In Rose v. PSA Airlines, Inc., No. 21-2207, __F.4th__, 2023 WL 5839282 (4th Cir. Sept. 12, 2023), a dispute involving the wrongful denial of a health insurance claim, the Fourth Circuit answered the question of whether and under what conditions a plaintiff may seek monetary relief under ERISA § 502(a)(1)(B) and § 502(a)(3). The court held that the estate of the plan participant who passed away after being denied a heart transplant could not recover the monetary cost of the denied surgery because ERISA § 502(a)(1)(B) only allowed the beneficiary to recover benefits due under the terms of the health plan. The court also held that relief under an unjust enrichment theory may qualify as equitable relief under ERISA § 502(a)(3) but a remand was required for the district court to determine in the first instance whether the plaintiff plausibly stated facts that would entitle her to relief.
The facts of this case are quite unfortunate. Plaintiff Jody Rose’s son, Kyree, worked as a flight attendant for PSA Airlines and was a participant in its self-funded health plan. At the age of 26, Kyree was diagnosed with myocarditis and his doctors determined that he needed a heart transplant to survive. The companies providing administrative services for the plan (collectively, defendants) denied the claim multiple times. When his condition became dire, Kyree’s doctors sought an “expedited” external claim review, which was conducted by MCMC, LLC. Though MCMC was supposed to decide the review in 72 hours, it took over a week to finally overturn the previous claim denials. Kyree died five days after a decision should have been rendered. Rose sued defendants for a wrongful denial of benefits under ERISA § 502(a)(1)(B) and, in the alternative, for a breach of fiduciary duty under § 502(a)(3). The district court granted the defendants’ motion to dismiss both claims under Rule 12(b)(6).
The Fourth Circuit agreed with the district court that Rose’s ERISA § 502(a)(1)(B) fails because this provision provides a plaintiff with either reimbursement of plan benefits that they paid out-of-pocket or an injunction to force the plan provider to give the treatment. This provision does not authorize a plaintiff to seek the monetary cost of a benefit that was never provided. This is because the statutory language speaks only of enforcing the terms of the plan, not changing them.
The court then considered whether Rose is entitled to relief under § 502(a)(3)’s “catchall” provision which allows a plan beneficiary to obtain “other appropriate equitable relief” to either enforce or remedy violations of the terms of a plan or ERISA. The court asked: Does relief in the form of the monetary cost of the surgery constitute “equitable relief” under ERISA? The court answered this question in the affirmative: subject to certain limits—monetary relief based on a defendant’s unjust enrichment can be “equitable.” The court explained that plaintiffs can get monetary relief under §502(a)(3) only if such relief was “typically available in equity.” The court, disagreeing with dicta in CIGNA Corp. v. Amara, 563 U.S. 421, 436, 131 S.Ct. 1866, 179 L.Ed.2d 843 (2011) and prior panel decisions of McCravy v. Metropolitan Life Ins. Co., 690 F.3d 176 (4th Cir. 2012) and Peters v. Aetna, Inc., 2 F.4th 199, 216 (4th Cir. 2021), said the surcharge remedy for cases within the exclusive jurisdiction of equity courts, such as suits for breach of trust, were not “typically” available in equity. “In short: A plaintiff can recover money under § 502(a)(3) only if a court of equity could have awarded it in a concurrent-jurisdiction case, and a court of equity could award money when a plaintiff pointed to specific funds that he rightfully owned but that the defendant possessed as a result of unjust enrichment.” The court justified departing from Peters and McCravy because they are inconsistent with Supreme Court authority. While Rose cannot get monetary relief, relief may be awarded under an unjust-enrichment theory. The case is remanded to the district court to determine whether she can plausibly allege such a claim.
*Please note that this blog is a summary of a reported legal decision and does not constitute legal advice. This blog has not been updated to note any subsequent change in status, including whether a decision is reconsidered or vacated. The case above was handled by other law firms, but if you have questions about how the developing law impacts your ERISA benefit claim, the attorneys at Roberts Disability Law, P.C. may be able to advise you so please contact us.
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