Jody Rose v. PSA Airlines, Inc.

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PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 21-2207
JODY ROSE, as Administratrix of the Estate of Kyree Devon Holman,
Plaintiff - Appellant,
v.
PSA AIRLINES, INC.; PSA AIRLINES, INC. GROUP BENEFIT PLAN; UMR, INC.;
QUANTUM HEALTH, INC., a/k/a MyQHealth by Quantum; MCMC, LLC,
Defendants - Appellees,
and
PSA AIRLINES GROUP INSURANCE PLAN; PSA AIRLINES GROUP HEALTH
BENEFIT PLAN; PSA AIRLINES PLAN B EMPLOYEE BENEFIT PLAN; PSA
AIRLINES SHARED SERVICES ORG.,
Defendants.
Appeal from the United States District Court for the Western District of North Carolina, at
Charlotte. Graham C. Mullen, Senior District Judge. (3:19-cv-00695-GCM-DCK)
Argued: December 9, 2022 Decided: September 11, 2023
Before RICHARDSON, QUATTLEBAUM, and HEYTENS, Circuit Judges.
Affirmed in part, vacated in part, and remanded by published opinion. Judge Richardson
wrote the opinion, in which Judge Quattlebaum joined. Judge Heytens wrote an opinion
concurring in part and dissenting in part.
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ARGUED: Norris Arden Adams, II, ESSEX & RICHARDS, P.A., Charlotte, North
Carolina, for Appellant. Edward Joseph Meehan, GROOM LAW GROUP,
CHARTERED, Washington, D.C.; Brian D. Boone, ALSTON & BIRD LLP, Charlotte,
North Carolina, for Appellees. ON BRIEF: Caitlin Hale Walton, ESSEX RICHARDS,
P.A. Charlotte, North Carolina, for Appellant. Ross P. McSweeney, GROOM LAW
GROUP, CHARTERED, Washington, D.C., for Appellees PSA Airlines, Inc. and PSA
Airlines, Inc. Group Benefit Plan. Brandon C.E. Springer, ALSTON & BIRD LLP,
Charlotte, North Carolina, for Appellee UMR, Inc. Rachel Ann Smoot, TAFT
STETTINIUS & HOLLISTER, LLP, Columbus, Ohio, for Appellee Quantum Health, Inc.
Victoria Therese Kepes, Alfred Victor Rawl, Jr., GORDON REES SCULLY
MANSUKHANI LLP, Charleston, South Carolina, for Appellee MCMC, LLC.
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RICHARDSON, Circuit Judge:
The Employee Retirement Income Security Act’s § 502(a)(1)(B) allows a
beneficiary to “recover benefits due to him under the terms of his plan.” And ERISA’s
§ 502(a)(3) allows a beneficiary to sue for “other appropriate equitable relief.” This case
requires us to answer when—and under what conditions—a plaintiff may seek monetary
relief under one of those provisions.
Jody Rose’s son had a rare heart condition. He died at the age of twenty-seven,
awaiting a heart transplant, which Rose says that Defendants—who administered her son’s
employer-based health benefits program—wrongfully denied. So she sued on behalf of his
estate, seeking monetary relief under both § 502(a)(1)(B) and § 502(a)(3). The district
court dismissed both claims. As to Rose’s (a)(1)(B) claim, the court held that money was
not one of the “benefits” that her son was owed “under the terms of his plan.” And, as to
her (a)(3) claim, the court held that her requested monetary relief was too similar to money
damages and was thus not “equitable.”
We now affirm in part and vacate in part. The district court correctly held that
money was not one of the “benefits” that Rose’s son was “due” “under the terms of his
plan.” So it was right to dismiss her (a)(1)(B) claim. But we must vacate its complete
dismissal of Rose’s (a)(3) claim. While the district court correctly noted that
compensatory, “make-whole” monetary relief is unavailable under § 502(a)(3), it did not
consider whether Rose plausibly alleged facts that would support relief “typically”
available in equity. Montanile v. Bd. of Trs., 577 U.S. 136, 142 (2016). We thus remand
for the district court to decide in the first instance whether Rose can properly allege such a
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theory based on a Defendant’s unjust enrichment, including whether an unjust gain can be
followed to “specifically identified funds that remain in the defendant’s possession” or to
“traceable items that the defendant purchased with the funds.” Id. at 144–45
I. Factual and Procedural Background
It was Christmas Eve in 2018 when Rose’s son, Kyree Devon Holman, first found
out that he had a heart condition called myocarditis. Less than two months later—and only
a few short weeks after his twenty-seventh birthday—he was dead.
