Gregory Gabriel v. Alaska Electrical Pension Fund ( 2014 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
GREGORY R. GABRIEL, No. 12-35458
Plaintiff-Appellant,
D.C. No.
v. 3:06-cv-00192-
TMB
ALASKA ELECTRICAL PENSION
FUND; TRUSTEES OF THE ALASKA
ELECTRICAL PENSION FUND; ORDER AND
PENSION ADMINISTRATIVE OPINION
COMMITTEE OF THE ALASKA
ELECTRICAL PENSION FUND;
APPEALS COMMITTEE OF THE
ALASKA ELECTRICAL PENSION
FUND; GREGORY STOKES; GARY
BROOKS; STEVE BOYD; JOHN
GIUCHICI; CHERESA MACLEOD;
SCOTT BRINGMANN; DAVID CARLE;
JIM FULLFORD; MARY TESCH;
KNUTE ANDERSON; MIKE BAVARD;
LARRY BELL; VINCE BELTRAMI,
Defendants-Appellees.
Appeal from the United States District Court
for the District of Alaska
Timothy M. Burgess, District Judge, Presiding
Argued and Submitted
August 14, 2013—Anchorage, Alaska
2 GABRIEL V. AEPF
Opinion filed: June 6, 2014
Opinion withdrawn and new Opinion filed: December 16,
2014
Before: Alex Kozinski, Marsha S. Berzon,
and Sandra S. Ikuta, Circuit Judges.
Order;
Opinion by Judge Ikuta;
Concurrence by Judge Kozinski
SUMMARY*
Employee Retirement Income Security Act
The panel withdrew its prior opinion, denied petitions for
rehearing and rehearing en banc as moot, and filed a
superseding opinion affirming in part and vacating in part the
district court’s summary judgment in favor of Alaska
Electrical Pension Fund and other defendants on claims
(1) that the Fund abused its discretion in denying the plaintiff
benefits under the Alaska Electrical Pension Plan and (2) that
he was entitled to equitable relief under ERISA.
For over three years, the Fund paid the plaintiff monthly
pension benefits he had not earned. When it rediscovered an
earlier determination that the plaintiff had never met the
Plan’s vesting requirements, it terminated his benefits.
*
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
GABRIEL V. AEPF 3
The panel affirmed the district court’s determination that
the plaintiff failed to raise a genuine issue of material fact as
to his entitlement to “appropriate equitable relief” under
29 U.S.C. § 1132(a)(3) in the form of equitable estoppel or
reformation.
The panel rejected the plaintiff’s argument that the Fund
failed to comply with ERISA procedural requirements or
waived its determination that the plaintiff never vested, and
therefore affirmed the district court’s deference to the Fund’s
denial of benefits.
Because the district court made its ruling prior to the
Supreme Court’s decision in CIGNA Corp. v. Amara, 131 S.
Ct. 1866 (2011), and therefore did not consider the
availability of the equitable remedy of surcharge, which the
Supreme Court held may be “appropriate equitable relief” for
purposes of § 1132(a)(3), the panel vacated the district court’s
ruling that the plaintiff was not entitled to any form of
“appropriate equitable relief.” The panel remanded for the
district court to reconsider the availability of surcharge in this
case, and, if available, whether the plaintiff adequately
alleged a remediable wrong.
Concurring, Judge Kozinski wrote that he did not object
to the decision to remand for the district court to consider
whether the plaintiff was entitled to the equitable remedy of
surcharge under CIGNA Corp. v. Amara. But on the record
before the panel, he seriously doubted that the plaintiff would
prevail on such a surcharge claim consistent with the panel’s
opinion.
4 GABRIEL V. AEPF
COUNSEL
Jennifer Mary Coughlin, K&L Gates, LLP, Anchorage,
Alaska, for Plaintiff-Appellant.
Allen Bruce McKenzie (argued), and Frank J. Morales,
McKenzie Rothwell Barlow & Coughran, P.S., Seattle,
Washington, for Defendants-Appellees.
ORDER
The opinion filed on June 6, 2014, and appearing at
755 F.3d 647, is withdrawn. The superseding opinion will be
filed concurrently with this order. The parties may file
additional petitions for rehearing or rehearing en banc.
OPINION
IKUTA, Circuit Judge:
Gregory R. Gabriel appeals the district court’s dismissal
of his claims against the Alaska Electrical Pension Fund (the
Fund) and other defendants under the Employee Retirement
Income Security Act of 1974 (ERISA), 29 U.S.C. §§ 1001 et
seq. We affirm the district court’s determination that Gabriel
failed to raise a genuine issue of material fact as to his
entitlement to “appropriate equitable relief” under 29 U.S.C.
§ 1132(a)(3) in the form of equitable estoppel or reformation.
We also reject Gabriel’s argument that the Fund failed to
comply with ERISA procedural requirements or waived its
determination that Gabriel never vested, and therefore affirm
GABRIEL V. AEPF 5
the district court’s deference to the Fund’s denial of benefits.
But, because the district court made its ruling prior to the
Supreme Court’s decision in CIGNA Corp. v. Amara, the
district court did not consider the availability of the
“monetary remedy against a trustee, sometimes called a
‘surcharge,’” which the Court held may be “appropriate
equitable relief” for purposes of § 1132(a)(3). 131 S. Ct.
1866, 1880 (2011). Accordingly, we vacate the district
court’s ruling that Gabriel is not entitled to any form of
“appropriate equitable relief” and remand for the district
court to reconsider the availability of surcharge in this case,
and, if available, whether Gabriel has adequately alleged a
remediable wrong.
I
For over three years, the Fund paid Gabriel monthly
pension benefits he had not earned. This case arises from the
events that occurred after the Fund discovered this error.
From August 1968 through April 1975, Gabriel
participated in the Alaska Electrical Pension Plan (the Plan).
The Plan is an “employee pension benefit plan” as defined in
ERISA, 29 U.S.C. § 1002(2)(A). It covers electrical workers
and contractors who work for employers that participate in
one of several electrical industry collective bargaining
agreements. The Plan is administered by the Fund, which is
run by a board of trustees. The Plan gives the trustees “the
exclusive right to construe the provisions of the Plan and to
determine any and all questions arising thereunder or in
connection with the administration thereof.”
Under section 5.01 of the Plan, a participant who has
completed ten or more “[y]ears of service,” as defined in the
6 GABRIEL V. AEPF
Plan, is vested under the Plan and is eligible to apply for
pension benefits on retirement after reaching a specified age.
Section 8.01 provides that a participant who fails to earn a
total of 500 hours of service in a two-year period, and is not
on a qualifying leave of absence pursuant to section 8.02, is
terminated from the Plan. A terminated participant may be
reinstated under section 8.04. Under section 8.03, a vested
participant who is terminated is not devested; once vested, a
participant remains vested.
Gabriel worked until April 1975 as an employee of
several different electric companies that participated in the
Plan. In 1975, he became the sole proprietor of Twin Cities
Electric. From September 1975 through November 1978,
Twin Cities made contributions for both Gabriel and its
employees. Based on these contributions, the Fund initially
credited Gabriel with eleven years of service, enough to
qualify Gabriel as a vested participant under section 5.01.
