Yesterday, the Second Circuit ruled on two important issues of note for ERISA plan sponsors and plan fiduciaries.

In Thurber v. Aetna Life Insurance Co., 2013 WL 950704 (2d Cir. Mar. 13, 2013), the Court ruled that participants and beneficiaries are not required to be put on notice that:

  • the plan fiduciary has reserved discretion to interpret the plan terms, and 
  • judicial review of these decisions will be based on an arbitrary and capricious standard of review. 

Separately, the Court ruled that Aetna’s counterclaim seeking reimbursement of benefit overpayments was ”appropriate equitable relief” within the meaning of ERISA Section 502(a)(3).  In so ruling, the Court positioned itself with the First and Third Circuits.  The Ninth Circuit continues to stand alone on this issue in concluding that these types of claims do not seek ”appropriate equitable relief.”  Interestingly, the Court closed its opinion by stating: ”We note in closing that the distinction between claims based in law and those sounding in equity is often fine. In close cases, our inclination is to favor judicial efficiency by allowing ERISA insurers to bring responsive claims in ongoing federal actions, rather than forcing the parties to litigate two actions, one in federal court and one in state court, unnecessarily.” 

It remains to be seen whether the Court’s “inclination” is an indication that it in fact will begin to take a more expansive reading of “appropriate equitable relief.”