CIGNA Corp. v. Amara
The Court ruled that the ERISA provision letting employees sue to recover benefits owed "under the terms of" a pension plan does not let a judge rewrite those terms in the first place -- it only lets a judge enforce them.
But the Court found a different ERISA provision, which allows "appropriate equitable relief," can support the kind of relief the trial judge ordered, including reforming the plan and requiring payment. It sent the case back so the trial court can decide, under that provision, what employees must show to prove they were harmed by CIGNA's misleading disclosures.
“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.”
Explaining why reforming CIGNA's plan counts as a traditional equitable remedy.
How it got here: A federal trial court found CIGNA's disclosures violated ERISA, reformed the plan's terms, and ordered CIGNA to pay accordingly; the Second Circuit affirmed, and CIGNA sought Supreme Court review.
The Case in Depth
What happened
CIGNA switched its pension plan in 1998 from a traditional annuity plan to a cash-balance plan, converting employees' already-earned benefits into an opening account balance. Employees claimed CIGNA's disclosures about the switch were misleading and understated how much some employees would lose, particularly regarding early-retirement benefits, survivor benefits, and interest-rate risk. About 25,000 beneficiaries sued CIGNA over the inadequate notice.
The question before the Court
Could a federal judge rewrite the terms of CIGNA's pension plan and order it to pay benefits based on that rewrite, using the ERISA provision that lets participants sue to "recover benefits due" under a plan?
The Court's answer
No -- the Court ruled that the ERISA provision allowing suits to "recover benefits due... under the terms of" a plan only lets a court enforce a plan's existing terms, not rewrite them. That provision doesn't authorize a judge to reform the plan itself, and the disclosures CIGNA gave employees (called summary plan descriptions) are not themselves part of the plan's binding terms, even when the same company both wrote the plan and prepared the summaries.
However, the Court found that a different ERISA provision -- allowing "appropriate equitable relief" -- can support the kind of remedy the trial court ordered, because reforming a plan, holding a company to its promises, and ordering payment for a breach of duty all resemble traditional remedies once available only in courts of equity. The trial court must now decide, on remand, which equitable remedy applies and what showing of harm that remedy requires.
Curious how the Court got there? See the step-by-step legal reasoning →
Why it matters
Millions of workers covered by employer pension and benefit plans rely on plain-language summaries to understand their retirement benefits. This decision clarifies that those summaries aren't legally binding "plan terms," but it also confirms that employees misled by inaccurate summaries can still seek money and other remedies through equitable claims, without always having to prove they personally relied on the bad information.
What changes now
The case returns to the trial court, which must decide in the first instance whether to grant relief under the equitable-relief provision and, if so, which specific equitable remedy -- reformation, estoppel, or surcharge -- fits the facts, and what standard of harm that remedy requires. This is a final ruling on the legal questions presented, but it is not the end of the underlying lawsuit, since the trial court's remedy decision on remand could still be appealed again.
What this does not decide
The Court did not decide which specific equitable remedy the employees are entitled to, whether they can actually prove the harm required for any of those remedies, or whether class-wide relief remains appropriate. It also did not hold that plan summaries are legally meaningless -- only that they are not binding "plan terms" for purposes of the benefits-recovery provision.
Concurrences and dissents
Concurrence — Justice Scalia
Justice Scalia, joined by Justice Thomas, agreed that summary plan descriptions are not part of the plan and cannot support relief under the benefits-recovery provision, but objected that the majority went further than necessary. He argued the district court never decided whether equitable relief was available under the other ERISA provision, so the Court's extensive discussion of reformation, estoppel, and surcharge is nonbinding dicta that risks misleading the lower courts on remand.
How the Court got there
The legal reasoning, step by step
- The Court first asked whether ERISA's benefits-recovery provision, which lets a participant sue to 'recover benefits due... under the terms of his plan,' gave the trial court power to change the plan's terms rather than simply enforce them as written.
- Because that provision's language speaks only of enforcing existing terms, the Court concluded it does not authorize a court to reform, or rewrite, a plan -- reforming a contract is a different kind of remedy than simply applying the contract as written.
- The Court also rejected the government's argument that the plan's written summaries (called summary plan descriptions) count as binding plan terms themselves, reasoning that ERISA treats the people who write a plan (the sponsor) and the people who explain it to employees (the administrator) as distinct roles, and treating summaries as binding terms would undercut their purpose of being simple and readable.
- Having ruled out the benefits-recovery provision, the Court turned to ERISA's separate provision allowing 'appropriate equitable relief,' which this Court has read to mean only the kinds of remedies that were traditionally available in courts of equity -- as opposed to courts of law -- before the two court systems merged.
- The Court found that reforming a plan's terms to fix misleading information, holding a company to promises it made (similar to the doctrine of estoppel), and ordering payment for a breach of duty owed to a trust beneficiary (called surcharge) are all remedies with deep roots in equity courts, so all three are available under the equitable-relief provision.
- The Court then held that equity law does not require employees to prove they personally and detrimentally relied on the misleading information in every case; that stricter showing applies only when a court uses the specific remedy of estoppel, while remedies like reformation or surcharge require only proof of actual harm and a causal connection to the ERISA violation.
Doctrinal impact
Cases affected by this decision
Distinguishes Mertens v. Hewitt Associates (508 U. S. 248)
Unlike the nonfiduciary defendant in Mertens, CIGNA acted like a trustee, so the earlier limits on equitable relief did not bar surcharge here.
Distinguishes Great-West Life & Annuity Ins. Co. v. Knudson (534 U. S. 204)
That case involved recovering specific settlement funds, unlike the trust-like relief sought here, so its restrictive rule did not control.
Reaffirms Sereboff v. Mid Atlantic Medical Services, Inc. (547 U. S. 356)
The Court relied on Sereboff's test that equitable relief means only remedies traditionally available in equity courts.