18‐487‐cv
Laurent v. PricewaterhouseCoopers LLP



                             UNITED STATES COURT OF APPEALS
                                 FOR THE SECOND CIRCUIT


                                         August Term 2019

            (Submitted: October 23, 2019               Decided: December 23, 2019)

                                        Docket No. 18‐487‐cv


    TIMOTHY D. LAURENT AND SMEETA SHARON, on behalf of themselves and all
                         others similarly situated,

                                                      Plaintiffs‐Appellants,

                                                 v.

                     PRICEWATERHOUSECOOPERS LLP,
                 THE RETIREMENT BENEFIT ACCUMULATION
          PLAN FOR EMPLOYEES OF PRICEWATERHOUSECOOPERS LLP,
        THE ADMINISTRATIVE COMMITTEE TO THE RETIREMENT BENEFIT
    ACCUMULATION PLAN FOR EMPLOYEES OF PRICEWATERHOUSECOOPERS LLP,

                                                      Defendants‐Appellees. *


                  ON APPEAL FROM THE UNITED STATES DISTRICT COURT
                      FOR THE SOUTHERN DISTRICT OF NEW YORK




*     The Clerk of the Court is respectfully directed to amend the official caption to
conform to the above.
Before:
          KATZMANN, Chief Judge, and CHIN and DRONEY, Circuit Judges.



            Appeal from a judgment of the United States District Court for the

Southern District of New York (Oetken, J.) dismissing plaintiffs‐appellantsʹ

claims alleging that the terms of their employee retirement benefits plan violated

the Employment Retirement Income Security Act, 29 U.S.C. § 1001 et seq. In a

prior appeal, we affirmed the district courtʹs holding that the plan violated the

statute, and we remanded for the district court to consider the appropriate relief.

On remand, however, defendants‐appellees moved for judgment on the

pleadings pursuant to Federal Rule of Civil Procedure 12(c), contending that the

relief requested by plaintiffs‐appellants ‐‐ reformation of the plan and the

recalculation of benefits in accordance with the reformed plan ‐‐ was unavailable

as a matter of law. The district court agreed.

            VACATED AND REMANDED.




                         JULIA PENNY CLARK, Bredhoff & Kaiser, PLLC,
                               Washington, DC (Eli Gottesdiener, Gottesdiener
                               Law Firm, PLLC, Brooklyn, New York, on the
                               brief), for Plaintiffs‐Appellants.


                                        ‐2‐
                         DANIEL J. THOMASCH (Richard W. Mark, Amer S.
                               Ahmed, and Alejandro A. Herrera, on the brief),
                               Gibson, Dunn & Crutcher LLP, New York, New
                               York, for Defendants‐Appellees.


                         BRENDAN BALLARD, Trial Attorney (Kate OʹScannlain,
                               Solicitor of Labor, G. William Scott, Assistant
                               Solicitor for Plan Benefits Security, and Thomas
                               Tso, Counsel for Appellate and Special Litigation,
                               on the brief), U.S. Department of Labor,
                               Washington, D.C., for Amicus Curiae U.S. Secretary
                               of Labor.


                         Brian T. Burgess, William M. Jay, Jaime A. Santos, James
                               O. Fleckner, and Alison V. Douglass, Goodwin
                               Procter LLP, Washington, D.C. and Boston,
                               Massachusetts, and Steven P. Lehotsky, U.S.
                               Chamber Litigation Center, Washington, D.C., for
                               Amicus Curiae Chamber of Commerce of the United
                               States of America, the American Benefits Council, the
                               Business Roundtable, and the ERISA Industry
                               Committee.
                                             ___________

CHIN, Circuit Judge:

             Plaintiffs‐appellants Timothy D. Laurent and Smeeta Sharon

(ʺPlaintiffsʺ), on behalf of themselves and similarly situated former employees of

defendant‐appellee PricewaterhouseCoopers LLP (ʺPwCʺ), brought this action in

2006 alleging that their retirement plan ‐‐ the ʺRetirement Benefit Accumulation


                                       ‐3‐
Plan for Employees of PricewaterhouseCoopers LLPʺ (the ʺPlanʺ) ‐‐ violated the