But in 1979, the Fund determined that Gabriel was an
owner of Twin Cities, rather than an employee, and therefore
not eligible to participate in the Plan. In a letter dated
November 20, 1979, the Fund’s general counsel informed
Gabriel about this error and told him that the Fund owed him
a refund of $13,626 for the erroneous contributions made on
his behalf from 1975 to 1978. Further, the letter informed
Gabriel that he was terminated from the Plan as of January 1,
1978, pursuant to section 8.01, because its records showed
that by that time he had two consecutive years with less than
500 hours of service. An attachment to the letter, entitled
“Benefit Statement Without Hours Reported By Twin Cities,”
stated that Gabriel had “8 yrs. Credited Service” from 1968
to 1975 when the improper hours for his time as an employer
at Twin Cities were excluded, and that the Fund would update
GABRIEL V. AEPF 7
Gabriel’s hours report to remove the improperly credited
hours.
As a separate matter, the letter stated that, because Twin
Cities had been delinquent in making contributions for its
other employees, the Fund would set off the delinquent
amounts owed to the Fund (a total of $6,989.24) from the
refund amount owed Gabriel, for a total refund to Gabriel of
$6,636.76.
On December 3, 1979, the Fund drafted a follow-up letter
stating that Twin Cities actually owed more in delinquent
obligations than the Fund originally had calculated. To
satisfy Twin Cities’ delinquent obligations for its employees,
the Fund intended to withhold $12,982.69, instead of
$6,989.24. Therefore, the Fund would give Gabriel a refund
of only $643.31. The letter enclosed a release agreement,
which documented the terms of the setoff and refund. It also
informed Gabriel about the steps he would have to take to
become vested in the Plan. The record includes only an
unsigned copy of this letter, which was found in the Fund’s
files. Gabriel asserts he never received this letter.
In January 1980, Gabriel signed the release agreement, in
which he acknowledged that he was receiving a refund of
$643.31 arising from “the improper employer contributions
paid from the year 1975 through 1978” made on his behalf
when he was the owner of Twin Cities, and that the remainder
of the improper contributions (amounting to $12,982.69)
would be used to pay delinquent obligations.
Gabriel did not meet any of the requirements under the
Plan for reinstatement and so never vested in the Plan.
Nevertheless, in late 1996, Gabriel asked the Fund for
8 GABRIEL V. AEPF
information about the amount of pension benefits he would
receive if he retired. In a letter dated January 6, 1997, a
pension representative for the Fund stated that it had
calculated Gabriel’s pension benefits based on his years of
service from 1968 to 1978, and determined that, if he retired,
Gabriel would receive pension benefits of $1,236 each month.
Gabriel subsequently retired and applied for benefits,
which he began receiving in March 1997. In an affidavit
submitted as part of this litigation, Gabriel stated that he
would not have retired in 1997 if the pension representative
had informed him he was ineligible to receive pension
benefits.
The sequence of events leading the Fund to rediscover its
error and terminate Gabriel’s benefits began in May 2000. At
that time, Gabriel began working part-time as an OSHA
safety inspector for Udelhoven Oilfield Services to
supplement his retirement income. In 2001, the Fund warned
Gabriel that his work constituted prohibited post-retirement
employment in the industry, which could lead to a suspension
of benefits. Although Gabriel argued that his employment at
Udelhoven was not in the same industry, the Fund
nonetheless suspended his benefits on that basis in November
2001.
Gabriel challenged this suspension of benefits through the
administrative process established in the Plan. First, Gabriel
appealed the suspension to the Appeals Committee. The
Committee denied his appeal, and Gabriel appealed again to
the next administrative level, which required arbitration of the
dispute. The arbitrator reversed the Appeals Committee’s
decision and remanded the issue for further fact finding.
GABRIEL V. AEPF 9
At the remand hearing before the Appeals Committee,
Gabriel learned that the Fund had not provided him with
certain relevant Plan amendments. The Appeals Committee
suspended the hearing to give Gabriel an opportunity to
review the amendments. Before the Appeals Committee
ruled on the dispute, Gabriel stopped working for Udelhoven,
and the Fund reinstated his pension benefits as of July 1,
2004.
Gabriel nevertheless continued to pursue his claim against
the Fund, and demanded payment of the benefits that the
Fund had withheld due to his Udelhoven work, as well as
attorney’s fees and costs incurred in the administrative
appeals process. The parties engaged in settlement
negotiations, and the Fund agreed to reimburse Gabriel’s
attorney’s fees and costs. After further negotiations, the Fund
also offered to pay Gabriel the withheld benefits, with
interest.
Before Gabriel could respond to this offer, however, the
Fund revoked it. The Fund rediscovered its earlier
determination that Gabriel had been ineligible to participate
in the Plan between September 1975 and November 1978,
and therefore had never met the Plan’s vesting requirements.
Because Gabriel had never become eligible for retirement
benefits, the Fund terminated Gabriel’s benefits and
threatened to seek reimbursement for the $81,033 in benefits
Gabriel had previously received.1
1
The Fund initially brought a counterclaim for reimbursement of these
benefits against Gabriel in this litigation, but later voluntarily dismissed
it.
10 GABRIEL V. AEPF
In response, Gabriel brought an ERISA action in district
court against the Fund, the Board of Trustees, the Pension
Administrative Committee (comprised of trustees responsible
for deciding benefit claims), the Appeals Committee, and
various other individuals responsible for administering the
Fund. In his complaint, Gabriel brought claims for recovery
of benefits and clarification of rights to future benefits under
29 U.S.C. § 1132(a)(1)(B), and breach of the fiduciary duties
set forth in 29 U.S.C. § 1104(a)(1)(A)–(B) and § 1109 under
§ 1132(a)(3).2 The complaint also alleged misrepresentation
and estoppel based on written and oral representations, as
well as other claims not relevant here. The defendants moved
for summary judgment on all of Gabriel’s claims.
The district court addressed the defendants’ motion for
summary judgment in a series of orders. In its first order, the
district court held that Gabriel had raised a genuine issue of
material fact as to whether he had satisfied the Plan’s vesting
requirements, and therefore denied the defendants’ summary
judgment motion on Gabriel’s claims under § 1132(a)(1)(B)
for retroactive reinstatement of his monthly pension benefits
to November 2001, and clarification of his rights to future
benefits. The district court remanded this claim to the
Appeals Committee so Gabriel could exhaust his
administrative remedies. The district court rejected Gabriel’s
claim that the defendants were equitably estopped from
denying him future pension benefits and granted summary
judgment to the defendants on this claim.
2
The complaint also alleged claims for breach of co-fiduciary duties set
forth in 29 U.S.C. § 1105(a), under 29 U.S.C. § 1132(a)(3), but because
these claims are derivative of his breach of fiduciary duty claims, we do
not discuss them separately.
GABRIEL V. AEPF 11
On remand before the Appeals Committee, Gabriel no
longer argued that he had satisfied the Plan’s vesting
requirements, but argued that his pension benefits should be
reinstated because he had relied to his detriment on the 1997
determination by the pension representative that he was
eligible for those benefits. The Appeals Committee rejected
this claim, finding that Gabriel was properly informed of the
ten-year vesting requirement in the Fund’s letters to him of
November 20 and December 3, 1979. It also held that, even
if Gabriel relied to his detriment on the pension
representative’s statements, he was not entitled to have those
benefits reinstated in violation of the express terms of the
Plan.
