On June 22, 2011, the Ninth Circuit overruled its prior precedent and held that a plan participant could sue an entity other than the plan or the plan administrator for benefits under ERISA section 502(a)(1)(B). Cyr v. Reliance Standard Life Insurance Company.
Laura Cyr was employed by Channel Technologies, Inc. (CTI) and was eligible to participate in the long-term disability benefit plan maintained by CTI and insured by Reliance Standard Life Insurance Company (Reliance). Although CTI was the official "plan administrator" for ERISA purposes, Reliance made all claims decisions under the plan. Cyr applied for, and was granted, long-term disability benefits under the plan based on her last salary of $85,000. Cyr later sued CTI for gender discrimination based on unequal pay and was awarded a retroactive salary adjustment to $155,000. Cyr requested that Reliance increase her long-term disability benefits based on her retroactively adjusted salary, but Reliance did not make the adjustment (there is some confusion regarding why the adjustment was not made; Reliance admitted that it lost Cyr's claim file).
Cyr sued Reliance, the plan and CTI as the plan administrator under ERISA section 502(a)(1)(B) for an increase in her long-term disability benefit based on her revised salary. Despite Ninth Circuit precedent to the contrary, the district court held that Reliance could be sued under this provision of ERISA even though it was not the plan or the plan administrator. The Ninth Circuit, reversing its prior precedent, agreed and held that potential liability under ERISA section 502(a)(1)(B) is not limited per se to the plan and the plan administrator, as long as the party being sued is a proper defendant and that party's individual liability can be established.