Employee Retirement Income Security Act (ʺERISAʺ), 29 U.S.C. § 1001 et seq. In a

series of decisions, three different district judges (Mukasey, Daniels, and Oetken,

JJ.) held that the Plan violated ERISA. See Laurent v. PricewaterhouseCoopers LLP,

794 F.3d 272, 278 (2d Cir. 2015) (ʺLaurent Vʺ). In 2015, on PwCʹs interlocutory

appeal, we agreed, holding that ʺthe [P]lanʹs definition of ʹnormal retirement ageʹ

as five years of service violates [ERISA] . . . because it bears no plausible relation

to ʹnormal retirement.ʹʺ Id. at 273. Because the district court had not addressed

ʺthe appropriate relief,ʺ we remanded for ʺthe district court to consider that

question in the first instance.ʺ Id. at 289.

             On remand, however, PwC moved for judgment on the pleadings,

arguing that ERISA did not authorize the relief sought by Plaintiffs ‐‐

reformation of the Plan to bring it into compliance with ERISA and the

recalculation of benefits in accordance with the reformed Plan. The district court

agreed, holding that ERISA did not authorize the recalculation of benefits in the

circumstances here, and dismissed the Second Amended Complaint (the ʺSACʺ)

with prejudice on that basis, notwithstanding the violation of ERISA.




                                          ‐4‐
               Plaintiffs appeal, contending that the district court erred in granting

PwCʹs motion because ERISA does in fact authorize the relief they sought. We

agree, and for the reasons detailed below, we VACATE the judgment and

REMAND for further proceedings consistent with this Opinion.1

                                       BACKGROUND

I.     The Plan

               The Plan is a cash balance plan subject to regulation under both

ERISA and the Internal Revenue Code. In 1996, the Internal Revenue Service

announced its position that where a cash balance plan permits participants to

take benefits before normal retirement age (ʺNRAʺ) in the form of a lump‐sum

and promises future credits, the plan must: (1) project the participantʹs account

balance out to the participantʹs NRA and add an amount reflecting the value of

the future interest credits that would have accrued had the account balance

remained in the plan until that future date; and (2) discount that projected total

back to the distribution date using the planʹs discount rate, as limited by a

statutory maximum. I.R.S. Notice 96‐8, 1996‐1 C.B. 359. This calculation is




1      Plaintiffs also argue on appeal that the district court exceeded the scope of this Courtʹs
mandate in reaching PwCʹs argument that no relief was available under ERISA. Because we
hold that Plaintiffs prevail on the merits, we do not reach the issue of the scope of the mandate.
                                               ‐5‐
known as the whipsaw calculation. See Esden v. Bank of Bos., 229 F.3d 154, 159 (2d

Cir. 2000); see also Laurent v. PricewaterhouseCoopers LLP, 448 F. Supp. 2d 537, 544

(S.D.N.Y. 2006) (ʺLaurent Iʺ) (ʺIt is the forward projecting and discounting back

that accounts for the whipsaw terminology.ʺ).2 ʺʹ[W]hipsaw paymentsʹ . . .

guarantee that plan participants who take distributions in the form of a lump

sum when they terminate employment will receive the actuarial equivalent of the

value of their accounts at retirement.ʺ Laurent V, 794 F.3d at 273.