At the time, Kyree was working as a flight attendant for PSA Airlines, Inc. Like
many Americans, Kyree received health benefits through his employer. PSA Airlines runs
a “health and welfare benefit plan” for its employees, governed by ERISA. J.A. 13. The
Plan is “fully self-funded,” meaning that PSA Airlines “assumes the sole responsibility for
funding the Plan benefits out of its general assets.” J.A. 13. PSA Airlines is the named
“Plan Administrator” and “fiduciary” of the Plan. J.A. 14. But a smattering of other
companies—including UMR, Inc., Quantum Health, Inc., and MCMC, LLC—help PSA
Airlines provide administrative services, like reviewing benefits claims, for the Plan. 1
When doctors discovered Kyree’s health condition, they determined that he needed
a heart transplant to survive and prepared to proceed with surgery as soon as his benefits
claim was approved. By the second week of January 2019, Kyree’s doctors had submitted
the required information and had twice requested approval for the surgery. Yet, on January
1
The Plan’s terms are not themselves in the record. But because we are at the
pleading stage, our characterization of the Plan’s terms—like all the facts that we recount
here—are taken from Rose’s complaint, read in the light most favorable to her.
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17, Defendants denied his request, asserting that the treatment that he sought was
experimental. When Kyree pushed for a re-evaluation, his claim was once again denied,
this time on the grounds that he did not meet certain alcohol-abuse criteria.
The terms of Kyree’s plan, however, contained no such criteria. So Kyree’s doctors
appealed once more, noting that Kyree would not survive without a heart transplant. But
once more—despite realizing the life-or-death nature of the decision—Defendants denied
Kyree’s request, based on these same supposed criteria.
By now it was February 1, and time was running short. Kyree’s doctors thus sought
an “expedited” external claim review, which was conducted by MCMC. Yet, although
federal law requires “expedited” reviews to be completed within—at most—seventy-two
hours, see 45 C.F.R. § 147.136(d)(3)(iv) (2019), MCMC treated Kyree’s review as a
“standard” review to be completed within forty-five days. Kyree died a little over a week
after submitting his external review application (five days after a decision should have been
rendered). Ultimately, after completing its review on March 6, MCMC vindicated Kyree,
overturning the previous claim denials. But it was too little, too late: By then, Kyree had
been dead for almost a month.
Rose, as administratrix of Kyree’s estate, sued PSA Airlines, the Plan, UMR,
Quantum, and MCMC, seeking relief for a wrongful denial of benefits under ERISA
§ 502(a)(1)(B) or, alternatively, for a breach of fiduciary duty under § 502(a)(3). 2 She
2
Subparagraph 502(a)(1)(B) and § 502(a)(3) of ERISA are codified at 29 U.S.C.
§ 1132(a)(1)(B) and (a)(3), respectively. But, in keeping with the trend in this practice
area, we refer to them and the other statutory provisions by their ERISA designation, not
by their place in the U.S. Code.
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sought declaratory and injunctive relief, monetary damages, and “appropriate equitable
relief” including “surcharge, disgorgement, constructive trust, restitution, [and] equitable
estoppel.” J.A. 40–41. But the district court granted Defendants’ motion to dismiss both
claims under Rule 12(b)(6). Rose timely appealed that dismissal, which we review de
novo. See Mays v. Sprinkle, 992 F.3d 295, 299 (4th Cir. 2021).
II. Background on ERISA
ERISA governs “employee benefit plans” that cover employees’ retirement
benefits, death benefits, and, as relevant for this case, health benefits. ERISA has a host
of provisions, one of which imposes fiduciary duties on those who administer these plans.
See Varity Corp. v. Howe, 516 U.S. 489, 496 (1996).
If an ERISA fiduciary breaches their fiduciary duty, § 409 makes them liable to the
plan. And § 502(a)(2) allows plan participants to bring a derivative action to enforce § 409
and “to obtain recovery for losses sustained by the plan because of breaches of fiduciary
duties.” In re Mut. Funds Inv. Litig., 529 F.3d 207, 210 (4th Cir. 2008).
But recovery under § 502(a)(2) goes to the plan, not to the beneficiary bringing the
action. Mass. Mut. Life Ins. Co. v. Russell, 473 U.S. 134, 140 (1985). Of course, the
beneficiary might benefit indirectly by increasing their plan’s assets. Yet if the beneficiary
wants to recover directly, like Rose does, then she would need to sue under a different
provision of § 502’s enforcement scheme.