In its second order, the district court rejected Gabriel’s
claims under § 1132(a)(3)(B) that he was entitled to equitable
relief due to the Fund’s breaches of fiduciary duty. The court
first held that although Gabriel stated he was seeking
equitable relief, such as disgorgement of profits, equitable
restitution, and the imposition of a constructive trust, he was
actually seeking compensatory damages: the benefits he
believed were owed to him. The court rejected this claim,
holding that Mertens v. Hewitt Assocs., 508 U.S. 248 (1993),
foreclosed such relief against the Fund. Further, although the
Ninth Circuit had carved out an exception to Mertens’s limit
on equitable remedies when a plaintiff alleges facts showing
fraud or wrongdoing, see Carpenters Health & Welfare Trust
for S. Cal. v. Vonderharr, 384 F.3d 667, 672 (9th Cir. 2004),
the court determined that Gabriel was not entitled to
restitution or the imposition of a constructive trust under this
exception because he had failed to show any fraud by the
Fund.
12 GABRIEL V. AEPF
In its third order, the district court held that it would
review the Appeals Committee’s final denial of benefits
under an abuse of discretion standard, because the Plan
provided the trustees with broad discretion to construe the
terms of the Plan. The court rejected Gabriel’s claim that the
Fund had waived its argument that he did not satisfy the
Plan’s vesting requirement, as well as Gabriel’s argument that
the Fund breached its obligation to inform him that he was
non-vested in 1979. Under its deferential standard of review,
the district court concluded that the Appeals Committee’s
determination that Gabriel had been properly informed of the
ten-year vesting requirement in the letters of November 20
and December 3, 1979, was not clearly erroneous. The court
therefore granted summary judgment in favor of the
defendants on Gabriel’s benefits claim.
After the district court resolved all his claims, Gabriel
timely appealed. We review a district court’s grant of
summary judgment de novo, and must determine, viewing the
evidence in the light most favorable to the non-moving party,
whether there are any genuine issues of material fact.
Tremain v. Bell Indus., Inc., 196 F.3d 970, 975–76 (9th Cir.
1999). We review de novo the district court’s conclusion that
an ERISA fiduciary did not abuse its discretion. Winters v.
Costco Wholesale Corp., 49 F.3d 550, 552 (9th Cir. 1995).
II
We begin by considering Gabriel’s argument that the
defendants violated their fiduciary duties under ERISA or the
GABRIEL V. AEPF 13
terms of the Plan, for which he is entitled to “appropriate
equitable relief” under § 1132(a)(3).3
A
The civil enforcement provisions of ERISA, codified in
§ 1132(a), are “the exclusive vehicle for actions by
ERISA-plan participants and beneficiaries asserting improper
processing of a claim for benefits.” Pilot Life Ins. Co. v.
Dedeaux, 481 U.S. 41, 52 (1987). Courts may not “infer
[additional] causes of action in the ERISA context, since that
statute’s carefully crafted and detailed enforcement scheme
provides ‘strong evidence that Congress did not intend to
authorize other remedies that it simply forgot to incorporate
expressly.’” Mertens v. Hewitt Assocs., 508 U.S. 248, 254
(1993) (quoting Mass. Mut. Life Ins. Co. v. Russell, 473 U.S.
134, 146–47 (1985)). Under ERISA, the issue is not whether
the statute bars a particular cause of action, but rather
“whether the statute affirmatively authorizes such a suit.” Id.
at 255 n.5.
3
Section 1132(a)(3) provides in pertinent part:
(a) Persons empowered to bring a civil action
A civil action may be brought— . . .
(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)(3).
14 GABRIEL V. AEPF
Section 1132(a)(3) provides that “[a] civil action may be
brought . . . (3) by a participant, beneficiary, or fiduciary . . .
(B) to obtain other appropriate equitable relief (i) to redress
[any act or practice which violates any provision of this
subchapter or the terms of the plan] or (ii) to enforce any
provisions of this subchapter or the terms of the plan.”
29 U.S.C. § 1132(a)(3). Under this provision, a plaintiff who
is a “participant, beneficiary, or fiduciary” must prove both
(1) that there is a remediable wrong, i.e., that the plaintiff
seeks relief to redress a violation of ERISA or the terms of a
plan, see Mertens, 508 U.S. at 254; and (2) that the relief
sought is “appropriate equitable relief,” 29 U.S.C.
§ 1132(a)(3)(B). A claim fails if the plaintiff cannot establish
the second prong, that the remedy sought is “appropriate
equitable relief” under § 1132(a)(3)(B), regardless of whether
“a remediable wrong has been alleged.” Mertens, 508 U.S.
at 254.
The Supreme Court has made clear that “appropriate
equitable relief” refers to a “remedy traditionally viewed as
‘equitable.’” Id. at 255; see also CIGNA Corp. v. Amara,
131 S. Ct. 1866, 1878 (2011) (stating that “the term
‘appropriate equitable relief’” in § 1132(a)(3) refers to
“‘those categories of relief’ that, traditionally speaking . . .
‘were typically available in equity.’” (quoting Sereboff v. Mid
Atl. Med. Servs., Inc., 547 U.S. 356, 361 (2006))). Because
“ERISA abounds with the language and terminology of trust
law,” Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101,
110 (1989), the Court relies heavily on trust law doctrine in
interpreting ERISA, see, e.g., Conkright v. Frommert, 559
U.S. 506, 512 (2010) (stating that, when “ERISA’s text does
not directly resolve the matter,” the Court has “looked to
‘principles of trust law’ for guidance” (quoting Firestone,
489 U.S. at 109)).
GABRIEL V. AEPF 15
In interpreting § 1132(a)(3), the Court has distinguished
between equitable and legal relief. According to the Court,
Congress intended to limit the relief available under
§ 1132(a)(3) to “those categories of relief that were typically
available in equity (such as injunction, mandamus, and
restitution, but not compensatory damages),” Mertens,
508 U.S. at 256, and did not authorize any legal remedies,
even though an equity court was empowered to grant such
relief, id. at 256–59. Accordingly, in Mertens the Court
rejected the plaintiffs’ efforts to seek money damages to
remedy alleged breaches of fiduciary duty. Id. at 255.
Further, the Court held that plaintiffs may not disguise an
attempt to obtain monetary relief as a traditional equitable
remedy. For example, “an injunction to compel the payment
of money past due under a contract, or specific performance
of a past due monetary obligation, was not typically available
in equity,” and thus is not available under § 1132(a)(3).
Great-W. Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204,
210–11 (2002). And although restitution can be an equitable
remedy, “not all relief falling under the rubric of restitution
is available in equity.” Id. at 212. For instance, a plaintiff
“had a right to restitution at law through an action derived
from the common-law writ of assumpsit.” Id. at 213. But “a
plaintiff could seek restitution in equity” only “where money
or property identified as belonging in good conscience to the
plaintiff could clearly be traced to particular funds or property
in the defendant’s possession.” Id.
While ruling out legal remedies and limiting the
availability of injunction, mandamus, and restitution in
Mertens and Great-West Life, the Supreme Court has noted
that an ERISA lawsuit “by a beneficiary against a plan
fiduciary (whom ERISA typically treats as a trustee) about
the terms of a plan (which ERISA typically treats as a trust)”
16 GABRIEL V. AEPF
is the sort of action “that, before the merger of law and
equity,” could have been brought “only in a court of equity,
not a court of law.” Amara, 131 S. Ct. at 1879. Noting that
“the remedies available to those courts of equity were
traditionally considered equitable remedies,” id., the Supreme
Court identified three types of such traditional equitable
remedies that may be available under § 1132(a)(3), id. at
1879–80.