              The Plan provides that when a vested employee leaves employment,

she has the option of receiving (1) an annuity commencing at NRA or (2) an

immediate lump‐sum payment. Id. at 275. The present value of the lump‐sum

payment must be worth at least as much as the value of the stream of income

from the annuity commencing at normal retirement age. Id.; see Esden, 229 F.3d

at 163. In other words, if a plan offers participants a lump‐sum distribution, it

ʺcannot deprive the participants of the value that would accrue if the participants

waited and took their distributions as an annuity at normal retirement age.ʺ




2       ERISA was amended in 2006 by the Pension Protection Act of 2006, Pub. L. No. 109‐280,
§ 701(a)(2), 120 Stat. 780 (2006) (the ʺPPAʺ), which eliminated the whipsaw calculation
requirement for participants in cash balance benefit plans who elect lump‐sum distributions.
The parties agree, however, that the PPA does not apply to this case because the conduct at
issue pre‐dates the PPA.
                                            ‐6‐
Laurent V, 794 F.3d at 275. The whipsaw calculation is used to determine the

difference between the ʺvalue of a cash balance plan account at any given time

and the value of the account as an annuity payable at [NRA].ʺ Id.

             Here, as the district court and this Court have held, the Plan violates

ERISA in at least one respect. It defines ʺNormal Retirement Ageʺ as ʺ[t]he earlier

of the date a Participant attains age 65 or completes five (5) Years of Service.ʺ J.

Appʹx at 1028 (emphasis added). As we concluded in Laurent V, ERISA does not

give an employer ʺboundless discretionʺ to set any period of time as the NRA;

rather, a planʹs NRA ʺmust have some reasonable relationship to the age at

which participants would normally retire.ʺ 794 F.3d at 281. We held that five

years of service was not a ʺnormal retirement age.ʺ Id. at 289.

             Moreover, as PwC does not dispute for the purposes of this appeal,

the Planʹs use of the 30‐year Treasury rate as the projection rate is improper

because it understates future interest credits. See Laurent v.

PricewaterhouseCoopers LLP, No. 06‐CV‐2280 (JPO), 2017 WL 3142067, at *4 & n.5

(S.D.N.Y. July 24, 2017) (ʺLaurent VIʺ); ERISA § 204(c)(3). Indeed, the Internal

Revenue Service concluded that the Plan ʺcredits the accounts using one interest




                                          ‐7‐
rate structureʺ ‐‐ based on equity rates of return ‐‐ ʺand projects them to Normal

Retirement Age using anotherʺ ‐‐ the 30‐year Treasury rate. J. Appʹx at 1195.

II.   Procedural History

             This case has a long procedural history dating back to 2006.

Relevant here is that in 2013, PwC moved to dismiss the SAC, arguing, inter alia,

that the Planʹs ʺfive years of serviceʺ NRA was valid as a matter of law. In a

decision issued August 8, 2013, the district court rejected PwCʹs argument and

held that the Planʹs NRA violated ERISA because ʺfive years of serviceʺ is not an

ʺageʺ under ERISA. See Laurent v. PriceWaterhouseCoopers LLP, 963 F. Supp. 2d

310, 321 (S.D.N.Y. 2013) (ʺLaurent IVʺ).

             Following Laurent IV, PwC petitioned for interlocutory appeal and

plaintiffs moved to certify the class. On January 22, 2014, the district court

certified Laurent IV for interlocutory appeal and on April 22, 2014, this Court

granted the petition. On June 26, 2014, while the interlocutory appeal was

pending, the district court granted Plaintiffsʹ motion for class certification on the

counts asserting ʺwhipsawʺ claims seeking lump‐sum distributions equal to the

annuity payable at NRA.




                                           ‐8‐
             In an opinion issued on July 23, 2015, this Court affirmed the district

courtʹs order denying PwCʹs motion to dismiss. See Laurent V, 794 F.3d at 273.

Although we disagreed with the district courtʹs reasoning, we agreed that the

Planʹs method of calculating the NRA was unlawful because it ʺbears no

plausible relation to ʹnormal retirement,ʹ and is therefore inconsistent with the

plain meaning of the statute,ʺ id., and affirmed on that ground alone. We then

remanded for the district court to determine the proper remedy. Id. at 289. In a

footnote, we also noted:

             Since ERISA grants a private cause of action to enforce,
             inter alia, the terms of the plan, 29 U.S.C. § 1132(a)(3),
             PwC may be compelled to ʹact in accordance with the
             documents and instruments governing the plan insofar
             as they accord with the statute.ʹ

Id. at 289 n.19 (quoting US Airways, Inc. v. McCutchen, 569 U.S. 88, 100 (2013)).