There are two major provisions to pick from. Subparagraph 502(a)(1)(B) allows a
“beneficiary” to bring suit “to recover benefits due to [her] under the terms of [her] plan,
to enforce [her] rights under the terms of the plan, or to clarify [her] rights to future benefits
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under the terms of the plan.” If that doesn’t provide the beneficiary with the relief that she
seeks, then she can resort to § 502(a)(3), the enforcement scheme’s “catchall” provision,
see Varity, 516 U.S. at 512, which allows a beneficiary to sue “to enjoin any act or practice
which violates [ERISA] or the terms of the plan,” or “to obtain other appropriate equitable
relief (i) to redress such violations or (ii) to enforce [ERISA] or the terms of the plan.”
With that background in mind, we turn to Rose’s claims under § 502(a)(1)(B) and
§ 502(a)(3).
III. Subparagraph 502(a)(1)(B) Claim
Rose’s § 502(a)(1)(B) claim must fail. Plaintiffs seeking relief under § 502(a)(1)(B)
generally have two options: either (1) pay for the treatment yourself and seek
reimbursement later, or (2) seek an injunction to force the plan provider to give you the
treatment. See Aetna Health, Inc. v. Davila, 542 U.S. 200, 211 (2004). And these two
choices are reflected in the statutory text, which says that a plaintiff may sue either “to
recover benefits due to him under the terms of his plan” (i.e., seek reimbursement—
“recovery”—of out-of-pocket expenses), or “to enforce his rights under the terms of the
plan” (i.e., seek an injunction). 3 § 502(a)(1)(B) (emphasis added). But § 502(a)(1)(B) does
not authorize a plaintiff to seek the monetary cost of a benefit that was never provided.
The reason is that both provisions of § 502(a)(1)(B) are limited by “the terms of the
plan.” That “statutory language speaks of ‘enforcing’ the ‘terms of the plan,’ not of
3
Subparagraph 502(a)(1)(B) also allows a plaintiff to sue “to clarify his rights to
future benefits under the terms of the plan.” 29 U.S.C. § 1132(a)(1)(B). But because Kyree
is dead, he has no rights to future health benefits. So the declaratory relief that this
provision authorizes does not apply.
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changing them.” CIGNA Corp. v. Amara, 563 U.S. 421, 436 (2011) (cleaned up). Though
the terms of the Plan are not in the record—we are at the pleading stage, after all—Rose
has not alleged in her complaint that the Plan’s terms contemplated paying money directly
to Kyree. Instead, Rose alleges that Kyree’s doctors requested that the Plan approve
coverage for Kyree’s surgery—meaning Kyree, through his doctors, filed a claim with the
Plan which, if approved, would then pay the doctor to operate on Kyree. So the “benefit”
that Kyree would be getting under the “terms of the plan” would be the surgery, not a direct
monetary payment. Perhaps, if he had been able to pay for the costly surgery out-of-pocket,
then the Plan would have been required to reimburse him. See Davila, 542 U.S. at 211.
But that did not happen here.
In short, Rose does not seek to recover a benefit under the terms of the Plan. She
seeks to recover the monetary cost of the benefit that was never provided. But that is a
remedy that § 502(a)(1)(B)—which requires us to enforce the Plan’s terms as written—
does not allow. While Davila’s choice of remedies (pay now and seek reimbursement, or
sue for an injunction and wait) may leave plan beneficiaries like Kyree in a bind, we must
do what the statute commands. And that requires affirming the dismissal of Rose’s
§ 502(a)(1)(B) claim.
IV. Paragraph 502(a)(3) Claims
Because Rose cannot prevail under § 502(a)(1)(B), we must consider whether she
is entitled to relief under § 502(a)(3), the “catchall” provision of ERISA’s civil
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enforcement scheme. Varity, 516 U.S. at 512. 4 That provision allows a plan beneficiary
to seek an injunction or “other appropriate equitable relief” to either (1) “enforce” ERISA’s
terms or “the terms of the plan,” or (2) “redress” a violation of those terms.
