make those unfavorable plan provisions ineffective.
But because the statute refers to, for example, material modifications and being sufficiently comprehensive and reasonably apprising, that there are enough qualifications in there where the Court can look and see, is this really -- was this conflict, was it really about something that was significant to people that might have an impact on their decisionmaking and whether the terms of their employment are satisfactory, whether they might want to seek another job, they might just go into the office and say: We need more benefits.
Chief Justice John G. Roberts: It seems to me that it's a very tough argument to say -- to make a nondisclosure claim on the theory that the summary is part of the plan, because the whole point of a summary is not to disclose everything.
If it disclosed everything, it wouldn't be a summary.
And if you can claim something because it didn't disclose it, it seems to me that's in tension with the idea that it's not supposed to be just a repetition of the plan.
Mr. Bruce: Our position is that the SPD is one of the documents or instruments governing the plan.
And by statute it's required to have certain -- to meet certain requirements, and therefore it becomes a document governing the plan.
It is -- in response to Mr. Olson, it is referred to as a document in section 1024(a)(6) of the statute, and of course this Court has repeatedly referred to it as a plan document and to "plan documents" plural.
Justice Ruth Bader Ginsburg: But is it -- I think the brief -- the Petitioner's brief pointed out, it governs the plan only when it's more favorable to the participants, because you wouldn't say, if the plan were more favorable and the summary would show fewer benefits, that the summary would then govern.
Mr. Bruce: I think the favorable/unfavorable is that the way -- the way I see it is that an unfavorable plan term, when you look at Curtiss-Wright, an unfavorable plan term must be validly adopted and it must be disclosed in accordance with ERISA in order to be effective.
And so in the Frommert v. Conkright case, that was specifically what the Second Circuit held, was that the summary plan description did not disclose the phantom offset and therefore the phantom offset was ineffective.
Here the summary plan description did not disclose the wear-away provisions.
People's normal expectation is that if they are under a pension plan and they are continuing to work, that they are continuing to earn pension benefits.
So that the SPD was not apprising them that there were unfavorable provisions in the plan, which were validly adopted, but which were secret as far as they were concerned.
Justice Anthony Kennedy: So there's a presumption that everything in the plan is favorable?
I still don't see how you get it both ways.
If it understates the benefits, that doesn't count?
Mr. Bruce: The, the -- the Congress in ERISA is concerned with unfavorable effects on participants.
It's about protecting employee rights.
So the focus is on losses of benefits and there is a specific provision in the regulations and in the statute about disclosing all the circumstances that can result in a loss of benefits.
So there was a plan provision here which caused the loss of benefits that was never disclosed to people.
And it was -- there was no baseline where people knew, well, the plan document may have a wear-away provision, and the SPD doesn't mention it and therefore there is no wear-away.
They didn't know what wear-away was.
They don't know what wear-away is today, because it has never been disclosed to them that there is a way to rig up a pension plan where you can have a period of years, unbeknownst to you, where you are not earning any an additional benefits.
Justice Stephen G. Breyer: Are you finished with that?
Mr. Bruce: Yes, sir.
Justice Stephen G. Breyer: If you are finished: As I understand what you have been saying and written, you don't mean that the SPD, the summary, is a contract?
I mean, one thing would be to say it's a part of the plan and moreover it's a contract, so therefore we enforce it according to terms.
That's one view.
But if you took that view, you get into problems such as were mentioned.
The employer would write 10,000 pages because he knows it's an enforceable contract.
Nobody would understand it.
You would have to worry about the time when it was less favorable than the written document.
So call it a plan if you want, as long as you don't mean it's an enforceable contract.
Now, there is a provision that deals with it, saying just what you said in response to Justice Alito.
And what I don't understand is why wouldn't that provision govern?
I take it there's a provision, 1054(g)(1), that says a plan cannot reduce the rate of accrual of future benefits unless there is written notice in a manner calculated to be understood by the average plan participant.
So I would have thought, I read that, I get what you've said in your brief.
The summary was inadequate.
It wouldn't have been understood, and therefore, according to this particular provision, those provisions in the plan that reduce benefits are void.
So now we enforce the plan with the -- in the absence of those particular void provisions, and you get what you want.
Now, I thought that makes a lot of sense to me, except I don't see that anywhere in this case.
Mr. Bruce: Now--
Justice Stephen G. Breyer: So there's some reason it doesn't seem to appear in the opinions.