             On remand, following seven months of additional discovery, PwC

moved for judgment on the pleadings pursuant to Federal Rule of Civil

Procedure 12(c), arguing that Plaintiffs were not entitled to relief for their ERISA

claims. Plaintiffs opposed the motion as untimely and a violation of the mandate

rule, see, e.g., United States v. Ben Zvi, 242 F.3d 89, 95 (2d Cir. 2001), and cross‐

moved for summary judgment pursuant to Rule 56.



                                          ‐9‐
             The district court granted PwCʹs motion and denied Plaintiffsʹ

motion. Laurent VI, 2017 WL 3142067 at *1. The district court held that PwCʹs

motion was not untimely and that its arguments had not been waived, and it

held further that the Supreme Courtʹs holding in CIGNA Corp. v. Amara, 563 U.S.

421, 436 (2011) (ʺAmara IIIʺ), precluded it from reforming the Plan under ERISA

§ 502(a)(1)(B). Laurent VI, 2017 WL 3142067 at *4‐7. The district court also

rejected Plaintiffsʹ argument that they could obtain an equitable remedy under §

502(a)(3). Laurent VI, 2017 WL 3142067 at *7‐9.

             First, the district court concluded that there was no breach of

fiduciary duty because the Plan administrator was not acting in his fiduciary

capacity when he distributed benefits in accordance with the Plan. Id. at *8.

Second, the district court held that equitable reformation of the Plan was not

available here because there was no allegation of fraud or mutual mistake.

Finally, the district court found unpersuasive Plaintiffsʹ ʺattempt to restyleʺ the

requested relief as seeking ʺan accounting for profit, surcharge, or unjust

enrichment, or a constructive trust.ʺ Id. at *8‐9. Because Plaintiffsʹ requested

remedy, in its view, was ʺat bottom . . . a legal claim for money damages,ʺ id. at




                                        ‐ 10 ‐
*9, the district court concluded that it was precluded under Mertens v. Hewitt

Assocs., 508 U.S. 248, 256 (2002).

             Plaintiffs subsequently moved for reconsideration, and then for

clarification of the district courtʹs order pursuant to Federal Rules of Civil

Procedure 60(a) and (b). The district court denied both motions.

             This appeal followed.

                                     DISCUSSION

             Plaintiffs argue on appeal that the following two‐step procedure is a

remedy authorized by ERISA:

             1.   An order . . . compelling Defendants to bring the terms and
             administration of the Plan into compliance with ERISA . . . ;

             2.     An order requiring Defendants to re‐calculate the benefits
             accrued and/or due under the terms of the Plan in accordance with
             the requirements of ERISA, and for the Plan to pay these amounts,
             plus interest, to or on behalf of all Class . . . members who received
             less in benefits or benefit accruals than the amount to which they are
             entitled.

Appellantʹs Br. at 9 (quoting Compl., Prayer for Relief ¶¶ E & F). Plaintiffs and

the Secretary of Labor (the ʺSecretaryʺ), as amicus curiae, contend that both Steps

1 and 2 are authorized by § 502(a)(1)(B) of ERISA. In the alternative, they




                                        ‐ 11 ‐
contend that Step 1 is authorized under § 502(a)(3) and that Step 2 is authorized

under § 502(a)(1)(B).3

I.     Standard of Review

               ʺWe review a judgment under Federal Rule of Civil Procedure 12(c)

de novo,ʺ accepting as true the allegations of the nonmovant and drawing all

reasonable inferences in its favor. Graziano v. Pataki, 689 F.3d 110, 114 (2d Cir.