The key question that we must answer is whether the relief that Rose seeks—the
monetary cost of the surgery that her son was wrongfully denied—qualifies as “equitable
relief” under the statute. As the district court recognized, compensatory damages intended
to provide “monetary relief for all losses . . . sustained as a result of the alleged breach of
fiduciary duties” are legal, not equitable, relief. J.A. 85 (quoting Mertens v. Hewitt Assocs.,
508 U.S. 248, 255 (1993)). So the district court was correct not to give her the cost of the
surgery as compensation for Kyree’s death. But Rose also alleges the defendants have
been unjustly enriched by keeping the money they should have paid Kyree’s doctors. 5
4
Defendants contended in their briefing that Rose cannot proceed with her
§ 502(a)(3) claim because she also pursued a claim for denial of benefits under
§ 502(a)(1)(B). And it is true that “where Congress elsewhere provided adequate relief for
a beneficiary’s injury,” the beneficiary cannot also obtain relief under § 502(a)(3) since
such relief would not be “appropriate.” Varity, 516 U.S. at 515. But alternative “relief” is
only “adequate” if the plaintiff’s “injury is redressable elsewhere in ERISA’s scheme.”
Korotynska v. Metro. Life Ins. Co., 474 F.3d 101, 106 (4th Cir. 2006). Rose’s incorrect
argument that her son’s injury was redressable under § 502(a)(1)(B) does not mean that it
was. Plaintiffs are allowed to plead in the alternative, “so nothing would have prevented
[Rose] from suing under both provisions,” § 502(a)(1)(B) and § 502(a)(3). Hayes v.
Prudential Ins. Co. of Am., 60 F.4th 848, 855 (4th Cir. 2023).
5
Though Rose frames the relief that she requests under § 502(a)(3) in many ways—
discussing “surcharge, disgorgement, constructive trust, [and] restitution,” J.A. 40–41—
the Supreme Court has emphasized that the “labels” for such benefits-based relief are
unimportant. See Liu v. SEC, 140 S. Ct. 1936, 1942–44 (2020) (“[E]quity practice long
authorized courts to strip wrongdoers of their ill-gotten gains, with scholars and courts
using various labels for the remedy,” including “accounting,” “restitution,”
“disgorgement,” and “constructive trust.”). And “[n]o matter the label,” the Court has said,
(Continued)
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And—subject to certain limits—monetary relief based on a defendant’s unjust enrichment
can be “equitable.”
A. When is monetary relief “equitable”?
Courts must often determine whether a plaintiff’s requested relief is “equitable.”
That is because many federal statutes authorize courts to award “equitable relief” or
“equitable remedies” to plaintiffs suing under their terms. See Samuel L. Bray, The
Supreme Court and the New Equity, 68 Vand. L. Rev. 997, 1013 n.76 (2015) (listing some
statutes). Over the past thirty years, the Supreme Court has taken an interest in deciding
what relief counts as “equitable” under those statutes. The bulk of the Court’s cases, like
this one, arose under § 502(a)(3) of ERISA. See Mertens v. Hewitt Assocs., 508 U.S. 248(1993); Great-West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204 (2002); Sereboff v.
Mid Atl. Med. Servs., Inc., 547 U.S. 356 (2006); CIGNA Corp. v. Amara, 563 U.S. 421(2011); US Airways, Inc. v. McCutchen, 569 U.S. 88 (2013); Montanile v. Bd. of Trs., 577
U.S. 136 (2016). But the approach that it developed did not end there. Instead, the Court
a “profit-based measure of unjust enrichment reflected a foundational principle: “It would
be inequitable that a wrongdoer should make a profit out of his own wrong.” Id. at 1943
(cleaned up) (quoting Root v. Railway Co., 105 U.S. 189, 207 (1881)). At base, Rose
argues that it would be inequitable for defendants to benefit—i.e., retain the cost of the
surgery—because they breached their fiduciary duty to Kyree. So unjust enrichment is the
allegation we most closely analyze.
To the extent that Rose seeks “equitable estoppel,” that remedy is plainly
inapplicable to her case. Estoppel is not a monetary remedy at all. Instead, it is a remedy
aimed at holding the defendant to their promises when those promises engender good faith
reliance by the plaintiff. 3 John Norton Pomeroy, A Treatise on Equity Jurisprudence
§ 804, at 189 (Spencer W. Symons ed., 5th ed. 1941). But Rose does not contend that the
plan’s terms were misrepresented to Kyree, thereby inducing him to give up something;
instead, her argument is that the actual terms were not followed. So she does not actually
seek anything resembling “estoppel.”
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has extended that approach to other statutes too. See Liu v. SEC, 140 S. Ct. 1936, 1942
(2020) (citing Mertens, Great-West, Amara, and Montanile when considering the meaning
of “equitable relief” under the Securities Act of 1933).
The focus of these cases is often on whether a plaintiff’s plea for money is a request
for an “equitable” remedy or a “legal” remedy. Our focus is the same. To answer that
question, we first consider—more broadly—what distinguishes legal remedies from
equitable ones. Then we investigate how to apply this distinction to Rose’s monetary
claims.