First, “appropriate equitable relief” may include “the
reformation of the terms of the plan, in order to remedy the
false or misleading information” provided by a plan fiduciary.
Amara, 131 S. Ct. at 1879. The power to reform contracts is
available only in the event of mistake or fraud. Id.; see also
Skinner v. Northrop Grumman Ret. Plan B, 673 F.3d 1162,
1166 (9th Cir. 2012). A plaintiff may obtain reformation
based on mistake in two circumstances: (1) “if there is
evidence that a mistake of fact or law affected the terms of [a
trust] instrument and if there is evidence of the settlor’s true
intent”; or (2) “if both parties [to a contract] were mistaken
about the content or effect of the contract” and the contract
must be reformed “to capture the terms upon which the
parties had a meeting of the minds.” Skinner, 673 F.3d at
1166. Under a fraud theory, a plaintiff may obtain
reformation when either (1) “[a trust] was procured by
wrongful conduct, such as undue influence, duress, or fraud,”
or (2) a “party’s assent [to a contract] was induced by the
other party’s misrepresentations as to the terms or effect of
the contract” and he “was justified in relying on the other
party’s misrepresentations.” Id.
Second, “appropriate equitable relief” may include the
remedy of equitable estoppel, which holds the fiduciary “to
what it had promised” and “‘operates to place the person
GABRIEL V. AEPF 17
entitled to its benefit in the same position he would have been
in had the representations been true.’” Amara, 131 S. Ct. at
1880 (quoting James W. Eaton, Handbook of Equity
Jurisprudence § 62, at 176 (1901)). Under this theory of
relief:
“(1) the party to be estopped must know the
facts; (2) he must intend that his conduct shall
be acted on or must so act that the party
asserting the estoppel has a right to believe it
is so intended; (3) the latter must be ignorant
of the true facts; and (4) he must rely on the
former’s conduct to his injury.”
Greany v. W. Farm Bureau Life Ins. Co., 973 F.2d 812, 821
(9th Cir. 1992) (quoting Ellenburg v. Brockway, Inc.,
763 F.2d 1091, 1096 (9th Cir. 1985)); see also 1 John Norton
Pomeroy, A Treatise on Equity Jurisprudence § 805, at
190–98 (5th ed. 1941).
A plaintiff seeking equitable estoppel in the ERISA
context must meet additional requirements.4 First, we have
consistently held that a party cannot maintain a federal
4
Although our cases have sometimes discussed equitable estoppel
claims as if they were independent causes of action, see, e.g., Greany,
973 F.2d at 821, the Supreme Court has now clarified that courts may not
“infer causes of action in the ERISA context” beyond what is set forth in
the statute, and has instructed us to analyze equitable estoppel as a form
of “appropriate equitable relief” under § 1132(a)(3)(B), Mertens, 508 U.S.
at 254. But because our estoppel precedent relied on traditional equitable
principles, see United States v. Ga.-Pac. Co., 421 F.2d 92, 96 (9th Cir.
1970) (citing 3 Pomeroy, Equity Jurisprudence §§ 801–02, 804, and Lavin
v. Marsh, 644 F.2d 1378, 1382 (9th Cir. 1981)), it continues to inform our
understanding of what constitutes “appropriate equitable relief.”
18 GABRIEL V. AEPF
equitable estoppel claim in the ERISA context when recovery
on the claim would contradict written plan provisions.
Greany, 973 F.2d at 822 (non-trust fund defendants);
Davidian v. S. Cal. Meat Cutters Union & Food Emps.
Benefit Fund, 859 F.2d 134, 136 (9th Cir. 1988) (trust fund
defendant). This principle is derived from ERISA’s
requirement that “[e]very employee benefit plan shall be
established and maintained pursuant to a written instrument.”
29 U.S.C. § 1102(a)(1). The purpose of this requirement is to
protect “the plan’s actuarial soundness by preventing plan
administrators from contracting to pay benefits to persons not
entitled to them under the express terms of the plan.”
Rodrigue v. W. & S. Life Ins. Co., 948 F.2d 969, 971 (5th Cir.
1991); see also Greany, 973 F.2d at 822 (citing Rodrigue,
948 F.2d at 971). Accordingly, a plaintiff may not bring an
equitable estoppel claim that “would result in a payment of
benefits that would be inconsistent with the written plan,” or
would, as a practical matter, result in an amendment or
modification of a plan, because such a result “would
contradict the writing and amendment requirements of
29 U.S.C. §§ 1102(a)(1) and (b)(3).” Greany, 973 F.2d at
822. For the same reason, “oral agreements or modifications
cannot be used to contradict or supersede the written terms of
an ERISA plan.” Richardson v. Pension Plan of Bethlehem
Steel Corp., 112 F.3d 982, 986 n.2 (9th Cir. 1997); see also
Thurber v. W. Conf. of Teamsters Pension Plan, 542 F.2d
1106, 1109 (9th Cir. 1976) (per curiam) (holding in an
analogous context that an employee’s reliance on advice from
a pension administrator did not estop the pension fund from
denying benefits because “[t]he rights of other pensioners
must be considered, and the trust fund may not be deflated
because of the misrepresentation or misconduct of the
Administrator of the fund”). The same rule applies to
informal written interpretations of an ERISA plan. See Nat’l
GABRIEL V. AEPF 19
Cos. Health Benefit Plan v. St. Joseph’s Hosp., 929 F.2d
1558, 1572 (11th Cir. 1998) (holding that “use of the law of
equitable estoppel to enforce informal written interpretations
will not undermine the integrity of ERISA plans”), abrogated
on other grounds by Geissal v. Moore Med. Corp., 524 U.S.
74 (1998). Nevertheless, we have distinguished “between
oral statements that contradict or supersede the terms of an
ERISA plan and oral interpretations of a plan’s provisions
that are not contrary to the plan’s written provisions,” and
may give effect to interpretations of ambiguous plan
provisions. Richardson, 112 F.3d at 986 n.2.
Second, we have held that an ERISA beneficiary must
establish “extraordinary circumstances” to recover benefits
under an equitable estoppel theory. Pisciotta v. Teledyne
Indus., Inc., 91 F.3d 1326, 1331 (9th Cir. 1996) (per curiam).
“The actuarial soundness of pension funds is, absent
extraordinary circumstances, too important to permit trustees
to obligate the fund to pay pensions to persons not entitled to
them under the express terms of the pension plan.” Phillips
v. Kennedy, 542 F.2d 52, 55 n.8 (8th Cir. 1976); see also
Rosen v. Hotel & Rest. Emps. & Bartenders Union of Phila.,
637 F.2d 592, 598 (3d Cir. 1981). Although we have not
defined “extraordinary circumstances” in this context, courts
have held that making “a promise that the defendant
reasonably should have expected to induce action or
forbearance on the plaintiff’s part,” Devlin v. Empire Blue
Cross & Blue Shield, 274 F.3d 76, 86 (2d Cir. 2001), as well
as “conduct suggesting that [the employer] sought to profit at
the expense of its employees,” a “showing of repeated
misrepresentations over time,” or evidence “that plaintiffs are
particularly vulnerable,” Kurz v. Phila. Elec. Co., 96 F.3d
1544, 1553 (3d Cir. 1996), can constitute extraordinary
circumstances.