It doesn't appear in the briefs.
It doesn't appear anywhere until you just mentioned it in response to Justice Alito, or seemed to.
Mr. Bruce: --No, it is in the opinion.
Justice Stephen G. Breyer: It is?
Mr. Bruce: The district court found a violation.
It's 1024(h) -- 204(h) of ERISA, that that provision -- the district court found a violation of that provision, which if the court had provided relief would have resulted in the class receiving much more relief than the court ultimately ordered; that it would have resulted in the class receiving four or five times as much relief, because they would have just been put back under the old pension formula.
Justice Antonin Scalia: What is that provision?
Justice Stephen G. Breyer: (h).
He's right, it's (h).
Justice Antonin Scalia: Does it appear anywhere in the briefs?
1024(h), does it appear anywhere in the briefs?
Mr. Bruce: It appears in our petition for certiorari, because after the district court found a violation of it the district court declined to provide relief because there had been an intermediate interim amendment that might have--
Justice Stephen G. Breyer: I understand that.
So suppose we can't reach that, which would seem to be the logical thing to govern this, but we can't, okay.
Then we only have two choices.
The first choice is (1)(b), which seems to -- you want to use that by treating the summary as a contract, or we go to (3), in which case we are under equity.
Now, between those two, the first one gets all the problems that we just were talking about.
The second one would seem to be you are free and clear as long as you show some kind of reliance and harm, and then we are back to what I thought we granted this for, which is why not say if harm is likely then the burden shifts?
Justice Antonin Scalia: Why not?
Mr. Bruce: --That's -- that's -- that's one way that it would be -- that's the way it's approached under the Securities Act, where there is an expressed reliance requirement.
Justice Stephen G. Breyer: What happens in a trust law where, let's say, there are 10 or 50,000 beneficiaries in a trust, and -- and the trustee has indeed made an error.
And now they can recover money only if, only if there really has been harm.
Now, how does -- how does trust law work that out?
This can't be the first time this ever arose in history.
We have a big class.
Mr. Bruce: Well, we didn't go based on a trust law case involving a big class, but we based it on Bogert and on section 173 in the Restatement of Trusts, that when there is a breach of the duty to disclose all of the material information that the beneficiary needs to know in interacting with a third party, which in this case would be Cigna with respect to their employment, that then there is no requirement of proving reliance; that the trustee can prove -- as the Second Circuit set up, that the trustee can try and prove that the beneficiary had all the information that they needed.
Justice Anthony Kennedy: So you say under standard trust law once you show there's a breach, the burden shifts to the trustee to show that there's no harm?
Mr. Bruce: For a breach of the duties to the--
Justice Anthony Kennedy: I understand that to be the Second Circuit rule, but I didn't understand that to be the rule generally in the law of trusts and I quarrel with the Government's brief on that.
I think the Government's brief is quite wrong to suggest that this is part of the law of trusts.
Now, it could be the law of ERISA under the Second Circuit, but that's something quite different.
Mr. Bruce: --My understanding is -- I mean, that's the law that's been -- that this Court has adopted in securities cases where we have nondisclosures to broad classes, is that there's a presumption of reliance, which -- because it's unrealistic for thousands of people to prove reliance in -- in--
Justice Anthony Kennedy: But that's not under trust -- trust law, or correct me if I'm wrong.
Mr. Bruce: --Well, that's -- that's what I'm saying, that there's a commonality between the securities cases, trust law as stated in the comment to section 173 and in Bogert, and what the Second Circuit is doing.
Chief Justice John G. Roberts: Can I just stop -- the securities cases, does that involve stock traded in a market, in which case the inference of harm would be much more obvious and follow more logically than in the trust context?
Mr. Bruce: Well, one -- one of this Court's very first ERISA cases was Teamsters v. Daniel, in which the Securities and Exchange Commission had considered pension plans to be a security.
And -- and the case actually involved break in service rules, and this Court concluded that whatever protections the securities laws offered, potentially offered, to participants were now offered in more concrete form under ERISA.
But the -- the point that I want to get back to on reliance is that my reading of this Court's decision in Bridge and in Lyng v. Payne is that this Court does not look for the closest analogy to a statutory provision.
The question is: What did Congress do in enacting this statutory provision?
Justice Samuel Alito: Could I ask you this: If this were an individual action and it -- and it were under (a)(3), what would either the plaintiff or the defendant have to show, depending on what the burden, who has the burden, on the issue of likely harm?