2012). Where a judgment is premised on a question of statutory interpretation,

we similarly review that interpretation de novo. City of Syracuse v. Onondaga Cty.,

464 F.3d 297, 310 (2d Cir. 2006).

II.    ERISAʹs Remedial Provisions

               The civil enforcement provision of ERISA at issue in this case

provides, in relevant part:

               (a) Persons empowered to bring a civil action
                      A civil action may be brought‐‐



3       PwC also contends that Plaintiffs forfeited this ʺtwo‐stepʺ argument by failing to raise it
below. But Plaintiffs did ask for their two‐step remedy, albeit in their reply in support of their
motion for summary judgment. The district court never reached the argument not because it
deemed it forfeited ‐‐ indeed it had discretion to consider it, see Ruggiero v. Warner‐Lambert Co.,
424 F.3d 249, 252 (2d Cir. 2005) ‐‐ but because it determined PwC was entitled to judgment on
the pleadings and consequently did not reach Plaintiffsʹ request on the merits. In any event, we
are ʺnot limited to the particular legal theories advanced by the parties but rather retain[] the
independent power to identify and apply the proper construction of governing law.ʺ McDonald
v. Pension Plan of NYSA‐ILA Pension Tr. Fund, 320 F.3d 151, 160 (2d Cir. 2003) (quoting Kamen v.
Kemper Fin. Servs., 500 U.S. 90, 99 (1991)).
                                              ‐ 12 ‐
                   (1) by a participant or beneficiary‐‐

                          (A) for the relief provided for in subsection (c) of this
                          section, or

                          (B) to recover benefits due to him under the terms of his plan,
                          to enforce his rights under the terms of the plan, or to clarify
                          his rights to future benefits under the terms of the plan;

                   (2) by the Secretary, or by a participant, beneficiary or
                   fiduciary for appropriate relief under section 1109 of this title;

                   (3) by a participant, beneficiary, or fiduciary (A) to enjoin any act or
                   practice which violates any provision of this subchapter or the terms
                   of the plan, or (B) to obtain other appropriate equitable relief (i) to
                   redress such violations or (ii) to enforce any provisions of this
                   subchapter or the terms of the plan [] . . . .

29 U.S.C. § 1132(a) (emphasis added).

      A.    Section 502(a)(1)(B)

            The Supreme Court considered the limits of ERISA § 502(a)(1)(B) in

Amara III. Amara III involved a pension plan for CIGNA employees that,

although compliant with ERISA, differed from the summary plan description

previously provided to the planʹs participants. 563 U.S. at 428. After holding

that the discrepancy violated ERISAʹs notice requirements, the district court,

relying on § 502(a)(1)(B), reformed CIGNAʹs existing pension plan to match the

terms stated in the summary plan description. Id. at 434. CIGNA appealed and

the Supreme Court vacated, holding that § 502(a)(1)(B) did not authorize plan
                                         ‐ 13 ‐
reformation in this context. Id. at 435‐36. In reaching its holding, the Supreme

Court observed:

             Where does § 502(a)(1)(B) grant a court the power to
             change the terms of the plan as they previously existed?
             The statutory language speaks of ʹenforc[ing]ʹ the ʹterms
             of the plan,ʹ not of changing them. The provision
             allows a court to look outside the planʹs written
             language in deciding what those terms are, i.e., what the
             language means. But we have found nothing
             suggesting that the provision authorizes a court to alter
             those terms, at least not in present circumstances, where
             that change, akin to the reform of a contract, seems less
             like the simple enforcement of a contract as written and
             more like an equitable remedy.

Id. (citations and emphases omitted). Because modifying the CIGNA planʹs

terms to match the summary plan description went beyond ʺsimple

enforcement,ʺ the Court held it was not authorized by § 502(a)(1)(B). Id. at 436.

             Following Amara III, courts of appeals have construed § 502(a)(1)(B)

as limited to authorizing the enforcement of pension plans as written. See

Soehnlen v. Fleet Owners Ins. Fund, 844 F.3d 576, 583 n.2 (6th Cir. 2016); Singletary

v. United Parcel Serv., Inc., 828 F.3d 342, 349 (5th Cir. 2016); Pender v. Bank of

America Corp., 788 F.3d 354, 362 (4th Cir. 2015). This Court has done so as well in

a non‐precedential summary order. See Gill v. Bausch & Lomb Supplemental Ret.