20 GABRIEL V. AEPF
Accordingly, to maintain a federal equitable estoppel
claim in the ERISA context, the party asserting estoppel must
not only meet the traditional equitable estoppel requirements,
but must also allege: (1) extraordinary circumstances;
(2) “that the provisions of the plan at issue were ambiguous
such that reasonable persons could disagree as to their
meaning or effect”; and (3) that the representations made
about the plan were an interpretation of the plan, not an
amendment or modification of the plan. Spink v. Lockheed
Corp., 125 F.3d 1257, 1262 (9th Cir. 1997) (citing Pisciotta,
91 F.3d at 1331); see also Greany, 973 F.2d at 822 n.9 (“A
plaintiff must first establish that the plan provision in
question is ambiguous and the party to be estopped
interpreted this ambiguity. If these requirements are satisfied,
the plaintiff may proceed with the equitable estoppel claim by
satisfying” traditional equitable estoppel requirements.).
Third, “appropriate equitable relief” also includes
“surcharge.” As explained in Amara, “[e]quity courts
possessed the power to provide relief in the form of monetary
‘compensation’ for a loss resulting from a trustee’s breach of
duty, or to prevent the trustee’s unjust enrichment.” 131 S.
Ct. at 1880 (quoting Restatement (Third) of Trusts § 95, and
Comment a (Tent. Draft No. 5, Mar. 2, 2009) (hereinafter
Third Restatement)). “Indeed, prior to the merger of law and
equity this kind of monetary remedy against a trustee,
sometimes called a ‘surcharge,’ was ‘exclusively equitable.’”
Id. (quoting Princess Lida of Thurn & Taxis v. Thompson,
305 U.S. 456, 464 (1939)). This remedy “extended to a
breach of trust committed by a fiduciary encompassing any
violation of a duty imposed upon that fiduciary.” Id.
Because Amara involved “a suit by a beneficiary against a
plan fiduciary,” id. at 1879, and it was within the power of
traditional equity courts to grant a demand for “make-whole
GABRIEL V. AEPF 21
relief” in the form of the equitable remedy of surcharge, such
a remedy was available to the beneficiaries in Amara, id. at
1880. The Court therefore distinguished Mertens, id., in
which the plan participants had sued a defendant who was not
a trustee, 508 U.S. at 250, 262–63. Because such a lawsuit
would fall outside of traditional equitable jurisprudence, the
“make-whole relief” in that case constituted compensatory
damages against a nonfiduciary, which “traditionally
speaking, was legal, not equitable, in nature.” Amara, 131 S.
Ct. at 1878; see also id. at 1880 (“Thus, insofar as an award
of make-whole relief is concerned, the fact that the defendant
in this case, unlike the defendant in Mertens, is analogous to
a trustee makes a critical difference.”). Amara further noted
that equity courts did not require “a showing of detrimental
reliance” when ordering surcharge. Id. at 1881. “Rather,
they simply ordered a trust or beneficiary made whole
following a trustee’s breach of trust,” and would “mold the
relief to protect the rights of the beneficiary.” Id. (internal
quotation marks omitted). Accordingly, Amara concluded
that “to obtain relief by surcharge” for a breach of the ERISA
trustee’s duties, “a plan participant or beneficiary must show
that the violation injured him or her,” but “need only show
harm and causation,” not detrimental reliance. Id.
We followed the traditional equitable principles and
treatises relied on in Amara in our subsequent decision in
Skinner, where we held that surcharge may be an appropriate
form of equitable relief to redress losses of value or lost
profits to the trust estate and to require a fiduciary to disgorge
profits from unjust enrichment. 673 F.3d at 1167. In
Skinner, participants in a retirement plan claimed that the
committee administrating the plan breached its statutory duty
to provide them with a summary plan document that was
“sufficiently accurate and comprehensive” to inform them of
22 GABRIEL V. AEPF
their rights, duties, offsets, and reductions. Id. According to
Skinner, “the remedy of surcharge could hold the committee
liable for benefits it gained through unjust enrichment or for
harm caused as the result of its breach” of such a statutory
duty. Id.
First addressing unjust enrichment, we held that “[a]
trustee (or a fiduciary) who gains a benefit by breaching his
or her duty must return that benefit to the beneficiary.” Id.
(citing Restatement (Third) Trusts § 100(b) (2012);
Restatement (Second) Trusts § 205 (1959); Restatement
(Third) Restitution & Unjust Enrichment § 43 (2011);
Restatement (First) Restitution § 138 (1937)). We concluded
that the participants were not entitled to disgorgement of
profits from unjust enrichment because they “presented no
evidence that the committee gained a benefit by failing to
ensure that participants received an accurate [summary plan
description].” Id.
We then addressed “[c]ompensatory damages for actual
harm,” and stated that “[a] trustee who breaches his or her
duty could be liable for loss of value to the trust or for any
profits that the trust would have accrued in the absence of the
breach.” Id. (citing Restatement (Third) Trusts § 100(a)
(2012); Restatement (Second) Trusts § 205 (1959)). More
generally, “[t]he beneficiary can pursue the remedy that will
put the beneficiary in the position he or she would have
attained but for the trustee’s breach.” Id. Applying these
principles, we concluded that the participants were not
entitled to compensatory relief because they did not suffer
any compensable harm. Id. Accordingly, we concluded that
the remedy of surcharge was not available to compensate the
participants.
GABRIEL V. AEPF 23
B
We now turn to Gabriel’s claim under § 1132(a)(3) that
there is a genuine issue of material fact as to whether he is
entitled to “appropriate equitable relief.”5
1
We first consider Gabriel’s argument that he is entitled to
an order equitably estopping the Fund from relying on its
corrected records that show his actual years of service.6
Gabriel claims he meets the test for traditional equitable
estoppel because: (1) the defendants were aware that he was
not vested; (2) they nevertheless informed him in the January
7, 1997 letter that he would receive a monthly pension, and
Gabriel was entitled to rely on this letter; (3) Gabriel was
ignorant of the true facts; and (4) Gabriel relied on the
misinformation in the January 1997 letter to his detriment by
retiring at age 62 when he could have continued working.
Further, Gabriel asserts that he has met the additional
requirements set forth in Spink, because the provisions of the
Plan were ambiguous, the plan representative provided an
5
We may address this issue before asking whether Gabriel has created
a genuine issue of material fact that the Fund violated the fiduciary duties
set forth in § 1104(a)(1)(A) and (B). See Mertens, 508 U.S. at 254–55
(evaluating whether the relief sought constituted “appropriate equitable
relief” and reserving decision on whether “a remediable wrong has been
alleged”).
6
Gabriel’s request for relief has changed over the course of this
litigation. In his complaint, Gabriel asserted that the defendants should be
estopped from denying that he qualified as a vested participant in the Plan.
Because he now concedes that he did not vest in the Plan, he instead
asserts that the defendants should be estopped from refusing to change the
Fund’s records to show him as vested.
24 GABRIEL V. AEPF
interpretation of the Plan, and there were extraordinary
circumstances, including that the defendants operated under
a conflict of interest and violated the procedural requirements
of ERISA.