What would "likely harm" mean in that context?
The person was likely to have left the employment of the company, or what?
Mr. Bruce: "Likely harm" can include that the -- that if the person knew about the provision, they might have asked for the provision to be changed.
They might have asked for a different compensation package.
They might have asked -- they might have taken personal kind of self-help steps to protect themselves so that they might have -- have, you know, decided to have their wife work longer.
They might have decided to work longer themselves.
They could have saved, saved differently.
There's both the steps that you can take in relation to your employment and the steps that you can take on a personal basis.
Justice Stephen G. Breyer: Could they here have gone -- could they also have said to the company: Look, why are you doing this?
If interest rates fall, we are going to lose money.
But interest rates might rise, and if interest rates rise, you'll lose money.
So we're risk-averse, so what we would like to do is just make sure we get the same pension that we would under Plan A, and then if there is more on Plan B add it in, and we'll risk the fact that interest rates might have gone up.
Mr. Bruce: The district court--
Justice Stephen G. Breyer: They could -- they might have talked the company into it.
Mr. Bruce: --Well, the district court found that there was a real prospect of employee backlash if the employees knew about these benefit reductions.
It's well-established in behavioral economics that people are very averse to losses.
So if -- if the statute and the regulations are requiring the loss to be disclosed, it isn't going out on a limb to say that there is going to be a reaction to that.
And here, Cigna knew that there was a reaction to that, and they had examples from the press in which Deloitte & Touche had had a similar situation where they had to roll back the cash balance changes because employees were so upset.
I think, in response to Justice Alito's question, the -- I don't think that the individual has to -- that if the individual has to prove possible prejudice, that I think that, as -- as our district court ruled here, then I think the standard inevitably becomes very close to actual prejudice.
So I think that the possible prejudice is really to the employee group.
It's to the -- the statute is in terms of the average plan participant.
It's all based on objective standards.
Justice Anthony Kennedy: Under your proposal I assume, if you prevail, under your position, the summaries will now become part of the plan.
So that even if there's no intent to mislead, there can be a class action if the -- if the SPD is in -- anyhow at variance with the plan and to the detriment of the employee.
Mr. Bruce: Well, as we said in the brief, there are already cases that -- that recognize exceptions to liability here, and one of them is for prompt correction of any problem.
So if you have the unintentional error in that unintentionally the wear-away provisions weren't disclosed, well, then the issue is: Why wasn't that corrected at any point in time?
We are now 12 years out and Cigna has never disclosed those wear-aways to anyone.
Justice Samuel Alito: If an administrator -- if an administrator issues a summary plan description that is 100 pages long and is basically the same thing as the written instrument and that's a violation of the requirement in ERISA that it be a summary and that it be intelligible to ordinary readers, what remedy is available to a beneficiary?
Mr. Bruce: I think that that's -- obviously, injunctive relief in terms of an order to correct that would be available.
I think in terms of -- of affecting the benefit offers, of saying, well, is a -- if the SPD is identical to the plan document, is there any -- there are no undisclosed plan provisions, then.
So it becomes -- it becomes more difficult in terms of relief, but obviously there would be relief for the understandability requirement.
Justice Samuel Alito: Well, doesn't that put the -- think of the incentives for the administrator in that situation or for the plan sponsor.
If you issue a succinct SPD, you risk misleading the recipients as to the contents of the plan and you may have financial liability.
If, on the other hand, you issue -- you are on the side of issuing an SPD that is comprehensive, well, the worst that can happen, according to what you just said, is you could be faced with an injunction to provide a more concise and comprehensible statement.
Mr. Bruce: Well, intentional errors should not be countenanced and here Cigna was deliberately misleading employees.
If it's an unintentional error, then it should be promptly corrected.
Chief Justice John G. Roberts: Thank you, counsel.
Mr. Bruce: Thank you.
Chief Justice John G. Roberts: Mr. Kneedler.
ORAL ARGUMENT OF EDWIN S. KNEEDLER ON BEHALF OF THE UNITED STATES, AS AMICUS CURIAE, SUPPORTING RESPONDENTS
Mr. Kneedler: Mr. Chief Justice, and may it please the Court:
The pension benefits an employee accrues while she works are a major component of her compensation for working, just as her wages are.