1. The distinction between “legal” and “equitable” remedies
The term “equitable relief” references the Anglo-American tradition of “the divided
bench.” Great-West, 534 U.S. at 212. That is, in both England and the United States, there
were once separate “courts of law” and “courts of equity.” These courts used different
procedures, had different substantive rules, and—most critically here—offered different
remedies. Bray, The New Equity, supra, at 998–99. While the separate courts were
gradually merged over the course of the nineteenth and twentieth centuries, the distinction
between “legal” and “equitable” remedies remains salient. Id.
Untangling the situations when equitable relief was appropriate from those in which
legal relief was available is difficult. The remedies that courts of equity traditionally
offered were complicated and nuanced because those courts’ jurisdiction was complicated
and nuanced as well. But, as a baseline, equity existed only on the backdrop of the law; its
role was to provide relief where the law was inadequate. See F.W. Maitland, Equity: A
Course of Lectures 19 (John Brunyante ed., 2d ed. 1936).
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Sometimes, that meant merely providing different remedies for a given cause of
action. For instance, perhaps a party suing for breach of contract thought that money
damages could not compensate them adequately for the breach. So—rather than sue in a
court of law for money damages—the party could instead choose to sue in equity for
specific performance. Thus, in a sense, courts of equity shared “concurrent jurisdiction”
with courts of law over contract disputes. See id. at 18–20; Samuel L. Bray, Equity, Law,
and the Seventh Amendment, 100 Tex. L. Rev. 467, 470 (2022). And we might think that
the critical distinction between “equitable” and “legal” remedies is that “equitable”
remedies were offered by equitable courts—but not courts of law—in these concurrent-
jurisdiction cases.
Other times, suits were brought in equity because the courts of law didn’t recognize
a cause of action for them at all. The canonical example is the “law” of trusts—i.e., the
concept that one person could own legal title to property but be obligated to manage it as a
fiduciary on behalf of someone else—which was developed in equity. 6 See Bray, Equity,
Law, and the Seventh Amendment, supra, at 470. Courts of law refused to recognize the
law of trusts. See R.H. Helmholz, The Early Enforcement of Uses, 79 Colum. L. Rev.
1503, 1503 & n.2, 1304 & n.5–6 (1979). So trust suits had to be brought in courts of equity,
making them fall within equity’s “exclusive jurisdiction.” See Bray, Equity, Law, and the
6
It bears stating clearly that the equitable remedy of the constructive trust and the
more substantive “law” of trusts are quite different. “An express trust and a constructive
trust are not divisions of the same fundamental concept. They are not species of the same
genus. They are distinct concepts.” Restatement (First) of Restitution § 160 cmt. a. Our
references to “trust-specific remedies” do not include constructive trusts but rather refer to
the remedies, like surcharge, that are attendant and unique to the substantive law of trusts.
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Seventh Amendment, supra, at 470. One could thus fairly characterize any remedy
available in these exclusive-jurisdiction cases as an “equitable,” rather than “legal,” remedy
since it was only available in an equity court.
This dichotomy meant that courts of equity could offer broader relief within their
exclusive jurisdiction because they did not have to worry about what relief was available
in courts of law. Remember, equity steps in where the law runs out. If there is no law,
then equity can do things that the law would normally cover. But if there is law, then equity
is excluded from taking certain actions. So, in concurrent-jurisdiction cases, courts of law
and courts of equity offered notably different relief. That was the whole point of the
concurrent jurisdiction—to offer uniquely “equitable” remedies. But in “exclusive
jurisdiction” cases, like suits for breach of trust, only courts of equity could hear the case,
and they offered a correspondingly wider range of remedies that often looked a lot like the
remedies traditionally seen at law.
2. Adding money to the picture
To this point, we have been speaking about historical “remedies” broadly. But it is
now time to address what matters to these parties: money. While courts of law and equity
created a dividing line between themselves for claims involving money, that division, like
everything in this field, is nuanced.
As first-year law students might learn in their Civil Procedure class, the
quintessential legal remedy—both before and after the courts of law and equity merged—
is compensatory damages: money “ordered to be paid to . . . a person as compensation for
loss or injury.” Damages, Black’s Law Dictionary (11th ed. 2019). And the quintessential
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equitable remedy is the injunction. (Students might also learn about the equitable remedy
of specific performance in their Contracts class.) Those students might thus come to think
that a “legal” remedy is just another term for monetary remedies, while an “equitable”
remedy simply means non-monetary ones.
The actual history is less simple. Money does not neatly divide, and never has neatly
divided, law from equity. There were many non-monetary legal remedies. See Samuel L.