We need not determine whether Gabriel has raised a
genuine issue of material fact as to every element of his
equitable estoppel claim because we conclude that Gabriel
has failed to show that the plan representative’s January 1997
letter was an interpretation of ambiguous language in the
Plan, rather than a mere mistake in assessing Gabriel’s
entitlement to benefits. On its face, the letter does not
provide an interpretation of the Plan, but merely provides the
erroneous information that Gabriel is entitled to benefits of
$1,236 per month upon retirement. Such an error in
calculating benefits is just the sort of mistake that we
repeatedly have held cannot provide a basis for equitable
estoppel. We have made clear that “[a] plaintiff cannot avail
himself of a federal ERISA estoppel claim based upon
statements of a plan employee which would enlarge his rights
against the plan beyond what he could recover under the
unambiguous language of the plan itself.” Greany, 973 F.2d
at 822; see also Renfro v. Funky Door Long Term Disability
Plan, 686 F.3d 1044, 1054 (9th Cir. 2012) (holding that “a
beneficiary cannot obtain recovery on the basis of estoppel
‘in the face of contrary, written plan provisions’” (quoting
Davidian, 859 F.2d at 134)). “Our precedent dictates that a
trust fund can never be equitably estopped where payment
would conflict with the written agreement.” Greany,
973 F.2d at 822. Nor is this principle limited to trust fund
defendants, because we concluded in Greany that “no
compelling reason [existed] to allow an estoppel claim to
proceed solely because the individual or group to be estopped
is other than a trust.” Id.
GABRIEL V. AEPF 25
To counter the weight of this precedent, Gabriel relies on
Spink, and claims that the type of misinformation he received
from the plan representatives, when considered in conjunction
with various provisions in the Plan, makes certain provisions
in the Plan ambiguous as to him. To understand this
argument, we must first take an in-depth look at Spink. In
Spink, Lockheed hired the plaintiff, who was then 61 years
old, away from a competitor. 125 F.3d at 1259. As part of its
recruitment process, Lockheed represented that the plaintiff
could participate in Lockheed’s pension plan. Id. For the
next four years, Lockheed sent the plaintiff written year-end
statements notifying him of the amount of credited service he
had accumulated as a plan participant. Id. Eventually,
Lockheed notified him he was not eligible to participate in the
plan because he was over 60 when hired. Id. at 1259–60.
Although the district court granted Lockheed’s motion to
dismiss, id. at 1259, we reversed, rejecting Lockheed’s
argument that the pension plan unambiguously excluded the
plaintiff from obtaining benefits, see id. at 1262–63.
In reaching that conclusion, we relied on two provisions
of Lockheed’s ERISA plan. The first provision stated that
“no Employee may become a Member if he commences
employment on or after December 25, 1976, and, at the time
of such commencement of employment, is sixty (60) years of
age or older.” Id. at 1262. The second provided that “once
each year the Retirement Plan Committee shall notify each
Member in writing of his total Credited Service, according to
the Corporation’s records. Such Credited Service shall be
considered correct and final unless the Member files an
objection by Filing With the Committee within thirty (30)
calendared days following such notice.” Id. Because the
plaintiff had received “correct and final ” year-end statements
indicating that he had accrued credited service time, despite
26 GABRIEL V. AEPF
having been older than sixty when hired, we concluded there
was sufficient ambiguity in the plan as applied to the plaintiff
to allow the case to survive Lockheed’s motion to dismiss.
Id. at 1262–63.
Gabriel claims he is similarly situated to the employee in
Spink, and points to two different provisions in the Plan.
First, he identifies the “unambiguous statement in the AEPF
plan that ten years of service are required.” This ten-year
vesting requirement is reflected in both section 5.01,7 which
sets the normal retirement date, and section 8.03,8 entitled
“vesting,” which explains when a terminated participant will
7
Section 5.01(a) provides in relevant part:
The Normal Retirement Date for a Participant shall be
the first day of the month coincident with or
immediately following his attainment of age 62, or one
year after his Effective Date of Coverage, whichever is
later and the date he has:
(a) completed ten (10) Years of Service, of which at
least one year must be Credited Future Service . . . .
8
Section 8.03 provides in relevant part:
A Participant who prior to January 1, 1978, fails to earn
a total of at least 500 Hours of Service in a two-
consecutive Plan Year period and a Participant, who on
or after January 1, 1978, fails to earn at least 500 Hours
of Service in a Plan Year shall be deemed a Terminated
Vested Participant provided he has completed ten (10)
or more Years of Service, of which one year was
Credited Future Service. Once he attains age 55, he
shall be eligible to apply for a Retirement Income in
accordance with the applicable provisions of Article
VII[, which sets the amount of retirement income].
GABRIEL V. AEPF 27
be considered to have vested. Second, section 14.02 states
that participants in the Plan “shall be entitled to obtain
periodic reports showing the number of hours credited to their
accounts at the administration office” and may claim they are
entitled to additional hours by filing a claim and evidence
with the administration office within one year after the end of
the disputed year. Otherwise the “hours shall remain as
credited.”9 According to Gabriel, the Fund gave him an
unequivocal written statement that he would be entitled to
$1,236 per month if he retired in 1997, implicitly indicating
that he had enough hours of service to vest. Gabriel reasons
that, because he did not challenge the Fund’s implicit
indication that his service hours were sufficient for vesting,
the “hours shall remain as credited” under section 14.02.
Gabriel concludes that the clash between the Fund’s implicit
hours calculation in the representative’s letter to him and the
Plan’s statement that ten years are required for vesting creates
an ambiguity in the Plan’s provisions.
We disagree. Section 14.02 refers only to “periodic
reports showing the number of hours credited” to a
participant’s account. Gabriel does not claim he received or
9
Section 14.02 states in pertinent part:
Participants shall be entitled to obtain periodic reports
showing the number of house credited to their accounts
at the administration office. Participants who contend
that they are entitled to be credited with a greater
number of hours for any calendar year must file
evidence in support of such claims with the
administration office within one year after the end of
the disputed year or the hours shall remain as credited.
The Trustees shall determine the proper number of
hours, if any, to be credited to such Participants.
28 GABRIEL V. AEPF
relied on such periodic reports when deciding to retire.
Therefore, even if section 14.02’s requirement that the hours
in such a report “shall remain as credited” could create an
ambiguity when read in connection with the vesting
requirements in sections 5.01 and 8.03 under some
circumstances, no such conflict exists in this case.
Because section 14.02 is not applicable to Gabriel’s
claims, we are left with his argument that the misinformation
provided by the plan representative in 1997 conflicts with the
clear language of sections 5.01 and 8.03. This conflict does
not cast doubt on the meaning or effect of those sections,
however, but merely establishes that the defendants made
misrepresentations, a necessary element of traditional
estoppel. Reasonable persons could not disagree regarding
the effect of sections 5.01 and 8.03. The plan representative’s
mistaken response to Gabriel’s inquiry therefore “does not
rise to the level of an interpretation of the plan’s provisions
justifying application of the equitable estoppel doctrine.”
Greany, 973 F.2d at 822.
Even if Gabriel could show that the Plan was ambiguous,
he fails to satisfy another element necessary to qualify for
equitable estoppel: that he was ignorant of the true facts.
Gabriel does not dispute that he received the Fund’s
November 20, 1979 letter. This letter informed Gabriel that
he had not been eligible to participate while a proprietor of
Twin Cities between 1975 and 1978, that his hours accrued
for Twin Cities would be deducted from his account, and that
he had been terminated under section 8.01 of the Plan, which
provides that a non-vested participant who, for any two
consecutive plan years, has less than 500 hours of service will
be deemed a terminated non-vested participant, absent
reinstatement or some other exception. Gabriel argues that
GABRIEL V. AEPF 29
this letter was insufficient to inform him he was not vested,
because it did not expressly state that he was ineligible to
receive a pension unless he met certain criteria. The letter
itself belies this claim.10 Accordingly, the district court
properly concluded that Gabriel was not entitled to relief
based on estoppel as a matter of law.