The employee is entitled to receive those benefits and to recover them if they are withheld without any particularized showing of detrimental reliance, just as she is entitled to recover the wages that were promised to her.
Justice Elena Kagan: Mr. Kneedler, do you view this as essentially a contract case, as that just suggested, or instead a trust case?
Mr. Kneedler: We view it as basically a contract case.
In Firestone, the Court referred to contractually -- contractually guaranteed benefits, those under the plan.
And the reason we think that here, in this case the district court found that the SPD basically promised, represented to employees, that after the conversion they would receive pension benefits in the form of A plus B, the old benefits plus the new benefits, accruing right away.
ERISA -- the scheme of ERISA is that the SPD is often and typically the only document that the employee receives to inform him or her about the contents of the plan.
Justice Samuel Alito: If this is a contract case, then where does the "likely harm" standard come from?
If I'm owed something under a contract, I am entitled to get that under the contract.
I don't need to show that I was likely harmed by, that I relied in any -- in any way on anything.
Mr. Kneedler: Right.
We do not think detrimental reliance -- and I think it works out--
Justice Samuel Alito: Do you think likely harm is required?
Mr. Kneedler: --In this sense: If the -- if the SPD contains these sorts of representations such that the employee could reasonably be expected to rely upon them in defining her benefits, then that controls.
The likely harm is not being told, or being told something different from what the underlying plan says.
Justice Antonin Scalia: But the likely harm -- that's not the likely harm.
That's the breach.
That's the offense.
Mr. Kneedler: But the--
Justice Antonin Scalia: You are saying once you make the offense, you have to cough up what you stated in the -- in the summary.
Mr. Kneedler: --Unless the participant actually knew or couldn't reasonably depend upon it.
Actually knew -- for example, this was the case in the Govoni case in the First Circuit, that -- whose formulation is the one that other courts typically follow.
That was the situation where the employee found out before she retired what the true facts were and therefore there could have been no claim of harm or -- or that the--
Justice Antonin Scalia: Well, then it's not contract.
Justice Anthony Kennedy: The minute you get away from contract--
Justice Antonin Scalia: Is it contract or not contract?
Mr. Kneedler: --No, it is contract, because -- because in that -- it -- it's -- the question is what is the contract.
To the employee, typically the SPD is the only thing that is the contract.
Justice Stephen G. Breyer: But the SPD is written by the fiduciary.
Mr. Kneedler: Yes.
Justice Stephen G. Breyer: And the other is written by the -- by the person who is giving the money, the employer.
So now you are saying that it's a contract, even though it wasn't written by the employer, and even though it could differ in dozens of ways from the actual -- from the actual plan document.
Sometimes they would be favorable to the employee, sometimes they would be unfavorable, sometimes they would be different but neutral.
So what's the judge supposed to do?
Forget about the basic document and just enforce this thing written by the fiduciary?
Mr. Kneedler: Well, the underlying formal document is -- is what controls, unless the SP -- unless there is a conflict.
Justice Stephen G. Breyer: I said that there can be conflicts, sometimes favorable to the employee, sometimes unfavorable, sometimes neutral.
So what we have is a document that's, by the way, supposed to be short, but I guess if we took your view it wouldn't be short anymore.
And -- and it -- it could differ in any one of three ways; and I could think of seven other ways.
So -- and we'll find seven others.
So what -- how is a judge supposed to react?
He's supposed to say that this twopage document is the contract, is the contract, and there are all kinds of conflicts -- what's supposed to happen?
Mr. Kneedler: --It forms -- it forms part of the contract.
And cases of conflicts between the SPD and the -- and the formal plan document are not common and they shouldn't be, because the SPD -- the administrator or the employer has an obligation to make--
Justice Stephen G. Breyer: That isn't my question.
My question is: One, why should a document written by a different person, the fiduciary, govern over the actual plan?
Second, what happens when you have a favorable conflict, what happens when you have an unfavorable conflict, what happens when you have a neutral conflict?
Mr. Kneedler: --As to--
Justice Stephen G. Breyer: How should it be worked out?
Mr. Kneedler: --As to the first point, it is -- it is common and it was critically true here that the -- that the employer, the plan sponsor, is involved in -- in drafting the SPD.
This was an SPD that was issued in conjunction with the plan amendment, and the SPD and the plan amendment--
Justice Stephen G. Breyer: I think the fact that this individual in this case happened to be the same group or person is beside the point of my question.
Mr. Kneedler: --Okay.