Bray, The System of Equitable Remedies, 63 UCLA L. Rev. 530, 558–62 (2016)
(discussing, among others, the writs of mandamus, habeas corpus, replevin, and ejectment).
And, likewise, there were many monetary equitable remedies. See id. at 554–55
(discussing the constructive trust and the equitable lien). Moreover, the types of monetary
relief available in equity differed depending on whether the suit was within equity’s
exclusive or concurrent jurisdiction.
The general proposition that equitable courts could offer broader remedies in
exclusive-jurisdiction cases than in concurrent-jurisdiction cases carried through to
monetary remedies. So courts of equity acting in exclusive-jurisdiction cases had a
relatively free hand to award financial remedies. At times, they could even order
defendants to pay “equitable compensation”—in trust cases, called a “surcharge”—which
is a remedy essentially equivalent to money damages. Samuel L. Bray, Fiduciary
Remedies, in The Oxford Handbook of Fiduciary Law 449, 456 (Evan J. Criddle et al. eds.,
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2019). Like legal damages, “equitable compensation” or “surcharge” subjected the trustee
to personal liability based on the plaintiff’s losses. Id. at 456–58. 7
Courts of equity in concurrent-jurisdiction cases could sometimes provide monetary
relief too, but they were more constrained. Most relevantly, a court of equity could use
money to remedy “unjust enrichment.” See Bray, The System of Equitable Remedies,
supra, at 553–56. Unjust enrichment is somewhat self-defining: “A person is unjustly
enriched if the retention of [a] benefit would be unjust.” Restatement (First) of Restitution
§ 1 cmt. a (1937). Sometimes that benefit was money, and courts of equity could award
equitable restitution by ordering the unjustly enriched to give that “wrongfully obtained”
money to its rightful owner either via a constructive trust or an equitable lien. 8 See 1 Dan
7
One “central” remedy in breach-of-trust cases was an “accounting for profits,” an
“investigative process that culminates in an award to the plaintiff of the defendant
fiduciary’s profits.” See Bray, Fiduciary Remedies, supra, at 456; see also Bray, Equity,
Law, and the Seventh Amendment, supra, at 493–94 (describing fiduciary law as “an
outgrowth of trust law . . . belonging to the exclusive jurisdiction” of equity). In other
words, if the accounting discovered that the trustee had wrongfully profited off of trust
property, then a beneficiary could sue him for the profits through the mechanism of an
accounting. And, in contrast to most equitable monetary remedies, an accounting subjected
the trustee to personal liability, as tracing the misappropriated property was not required.
See Bray, Fiduciary Remedies, supra, at 454. But unlike legal damages, the accounting
remedy turned on the trustee’s gain and not the plaintiff’s loss. See id.; see also Great-
West, 534 U.S. at 214 n.2.
8
“Rightful” owner does not necessarily mean “original” owner. At equity, plaintiffs
could seek a defendant’s unjustly gained benefit rather than merely trying to recover their
losses. See 1 Dobbs & Roberts, supra § 1.1, at 4 (explaining that equitable restitution,
unlike legal damages, is “measured by defendant’s gains, not by plaintiff’s losses”);
Restatement (First) of Restitution § 1 cmt. e; id. §1 cmt. b (noting that a “benefit” includes
saving the defendant from an expense). Thus, if Tayloe steals ten dollars of Landry’s to
invest in a company that goes on to cure cancer, a court of equity might award Landry all
of Tayloe’s profits.
(Continued)
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B. Dobbs & Caprice L. Roberts, Law of Remedies § 1.1, at 4–5 (3d ed. 2018); Bray,
Fiduciary Remedies, supra, at 553–56. Yet—unlike with exclusive-jurisdiction monetary
remedies—the plaintiff had to identify the specific property (funds) that the defendant
wrongfully possessed and that rightfully belonged to the plaintiff. See Great-West, 534
U.S. at 213 (“[A] plaintiff could seek restitution in equity, ordinarily in the form of a
constructive trust or an equitable lien, 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.”); see also Montanile, 577 U.S. at 145; McCutchen, 569 U.S.
at 95; Sereboff, 547 U.S. at 362–63.