2
We next turn to Gabriel’s claim that he is entitled to the
equitable remedy of reformation. To qualify for reformation
of the Plan based on mistake under trust or contract law
principles, Gabriel would need to demonstrate that “a mistake
of fact or law affected the terms” of the Plan, the relevant
trust instrument here, and introduce evidence of the trust
settlor’s (or contractual parties’) true intent. Skinner,
673 F.3d at 1166. Gabriel cannot meet this standard as a
matter of law, because the Plan itself does not contain an
error. Gabriel concedes that he was a sole proprietor of Twin
Cities from 1975 to 1978 and ineligible to participate in the
Plan during that time, and therefore the Fund’s current,
corrected records accurately reflect the agreement between
Gabriel and the Fund. Instead, Gabriel wants to reform the
Fund’s administrative records to conform to the
misinformation provided by the plan representative. But
reformation does not extend so far. The administrative
records are not part of the Plan, see Amara, 131 S. Ct. at
1877–78 (rejecting the use of non-plan summary documents
to create new or different plan terms), and the Fund’s
mistaken administrative records did not reflect the parties’
10
Because the November 20, 1979 letter establishes that Gabriel knew
or should have known that he was not vested, we do not need to reach his
argument that he never received the December 3, 1979 letter.
30 GABRIEL V. AEPF
true intent in entering into the Plan. Accordingly, the remedy
of reformation due to mistake is not applicable in this context.
Nor has Gabriel demonstrated that he is entitled to
reformation based on fraud, because he does not allege that
the Plan “was procured by wrongful conduct, such as undue
influence, duress, or fraud” or that he “was justified in relying
on the [Fund’s] misrepresentations.” Skinner, 673 F.3d at
1166. Accordingly, Gabriel has not adduced evidence giving
rise to a genuine issue of material fact that he is entitled to
reformation.
Gabriel argues that our decision in Mathews v. Chevron
Corp., 362 F.3d 1172 (9th Cir. 2004), supports his
reformation claim. In Mathews, Chevron management
adopted a program to reduce its workforce by offering an
enhanced retirement benefit to any participant in Chevron’s
ERISA plan who was involuntarily terminated without cause,
including those employees who expressed an interest in such
“involuntary” termination. Id. at 1176–77. Despite this
program, plant general managers at first continued to exercise
significant personnel discretion. The Richmond plant general
manager repeatedly informed his employees that he did not
plan to adopt the enhanced benefit program, and certain
employees at the plant voluntarily retired. Id. at 1177. When
Chevron ultimately instituted the program at Richmond, the
retired employees sued for the enhanced benefits. Id. at
1177–78. It was undisputed that all of the employees would
have been selected for involuntary termination had they
expressed an interest. Id. at 1186. We held that Chevron
breached its fiduciary duty to these employees once it began
to seriously consider implementing the program in Richmond.
Therefore, we affirmed the district court’s order that Chevron
had to modify its records to show that the retired plaintiffs
GABRIEL V. AEPF 31
had been involuntarily terminated and were eligible for
enhanced benefits. Id. at 1186–87. The remedy was
“appropriate equitable relief” because it operated merely to
provide the participants with the benefits they would have
been received but for the breach. Id. (internal quotation
marks omitted).
Mathews does not help Gabriel here. In Mathews, the
employees had been eligible to participate in the enhanced
benefits program, and would have participated but for the
fiduciary’s misinformation. Id. at 1186. Here, by contrast,
Gabriel was not eligible to participate in the Plan, and the
misinformation he received in 1997 from a plan
representative did not prevent him from obtaining any benefit
under the Plan to which he otherwise would have been
entitled. Whereas the order in Mathews allowed the
employees to get the benefit of the involuntary termination
program, but did not alter the terms of the Plan as written, see
id. at 1186–87, the order Gabriel seeks here necessarily
would require violating the terms of the Plan by deeming an
ineligible person to be eligible for pension benefits.
Equitable remedies are not available where the claim “would
result in a payment of benefits that would be inconsistent with
the written plan.” Greany, 973 F.2d at 822.
3
Finally, we turn to Gabriel’s claim that he is entitled to
the equitable remedy of surcharge, which he frames as
entitlement to receive an amount equal to the benefits he
would have received had he been a participant with the hours
erroneously reflected in the Fund’s records when he applied
for benefits. Because the district court held that monetary
relief was not available under Mertens, it did not consider
32 GABRIEL V. AEPF
whether Gabriel’s action was “a suit by a beneficiary against
a plan fiduciary,” Amara, 131 S. Ct. at 1879, for “a loss
resulting from a trustee’s breach of duty, or to prevent the
trustee’s unjust enrichment,” id. at 1880, and thus constituted
“appropriate equitable relief” for purposes of § 1132(a)(3)(B).
Nor did the district court determine whether Gabriel had
shown that the trustee’s breach of duty injured him, id. at
1881, or whether “the remedy of surcharge” is available for
the claimed injury, see Skinner, 673 F.3d at 1167 (applying
traditional equitable principles to determine whether “the
remedy of surcharge could hold the [plan administrator]
liable for benefits it gained through unjust enrichment or for
harm caused as the result of its breach”). In Amara, the
Supreme Court held that where the district court had not
determined “if an appropriate remedy may be imposed under
§ 502(a)(3)” the correct approach was to “vacate the
judgment below and remand this case for further
proceedings.” 131 S. Ct. at 1882. We take the same
approach here, consistent with our sister circuits. See
McCravy v. Metro. Life Ins. Co., 690 F.3d 176, 181–83 (4th
Cir. 2012) (vacating the district court’s summary judgment
order because the court failed to recognize the availability of
the surcharge remedy pre-Amara); see also Silva v. Metro.
Life Ins. Co., 762 F.3d 711, 724–25 (8th Cir. 2014) (same);
Kenseth v. Dean Health Plan, Inc., 722 F.3d 869, 870, 892
(7th Cir. 2013) (same).
III
We now turn to Gabriel’s argument under § 1132(a)(1)
that the defendants erred in denying him benefits on the
ground that he was non-vested. Gabriel does not claim that
the Fund erred in determining that he had not vested in the
Plan. Rather, he argues that the Fund waived this rationale
GABRIEL V. AEPF 33
for denying him benefits because the Fund did not raise his
non-vested status until 2004, three years after the Fund first
suspended benefits on the ground that Gabriel was engaged
in improper post-retirement work in the industry.
The Fund did not abuse its discretion here. Under
ERISA, an employee benefit plan must “provide adequate
notice in writing to any participant or beneficiary whose
claim for benefits under the plan has been denied” and must
“afford a reasonable opportunity to any participant whose
claim for benefits has been denied for a full and fair review
by the appropriate named fiduciary of the decision denying
the claim.” 29 U.S.C. § 1133; see also 29 C.F.R.