And -- and so the -- the second point is, I -- I think it would be useful for the Court to look to the experience of certificates of insurance under group insurance plans.
That is the most directly analogous circumstance in our view.
It is the prevailing position in the courts and it has been for sometime that where an employee -- or employee under a group plan or pension plan receives a certificate of insurance that sets forth certain elements, essential elements of the plan, and the -- an underlying insurance policy is in conflict with that, that the certificate of insurance governs, for the same reason that the SPD governs--
Justice Antonin Scalia: Is this governed by ERISA or are these things governed by ERISA?
Mr. Kneedler: --Some of them may be and some of them may not be.
Justice Ruth Bader Ginsburg: Where does the rule come from, then?
Mr. Kneedler: --The -- the rule is a common insurance rule that in -- in the group insurance situation, where you have an underlying policy that the individual insured is not going to see.
Justice Antonin Scalia: But we have a statute here which says that it is the plan that governs.
I mean, that -- that's -- don't you think that's a crucial difference?
Mr. Kneedler: Well, but it's also a statute that as this Court said in Curtiss-Wright that the SPD is designed to -- to furnish the employee the essential information under the plan.
Justice Stephen G. Breyer: Is that true of the certificate of insurance?
Is a certificate of insurance a simple document that any consumer is able to understand or -- or is supposed to be?
Mr. Kneedler: That's what it's supposed to be.
And importantly in that?
Justice Stephen G. Breyer: Is there an example that I can look at?
Find one, on line or--
Mr. Kneedler: It's not in the record in this case, but -- but we cite some insurance treatises.
And a further point I want to make--
Justice Antonin Scalia: They use a likely harm standard?
Is that where the likely harm standard comes from?
Mr. Kneedler: --No, the likely harm standard was a formulation of the -- of the Second Circuit.
Justice Antonin Scalia: That's nice.
Where did they get it from?
They just made it up?
Mr. Kneedler: Well, I -- I think it was -- it was -- it was an effort to judge whether the -- whether the particular statements in the SPD were of the sort that -- I think it really gets at materiality.
Justice Elena Kagan: Mr. Kneedler, I think it's a hard question here as to whether to think of this as more like a contract dispute or more like a -- a trust issue.
If we were to look at it as a trust issue, what would be the result of that?
What kind of test would we use?
Mr. Kneedler: I think it would be -- I think it would be the same thing where you -- where you have a -- either in this case an affirmative representation of what the -- of what benefits will be due, or you could have a situation where there was a -- a failure to disclose.
Justice Anthony Kennedy: --Well, if it's a contract case that you are submitting then the burden shifting rules it seems to me that apply in trust don't apply.
Mr. Kneedler: Well, the burden shifting rule would apply to the extent that enabling the administrator of the plan or the employer to demonstrate that the employee actually knew or that there were other documents that would have informed the employee so that he would not have been mislead by the statements in the -- in the SPD.
Justice Anthony Kennedy: Well, and in all of that, I think under trust law there has to be a showing of breach and harm before there is -- the burden shifts on causation.
And your brief left out the -- you indicate the burden shifts just so long as you show that there is a misstatement.
Mr. Kneedler: There is harm, because the employee was not told of what the -- of what the terms of his -- of his deal were.
Justice Ruth Bader Ginsburg: Mr. Kneedler--
Mr. Kneedler: He goes to work every day expecting to earn his wages and expecting to earn the -- the benefits set forth in the SPD.
Justice Ruth Bader Ginsburg: --Do you put -- do you put any weight on Congress insisting that the summary that each -- each participant get a copy of that summary, but there is no such requirement with respect to the plan?
Mr. Kneedler: --That's -- that is critical to our position, and again, the insurance/certificate of insurance analogy, it is all the same reasons that we say under ERISA; that that's the only document that is given, it's given for the obvious purpose of -- of telling the employee the essential aspects of the deal that he's going to get, and ERISA identifies, itemizes what they are and requires that the plan administrator not -- not minimize what they are.
Justice Antonin Scalia: So it can't -- can't amend the plan contrary to what we said.
Mr. Kneedler: It's not an amendment to the plan.
Justice Antonin Scalia: It's not an amendment?
Mr. Kneedler: The SPD -- the SPD is part of the plan, and it is--
Justice Antonin Scalia: Well, wait -- wait.
It's part of the plan.
But the other part of the plan contradicts this part of it.
