CIGNA v. Amara: Supreme Court Unconvincingly Rejects Use of ERISA §502(a)(1)(B) to Enforce Benefit Terms Used in SPD

Abstract

The Supreme Court’s apparent holding that ERISA §502(a)(1)(B) is generally inapplicable to cases where summary documents conflict with formal plan documents bears little scrutiny. This apparent result raises at least four serious questions. First, did the Court intend to reach this broad conclusion? Second, did the Court develop the apparent conclusion in a manner that incorrectly characterizes the ERISA requirements for summary documents? Third, did the Court develop the apparent conclusion in a manner that contradicts the very rulings that the Court cites? Fourth, did the Court develop was the apparent conclusion in a manner that misrepresents common ERISA practices?

The unconvincing nature of the Court’s reasoning matters for at least three reasons. First, the respect for Supreme Court decisions does not arise merely from their precedential value, which may be quite limited. Coherent decisions deserve and receive far more respect than incoherent ones. Second, if the lower courts raise substantial barriers to the reformation remedy under ERISA § 502(a)(3) advocated by the majority opinion, which remedy would authorize the same relief sought by Amara under ERISA § 502(a)(1)(B), the Supreme Court may reconsider whether to make such relief directly available by returning to its traditional practice of treating summary documents as among the governing instruments that determine the terms of ERISA plans. Third, the decision, fails to discuss how ERISA or governing plan instruments, such as the SPD, determine plan terms. This may cause courts to lose sight of the distinction between ERISA requirements that plan sponsors or fiduciaries can breach, such as the prohibition on the alienation of most pension benefits, and the rights that individuals may have to ERISA plan benefits, such as inalienable pension benefits, notwithstanding such breaches.

Keywords: ERISA, SPD, Governing Plan Instruments, Governing Plan Documents, Benefits, Claims, Pension, Welfare Benefit

JEL Classification: H89, J32,  J33, K31, K34, K49, G23, M52