Income Plan I, 594 F. Appʹx 696, 699 (2d Cir. 2014) (summary order) (ʺAmara [III]

                                          ‐ 14 ‐
instructs a district court to limit itself to ʹthe simple enforcement of a contract as

written.ʹʺ).

               The Seventh Circuit, by contrast, has affirmed two awards of

whipsaw benefits under § 502(a) following Amara III. See Ruppert v. Alliant

Energy Cash Balance Pension Plan, 2010 WL 5464196 (W.D. Wis. Dec. 29, 2010),

affʹd, 726 F.3d 936 (7th Cir. 2013); Thompson v. Ret. Plan for Emps. of S.C. Johnson &

Sons, Inc., 716 F. Supp. 2d 752 (E.D. Wis. 2010), affʹd in relevant part, 651 F.3d 600

(7th Cir. 2011). Neither affirmance, however, cites to Amara III and in both cases,

judgment had been entered in the plaintiffsʹ favor in the district court before

issuance of the Amara III decision.

       B.      Section 502(a)(3)

               ERISA § 502(a)(3) allows plan participants, beneficiaries, or

fiduciaries to bring civil actions to enjoin any act or practice that violates ERISA

or to obtain other ʺappropriate equitable reliefʺ to redress the violation. 29 U.S.C.

§ 1132(a)(3); see Mertens, 508 U.S. at 255. The Supreme Court has interpreted the

term ʺappropriate equitable reliefʺ as referring to ʺcategories of relief that,

traditionally speaking (i.e., prior to the merger of law and equity) were typically

available in equity.ʺ Amara III, 563 U.S. at 439 (internal quotation marks

omitted). Because ʺ[a] claim for money due and owing under a contract is
                                         ‐ 15 ‐
quintessentially an action at law,ʺ Great‐West Life & Annuity Ins. Co. v. Knudson,

534 U.S. 204, 210 (2002) (internal quotation marks omitted), money damage

awards are not available under § 502(a)(3). See id.; Mertens, 508 U.S. at 255.

             The Supreme Court also discussed § 502(a)(3) in Amara III. After

concluding that the relevant pension plan could not be reformed under

§ 502(a)(1)(B), the Supreme Court considered whether a remedy for the Amara

plaintiffs could instead be found in § 502(a)(3). 563 U.S. at 438. There, the

plaintiffs had argued that reformation was available as an equitable remedy for

fraud. The issue was whether this remedy required a showing of detrimental

reliance. In holding it did not, the Court hinted that courts should construe

remedies in equity available under § 502(a)(3) broadly, stating:

             we conclude that the standard of prejudice must be
             borrowed from equitable principles, as modified by the
             obligations and injuries identified by ERISA itself.
             Information‐related circumstances, violations, and
             injuries are potentially too various in nature to insist
             that harm must always meet that more vigorous
             ʺdetrimental harmʺ standard when equity imposed no
             such strict requirement.

Id. at 444‐45 (emphasis added).




                                        ‐ 16 ‐
      C.     Application

             Although we have previously affirmed the entry of a two‐step

reformation and enforcement remedy under ERISA, see Amara v. CIGNA Corp.,

775 F.3d 510, 532 (2d Cir. 2014) (ʺAmara Vʺ), we have not yet had occasion to

consider the availability of reformation to plaintiffs in circumstances such as

these, where the written terms of a pension plan indisputably violate ERISA, but

there is no allegation that the violation stems from traditional fraud, mistake, or

otherwise inequitable conduct. We nonetheless conclude that reformation of the

Plan was available here under ERISA § 502(a)(3), and that, consistent with our

precedent, the district court was then authorized to enforce the reformed Plan as

a second step under § 502(a)(1)(B).