And -- and you say it is this part, the SPD, that governs; which means it amends the prior part, right?
Mr. Kneedler: --It -- it -- it controls.
Justice Antonin Scalia: Oh, all right, okay.
We will say it controls.
Does that make you feel better about it?
Mr. Kneedler: --Well, that -- that's the explanation--
Justice Stephen G. Breyer: --Does it control when it's less favorable?
Mr. Kneedler: --It does not.
Justice Stephen G. Breyer: It only controls when it's more favorable, but not when it's less favorable.
Mr. Kneedler: --Because--
Justice Stephen G. Breyer: What theory of contract law gets you to that conclusion?
Mr. Kneedler: --Because you have two different documents that may be part of the contract.
It's an effort to find out what the deal is.
Under the insurance cases that I mentioned, what the courts says -- what the courts say is the certificate becomes part of the contract; but those cases also say when the -- when the plan is more favorable, that the plan governs because that -- under ERISA, that is the operative plan document that the administrator is supposed to operate under day to day.
Chief Justice John G. Roberts: Thank you, Mr. Kneedler.
Mr. Olson, you have four minutes remaining.
REBUTTAL ARGUMENT OF THEODORE B. OLSON ON BEHALF OF THE PETITIONERS
Mr. Olson: Thank you, Mr. Chief Justice.
I would like refer first of all to what Respondents said in response to a question from you, Justice Breyer, about section 204(g).
Justice Stephen G. Breyer: (j).
Mr. Olson: --Well, (g), I'm talking about that's what they -- I refer you to page 212 of the cert petition appendix under Roman numeral VI where the district court specifically said: Plaintiffs also seek to assert their claim under ERISA's anti-cutback provision 204(g), that claim has been rejected in the liability decision.
That claim was raised; it was rejected in the liability decision.
It's not here anymore.
Section -- the real section that the Court should refer to in 204, is 204 -- 8 -- (h)(6)(A) of ERISA; and I can't point to the portion of the appendix, but that was an addition by Congress in 2001 to a -- deal with egregiously inaccurate notices of changes.
That -- and Congress amended ERISA in 2001, added that provision, and said, if there's an egregious violation of that provision, then you get all the benefits that you should have gotten.
That's what Congress can do if it wishes to do.
That's what is being sought in this case.
Congress can take care of this if it wishes, but Congress enacted a carefully reticulated scheme; you are either suing for benefits under the plan or you are suing for violations of ERISA.
Justice Antonin Scalia: Why didn't that (h) apply here?
Was it not egregious enough?
Is that -- is that why it didn't apply?
Or they just forgot about it or what?
Mr. Olson: I -- I don't think that the -- the notice that was involved was referring to the SPD.
The SPD to the extent that it violates ERISA, there is a remedy that still exists, Congress hasn't changed.
It's in (a)(3).
It must be an equitable remedy.
You can seek an injunction.
And to the extent the Court is concerned that that's an empty remedy, that that's not a sufficient remedy, that's what Congress decided; and we referred in footnote 3 of our reply brief of a number of cases that -- that circuit courts have handled demonstrating detrimental reliance and providing for remedies.
Justice Stephen G. Breyer: Yes, but I still have the same question Justice Scalia had, which is why didn't this (h) thing apply here, because they didn't have, their claim, the notice wasn't good, and if the notice wasn't good then the plan didn't change, and if the plan didn't change they should have gotten the money.
Why didn't it apply?
Mr. Olson: That provision applies to the SPD and they did not bring that case.
Justice Antonin Scalia: Why didn't it apply to the SPD, isn't that a notice?
Mr. Olson: I think it's a different type of notice.
Justice Samuel Alito: Well, there was a notice, wasn't there?
Mr. Olson: There was a notice.
Justice Samuel Alito: And is the claim based on that or is it based on the SPD?
Mr. Olson: The claim is based upon the SPD and the district court decided that the SPD had amended the plan and that's inconsistent with what the statute provides.
Justice Elena Kagan: Mr. Olson, on your view of showing detrimental reliance, I take it you would require each employee to come forward and say yes, I read this SPD, is that correct?
Mr. Olson: Yes.
And trust law--
Justice Elena Kagan: And doesn't that really misunderstand the realities of the workplace?
Very few people read their SPDs, but you only need one person to read the SPD to come in and say, by the way, folks, 21,000 of us are not getting our retirement benefits for the next few years, and within a day every employee in the workplace is going to know about that.