3. When can plaintiffs get money as “equitable relief” under ERISA?
This set up naturally raises a question: Because courts of equity could provide a
remedy that looked like money damages in breach-of-trust cases, does that mean that such
a remedy is “equitable relief” under ERISA? See, e.g., John H. Langbein, What ERISA
Means by Equitable, 103 Colum. L. Rev. 1317 (2003) (arguing that trust-law remedies
should be available under ERISA). In other words, does “equitable relief” under ERISA
And while the plaintiff had to suffer some type of harm at the hands of the unjustly
enriched that made him the rightful owner of the enrichment, that harm did not have to be
a tangible loss. See George E. Palmer, 1 Law of Restitution §2.11 (1978); Restatement
(First) of Restitution § 1 cmt. e. Instead, the harm may be a wrongful interference with the
plaintiff’s rights that caused the unjust gain. For instance, if a man uses another man’s egg
washer without permission, he must give the owner the ill-gotten egg profits—even if he
does not damage the machine—because he has interfered with the owner’s exclusive-use
rights. See Olwell v. Nye & Nissen Co., 26 Wash. 2d 282, 285–86 (1946). Likewise, a
fiduciary who profits by breaching his duty “is ordinarily accountable to his beneficiary
for the profit, although the beneficiary suffered no loss.” Restatement (First) of Restitution
§ 1 cmt. e; Palmer, supra, §2.12.
16
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include relief available in exclusive-jurisdiction cases rather than just the relief available
in concurrent-jurisdiction cases?
No. Plaintiffs can get monetary relief under § 502(a)(3) only if such relief was
“typically available in equity.” Montanile, 577 U.S. at 142 (quoting Mertens, 508 U.S. at
256). Exclusive-jurisdiction remedies—like the trust remedy of surcharge—were not
“typically” available. Rather, as the Supreme Court has used the term, to be a “typically”
available remedy, the relief must have been traditionally available in concurrent-
jurisdiction cases. And in concurrent-jurisdiction cases—as the Supreme Court has
acknowledged and as we have explained—equitable courts could sometimes award
monetary restitution for unjust enrichment, 9 but they could not award the broad, personal,
and compensatory relief available in law and in exclusive-jurisdiction cases.
In short: A plaintiff can recover money under § 502(a)(3) only if a court of equity
could have awarded it in a concurrent-jurisdiction case, and a court of equity could award
money when a plaintiff pointed to specific funds that he rightfully owned but that the
defendant possessed as a result of unjust enrichment. See Montanile, 577 U.S. at 142–43.
There’s a lot going on there. And a great deal went into building this framework. Its thus
worth going over the steps the Supreme Court took to erect it.
The Court laid its first bricks in Mertens v. Hewitt Associates, 508 U.S. 248 (1993).
Mertens announced that courts looking to see whether a sought remedy is “equitable” under
9
To be clear, we are not saying that the only time a court of equity could award
monetary relief in concurrent-jurisdiction cases was when remedying unjust enrichment.
That question is not before us. But we focus on unjust enrichment because that is the only
plausible path to recovery on Rose’s allegations.
17
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ERISA may look only to “those categories of relief that were typically available in equity.”
Mertens, 508 U.S. at 256 (focusing on the divided law-equity bench and its technical
refinements). And “compensatory damages” were not typically available in equity. 10 Id.Mertens eschewed remedies that courts of equity could award only in “exclusive
jurisdiction” cases because it rejected a reading that would allow relief available only in
breach-of-trust cases Mertens, 508 U.S. at 256–57. Trust law, Mertens held, cannot
determine the outer bounds of “equitable relief” under ERISA since the remarkable
remedies available in such excusive-jurisdiction cases were “purely legal” and ordinarily
“beyond the scope” of an equity court’s authority. Mertens, 508 U.S. at 256 (quoting 1
Pomeroy, supra, § 181, at 257). Real equitable remedies are those that were typically
available, not those that were available only in specialized cases. 11
About a decade after Mertens, the Supreme Court revisited the issue of what ERISA
means by “equitable relief” in Great-West Life & Annuity Ins. Co. v. Knudson, 534 U.S.
204 (2002). And Great-West reinforced the same approach used in Mertens: “the term
10
One might say that the first brick was actually laid in Massachusetts Mutual Life
Insurance Company v. Russell, 473 U.S. 134, 148 (1985), when the Court explained that
“there is a stark absence—in [ERISA] itself and in its legislative history—of any reference
to an intention to authorize the recovery of extracontractual damages.”
11
The Court additionally reasoned that “equitable relief” could not include trust-
specific remedies because that would make the modifier “equitable” superfluous. Mertens,
508 U.S. at 257–58. In § 502(a)(3), the word “equitable” was intended to work as a
limitation on what relief a court could provide. Yet if the word were taken to include “all
relief available for breach of trust,” id. at 257, including relief akin to money damages, id.
at 256, then the statute would mean the same thing whether the word “equitable” was
included or not. That would “deprive of all meaning the distinction Congress drew
between . . . ‘equitable’ and ‘legal’ relief” within § 502. Id. at 258 (citing 29 U.S.C.