             1.     Reformation under § 502(a)(3)

             ERISA authorizes reformation of the Plan because, by its plain

language, § 502(a)(3) authorizes participants and beneficiaries to ʺobtain . . .

equitable relief (i) to redress such violations or (ii) to enforce any provisions of

this subchapter or the terms of the plan.ʺ 29 U.S.C. § 1132(a)(3). Here, because

reformation is an equitable remedy and the Plan violated a ʺprovision[] of [the]




                                         ‐ 17 ‐
subchapterʺ ‐‐ specifically, ERISA § 3(24) ‐‐ we conclude that § 502(a)(3)

authorizes the district court to reform the Plan. Id.

              The district court reached a contrary conclusion because it

interpreted Mertens and its progeny as limiting the availability of equitable

remedies under § 502(a)(3) to the specific circumstances under which those

remedies were typically available in equity courts. Laurent VI, 2017 WL 3142067,

at *8 (ʺPlaintiffs do not allege mistake, fraud, or inequitable conduct here. . . .

Plaintiffs are therefore not entitled to relief in the form of judicial reformation

under ERISA § 502(a)(3).ʺ).4 But neither the statute nor Mertens imposes this

added requirement. Instead, § 502(a)(3) tells us that equitable remedies are

available to ʺredress violations ofʺ or ʺto enforce any provisions ofʺ ERISA

subchapter I. And Mertens holds only that remedies under § 502(a)(3) are limited

to ʺthose categories of relief that were typically available in equity (such as

injunction, mandamus, and restitution, but not compensatory damages).ʺ 508

U.S. at 256. Reformation is indisputably a typical and traditional form of



4        In finding that violations of subchapter I of ERISA themselves form the basis for a
district court to enter equitable remedies under § 502(a)(3), we do not hold that the violation
here could not, in itself, be construed as a form of fraud or mistake sufficient to warrant
reformation. Moreover, while we do not need to reach the issue, here PwC arguably engaged in
inequitable conduct ‐‐ deciding to use an unreasonable definition of NRA and applying two
different interest rates in an unfair manner.
                                            ‐ 18 ‐
equitable relief, see Simmons Creek Coal Co. v. Doran, 142 U.S. 417, 435 (1892); see

also Amara III, 563 U.S. at 440 (ʺThe power to reform contracts . . . is a traditional

power of an equity courtʺ), and is thus categorically available to a participant or

beneficiary to enforce violated provisions of ERISA.

             Even were we to find ambiguity in the statute, our holding finds

further support in the body of law that has developed around ERISA in this

context. The Supreme Court has instructed that when construing a remedy in

equity under ERISA § 502(a)(3), courts are to be guided by ʺequitable principles,

as modified by the obligations and injuries identified by ERISA itself.ʺ Amara III,

563 U.S. at 445. Admittedly, the Amara III Courtʹs discussion of § 502(a)(3) is

arguably dicta, see id. at 442 (noting that the Court ʺneed not decide which

remedies [were] appropriate . . . to resolve the partiesʹ disputeʺ). But our own

precedent too has identified ʺfraud, mutual mistake, or terms violative of ERISAʺ

as independent bases that justify the equitable remedy of reformation under

§ 502(a)(3). Nechis v. Oxford Health Plans, Inc., 421 F.3d 96, 103 (2d Cir. 2005)

(emphasis added).

             Moreover, the outcome advocated by PwC (and the Chamber of

Commerce and other amici curiae) ‐‐ that even where employees prove an ERISA



                                         ‐ 19 ‐
violation, they have no remedy ‐‐ is inconsistent with the ʺmaxim of equity . . .

that ʹ[e]quity suffers not a right to be without a remedy.ʹʺ Amara III, 563 U.S. at

440 (quoting R. Francis, Maxims of Equity 29 (1st Am. ed. 1823)). And the

Supreme Court has expressly identified § 502(a)(3) as occupying a special

ʺcatchallʺ remedial role in ERISAʹs statutory scheme, Varity Corp. v. Howe, 516

U.S. 489, 512 (1996), particularly in instances where other remedies for violations

of the statute may be unavailable. See id. at 515 (ʺ[Plaintiffs] must rely on the

third subsection or they have no remedy at all. We are not aware of any ERISA‐

related purpose that denial of a remedy would serve. Rather, we believe that

granting a remedy is consistent with the literal language of the statute, the Actʹs

purposes, and pre‐existing trust law.ʺ).