So doesn't this give an incredible windfall to your client, Cigna, or to other companies that commit this kind of intentional misconduct if you hold them to this detrimental reliance standard?
Mr. Olson: --The -- I refer to what Justice Kennedy was referring to.
To the extent we are talking about trust law, we are talking about the requirement of a loss.
I would say that a person would not necessarily have to have read the SPD, but to have been aware of it and taken some steps in connection with it.
And that's the evidence that would have to be established, and every court has said that under (a)(3) equity requires detrimental reliance.
Chief Justice John G. Roberts: Thank you, Mr. Olson.
The case is submitted.
Justice Stephen G. Breyer: This is a ERISA pension case which means it's pretty complicated.
But in the case, petitioner was a company called CIGNA runs a pension plan for its employees and the plan is governed by ERISA, the Employment Retirement Security Act of 18 -- 1974.
Now under ERISA, participants in a pension plan are entitled to get periodic summaries of their benefits and obligations.
In 1997, CIGNA decided to change its pension plan and it sent notices to the plan participants but the notices omitted certain key details about reductions of the rate that employees would accrue benefits in the future.
And in particular, it -- they -- CIGNA did not tell its employees that -- because of a mathematical core of a certain kind, the way in which the -- they were going to calculate those benefits.
Those employees could work many years without accruing any additional benefits.
After the bench trial, the District Court found that CIGNA's disclosures violated ERISA.
So, there's a violation, but what's the remedy?
CIGNA claimed that there is no remedy unless the participants proved that they relied upon the misstatements to their detriment.
The District Court found there could be a remedy.
If the false disclosures resulted in likely harm to the plan participants and it said, "Well, the participants here can get -- recover the benefits because -- under a remedy provision, 502(a)(1)(B)", which I'm going to call remedy prong one.
That prong one permits the participant, “to recover benefits due to him under the terms of the plan.”
So, the Second Circuit affirmed to get the remedy.
But we granted cert to determine what standard of harm the participants have to satisfy.
Is it as the District Court thought likely harm?
Or is it as CIGNA said reliance to ones detriment?
But we first found that we have to consider whether the District Court should have treated the summary benefit descriptions under remedy prong one.
Was this whole thing benefits due under the terms of the plan?
Well, so now what do we hold?
Well, in a sense we hold that that prong one, benefits due under the plan in this case is the wrong prong.
The District Court's remedy consisted of two steps.
The first step was to reform the terms of the plan to comport with the summary documents.
The second was to make CIGNA enforce the plan as it was rewritten.
Now that second step is certainly part of enforcing the plan benefits but we don't see how changing the plan can be part of -- in giving them the benefits due under the plan.
So where does the District Court get the authority to do that?
Well, the failure of the District Court to bring us remedy within prong one does not mean that the participants are necessarily out of luck.
That's because there's another remedial provision, 502(a)(3) called prong two and that permits the participants to obtain, “other appropriate equitable relief to redress ERISA violations.”
The District Court thought that that relief was unavailable but we disagree.
Under one of our earlier cases called Mertens, the phrase appropriate equitable relief refers to those categories of relief that before the merger of law and equity were typically available in equity.
And so we looked it up and we found that there are at least three remedies here from equity, consistent with what the District Court did.
It might satisfy the standard.
Courts in equity use to reform an instrument to reflect the parties' mutual intent.
They used to be able to stop a party from benefiting from its factor misrepresentations.
And they used to be able to surcharge awarding money damages against the trustee for a breach of his duty.
We'll leave it to the District Court to determine which if any of these remedies is appropriate in light of the facts of this case and that leaves us with the question we initially agreed to decide, whether showing of likely harm is sufficient under ERISA.
For purposes of this prong two, we conclude that the standard of prejudice that applies must be the standard -- the same standard that would've applied to the particular (Inaudible) -- equitable remedy that's imposed.
For example, detrimental reliance would've been and it would be required for relief based on the equitable remedy of the estoppel as it used to be in the Court of equity.
But, its only a showing of actual harm would've been necessary for relief based on the equitable remedy of surcharge for these reasons and those given at even greater length.
In our opinion filed today, we vacate the judgment of the Second Circuit and we remand for further proceeds.
Justice Scalia has filed an opinion concurring in the judgment in which Justice Thomas joins.
Justice Sotomayor took no part in the consideration or decision of this case.