§ 2560.503–1(g)(1), (h)(2). Given these statutory and
regulatory requirements, we have held that an administrator
may not raise a new reason for denying benefits in its final
decision, because that would effectively preclude the
participant “from responding to that rationale for denial at the
administrative level,” and insulate the rationale from
administrative review. Abatie v. Alta Health & Life Ins. Co.,
458 F.3d 955, 974 (9th Cir 2006) (en banc); see also Saffon
v. Wells Fargo & Co. Long Term Disability Plan, 522 F.3d
863, 871 (9th Cir. 2008) (holding that a plan administrator
must provide a participant with the reasons for a benefits
denial at a time when the participant “had a fair chance to
present evidence on this point,” and should not add a new
reason in the administrator’s final denial). Where the
administrator’s final denial contains a new rationale for
denying a claim, the participant may present evidence on that
point to the district court, which must consider it. Saffon,
522 F.3d at 872. Further, the district court can take into
account the administrator’s violation of ERISA’s procedural
requirements in determining how much deference to give the
administrator’s final decision. Id. at 873.
34 GABRIEL V. AEPF
In this case, the Fund did not violate ERISA’s procedural
requirements because it notified Gabriel regarding his non-
vested status while Gabriel’s administrative case was still
pending before the Appeals Committee. The Fund did not
put a new rationale for denying benefits into a final decision
in a manner that would insulate the denial from
administrative review. Cf. Abatie, 458 F.3d at 974. The
Appeals Committee had not yet ruled on Gabriel’s claim for
benefits when it discovered his non-vested status, and nothing
precluded Gabriel from further litigating the Fund’s decision
to deny him benefits through the Fund’s administrative
review process. Indeed, Gabriel had the opportunity to
present evidence to the Appeals Committee on this very issue,
because the district court remanded his benefits claim to the
Appeals Committee. As we noted in Saffon, if a plan
administrator fails to give timely notice, the plaintiff is not
entitled to an award of benefits, but only to the opportunity to
present evidence to challenge the plan administrator’s new
determination. See 522 F.3d at 872–74. Gabriel got just such
a remedy in this case. Accordingly, we reject Gabriel’s
arguments that the Fund failed to comply with ERISA
procedural requirements, or that it waived its determination
that Gabriel never vested, and affirm the district court’s
deference to the Fund’s denial of benefits.
IV
We affirm the district court’s determination that Gabriel
is not entitled to equitable estoppel or reformation, as well as
its holding that the Fund did not waive its argument that he
never vested. Because the district court did not have the
benefit of Amara, we vacate its determination that the
payment of benefits constituted compensatory damages and
therefore the equitable remedy of surcharge was not
GABRIEL V. AEPF 35
“appropriate equitable relief,” 29 U.S.C. § 1132(a)(3)(B). On
remand, the district court must determine whether the
surcharge remedy is “appropriate equitable relief” in this
context, and if so, whether Gabriel has alleged a remediable
wrong, see Mertens, 508 U.S. at 254, that can survive the
Fund’s motion for summary judgment.
AFFIRMED IN PART and VACATED AND
REMANDED IN PART.
KOZINSKI, Circuit Judge, concurring:
I don’t object to the decision to remand so the district
court may consider whether Gabriel is entitled to the
equitable remedy of “surcharge” against the Fund under
CIGNA Corp. v. Amara, 131 S. Ct. 1866 (2011). But on the
record before us, I seriously doubt that Gabriel will prevail on
such a surcharge claim consistent with our opinion.
Gabriel claims he’s entitled to equitable relief from the
Fund in the form of a surcharge, see Amara, 131 S. Ct. at
1880, because the Fund’s inaccurate statements and payment
of benefits he hadn’t earned “induced Gabriel into an earlier
retirement than he could afford.” But we hold, in the course
of affirming the district court’s grant of summary judgment
to the Fund on Gabriel’s equitable estoppel claim, that
Gabriel wasn’t “ignorant of the true facts.” Op. 28. Gabriel
doesn’t dispute that he received a letter from the Fund on
November 20, 1979 informing him that he didn’t meet the
vesting requirements and would be terminated from the Plan.
We find the letter sufficient to inform him that he wasn’t
vested. Id. at 28–29. Thus, Gabriel can’t show that any
36 GABRIEL V. AEPF
reliance on the Plan’s representations was reasonable for
purposes of his equitable estoppel claim. See Renfro v. Funky
Door Long Term Disability Plan, 686 F.3d 1044, 1054–55
(9th Cir. 2012); Spink v. Lockheed Corp., 125 F.3d 1257,
1262 (9th Cir. 1997).
I can’t see how Gabriel could prevail on a surcharge claim
based on the same theory—namely, that the Fund’s
representations induced Gabriel into an early retirement.
Even assuming that someone in Gabriel’s position—who isn’t
vested in the Plan and thus isn’t entitled to benefits under the
Plan—has standing to pursue such a claim against the Fund,
surcharge requires “harm and causation,” Amara, 131 S. Ct.
at 1881. The claimed harm must be something more than the
mere violation of a statutory right to accurate statements;
otherwise, ERISA fiduciaries would be “strictly liable for
every mistake.” Skinner v. Northrop Grumman Ret. Plan B,
673 F.3d 1162, 1167 (9th Cir. 2012). In Skinner, we rejected
a surcharge claim brought by retirement plan beneficiaries
against the plan administrator because the beneficiaries
couldn’t show that they relied on the allegedly inaccurate
summary plan description, and thus “establish[ed] no harm
for which they should be compensated.” Id.
Gabriel would distinguish Skinner on the ground that,
unlike the Skinner plaintiffs, the Fund’s mistakes allegedly
“induced Gabriel into an earlier retirement than he could
afford.” But Gabriel’s argument is based on the premise that
he detrimentally relied on the Fund’s representations, and
we’ve already held that any such reliance was unreasonable
for purposes of Gabriel’s equitable estoppel claim. It would
be anomalous indeed to find that Gabriel’s unreasonable
reliance on the Fund’s inaccurate statements and payment of
benefits that he hadn’t earned—which we hold is insufficient
GABRIEL V. AEPF 37
for an equitable estoppel claim—is a sufficient injury for a
surcharge claim.
Nothing in Amara calls for such an outcome. In Amara,
the Court considered the availability of surcharge as a remedy
to redress damages caused by Cigna’s significantly
incomplete and misleading descriptions of its new employee
retirement plan, which made at least some employees worse
off. 131 S. Ct. at 1872–73, 1880. The Court stated that
surcharge may be an appropriate remedy for these violations,
even in the absence of detrimental reliance by individual
employees. Id. at 1880–81. That’s because, as the Court
explained, injury and causation might be proven in other
ways, such as by showing that the defendant’s
misrepresentations duped fellow employees in their
assessments of the new plan, who would have notified others.
Id. at 1881. But Gabriel hasn’t made, and can’t make, any
such argument here. The only harm alleged by Gabriel
resulted from his claimed personal reliance on the Fund’s
representations. We’ve already held that any such reliance
was unreasonable. Regardless of the scope of the surcharge
remedy contemplated in Amara, I can’t imagine it extends to
a reliance claim where the plaintiff was apprised of the true
facts. A contrary conclusion would result in “injustice to the
[Fund] or third parties,” George Gleason Bogert et al., The
Law of Trusts & Trustees § 861 (2014), and a form of strict
liability for every mistake that’s claimed to be relied on, even
if the reliance was unreasonable.
Therefore, unless Gabriel claims some other harm on
remand besides the harm that allegedly resulted from his
reliance on the Fund’s payment of benefits and incorrect
statements, the Fund would be entitled to summary judgment
on the issue of Gabriel’s entitlement to a surcharge.