             We hold that § 502(a)(3) authorizes district courts to grant equitable

relief ‐‐ including reformation ‐‐ to remedy violations of subsection I of ERISA,

even in the absence of mistake, fraud, or other conduct traditionally considered

to be inequitable.

             2.      Enforcement under § 502(a)(1)(B)

             After concluding that reformation of the Plan is available to

Plaintiffs under § 502(a)(3), we have little trouble holding that the district courtʹs



                                        ‐ 20 ‐
authority to grant Step 2 of Plaintiffsʹ proposed remedy ‐‐ enforcement of the

reformed Plan under § 502(a)(1)(B) ‐‐ follows. As the Supreme Court noted in

Amara III, ʺequity often considered reformation a ʹpreparatory stepʹ that

ʹestablishes the real contract.ʹʺ 563 U.S. at 441 (quoting 4 Pomery, Equity

Jurisprudence § 1375, at 999). And indeed, we have already expressly affirmed a

two‐step remedy of reformation‐and‐enforcement in the post‐Amara III, ERISA

context. See Amara V, 775 F.3d at 532.

               PwC does not quarrel with our view that § 502(a)(3) is the proper

vehicle for enforcing violations of ERISA subsection I, or that enforcement of a

pension plan is authorized by § 502(a)(1)(B).5 But PwC does dispute our

authority under ERISA to enter Plaintiffsʹ two‐step remedy more generally,

arguing that at least one circuit has rejected this approach. See Eichorn v. AT&T

Corp., 484 F.3d 644, 654‐57 (3d Cir. 2007). To the extent that it is so, however,

Eichorn pre‐dates Amara III and contradicts our own precedent. And while PwC

points to controlling cases that limit the remedies available under both § 502(a)(3)



5       To the contrary, PwC has explicitly pointed to § 502(a)(3) as the provision upon which
current Plan participants may properly rely to sue for violations of the statute. See Appelleeʹs
Br. at 26; see also Tr. Oral Arg., J. Appʹx at 613 (ʺCan you sue to seek an injunction or reform it if
you were in the plan and you said I donʹt like the way this plan is set up, I donʹt think itʹs legal.
I want to go in. [Section] 502(a)(3) gives you a vehicle to do that.ʺ).


                                                ‐ 21 ‐
and § 502(a)(1)(B) independently, it is notable that none of those cases considers

the two provisions simultaneously. See, e.g., Mertens, 508 U.S. at 256‐58; Great‐

West, 534 U.S. at 209‐19. In the absence of controlling authority otherwise, we are

inclined to follow the Supreme Courtʹs express preference that violations of

ERISA should be remedied. See Varity Corp., 516 U.S. at 515; accord Esden, 229

F.3d at 177 (ʺUnder ERISA, to correct this lack of safeguards, Congress created

substantive rights for pension plan participants and expressly created private

causes of action in federal court to vindicate those rights.ʺ).

              As we have concluded that ERISA authorizes, in the circumstances

here, the two‐step remedy of reformation under § 502(a)(3) and enforcement

under § 502(a)(1)(B), we do not address Plaintiffsʹ alternative arguments for

relief. Nor do we address the nature of any reformation and consequent relief to

which Plaintiffs may be entitled, whether on their motion for summary judgment

or otherwise, leaving those questions to be resolved by the district court in the

first instance.




                                        ‐ 22 ‐
                                 CONCLUSION

            For the reasons set forth above, the judgment of the district court is

VACATED and the case is REMANDED for further proceedings consistent with

this Opinion.




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