§ 1132(g)(2)(E)). That outcome, the Court stated, was “unacceptable.” Id.18
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‘equitable relief’ in § 502(a)(3) must refer to ‘those categories of relief that were typically
available in equity.” Id. at 219 (quoting Mertens, 508 U.S. at 256). The “special equity-
court powers applicable to trusts [do not] define the reach of § 502(a)(3).” Id. Instead, the
“trust remedies are simply inapposite” because they were special to trust cases, not typical
of cases brought in equity more broadly. Id. To determine what relief was typically
available in equity, we cannot look to equity’s exclusive domain.
Great-West did not just confirm the Mertens approach: it added layers to it,
explaining what that approach means for monetary remedies. The Court discussed the
concept of equitable restitution—a remedy awarding money to the plaintiff “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.” Great-West, 534 U.S.
at 213 (citing 1 Dobbs & Roberts, supra, § 4.3, at 587–88; see also Great-West, 534 U.S.
at 229 (Ginsburg, J., dissenting). According to Great-West, however, not all restitutionary
remedies count as “equitable.” See 534 U.S. at 212. Some, like the constructive trust and
the equitable lien, certainly qualify. Id. at 213. But that label—“equitable” or “legal”—
“depends on ‘the basis for the plaintiff’s claim’ and the nature of the underlying remedies
sought.” Id. (cleaned up) (quoting Reich v. Cont’l Cas. Co., 33 F.3d 754, 756 (7th Cir.
1994) (Posner, J.)). And, “for restitution to lie in equity, the action generally must seek not
to impose personal liability on the defendant, but to restore to the plaintiff particular funds
or property in the defendant’s possession.” Great-West, 534 U.S. at 214.
In other words, Great-West tells us that, to qualify as “equitable,” restitutionary
relief imposed to remedy unjust enrichment must be proprietary, not personal: The
19
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plaintiff cannot recover out of the defendant’s general assets. Instead, the plaintiff must
(1) identify certain property or money “belonging in good conscience” to him, and (2) that
property must “clearly be traced to particular funds or property in the defendant’s
possession.” Great-West, 534 U.S. at 213; see also Bray, Fiduciary Remedies, supra, at
455 (discussing the difference between “personal” and “proprietary” remedies). Only after
performing this “tracing” could courts of equity “order a defendant to transfer title (in the
case of the constructive trust) or to give a security interest (in the case of the equitable lien)
to a plaintiff who was, in the eyes of equity, the true owner.” Great-West, 534 U.S. at 214.
Montanile is the most recent Supreme Court case to take up this issue, and it follows
the same line. Montanile reiterates that “equitable relief” in ERISA refers to “those
categories of relief that were typically available in equity.” Montanile, 577 U.S. at 142
(quoting Mertens, 508 U.S. at 256). And it explains that “[e]quitable remedies are, as a
general rule, directed against some specific thing; they give or enforce a right to or over
some particular thing rather than a right to recover a sum of money generally out of the
defendant’s assets.” Id. at 145 (cleaned up).
To sum up, these cases teach the same lessons. First is a lesson about how to
interpret “equitable relief.” We must ask what relief was “typically available in equity.”
That means that we must look to equity’s traditional concurrent jurisdiction; pointing to its
exclusive jurisdiction is not enough. 12 True, the Supreme Court did not use the term
12
Indeed, in some cases, even pointing to concurrent jurisdiction may not be enough
if the remedy was available only in a small sliver of concurrent-jurisdiction cases. See
(Continued)
20
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“concurrent.” But its application of the “typically available” test made it clear that is what
it meant: The Court consistently rejected trust-specific remedies on the grounds that they
were from the equity courts’ “exclusive jurisdiction.” Mertens, 508 U.S. at 256; see also
Great-West, 534 U.S. at 219.
That leads us to the second lesson: A plaintiff alleging unjust enrichment can get a
monetary remedy under ERISA only if she seeks specific funds that are wrongfully in the
defendant’s possession and rightfully belong to her. Courts cannot award her relief that
amounts to personal liability paid from the defendant’s general assets to make the plaintiff
whole. 13
The Supreme Court has not, however, been perfectly consistent in its view. In
between Great-West and Montanile, the Supreme Court decided CIGNA Corp. v. Amara,
563 U.S. 421 (2011). There, the Supreme Court suggested it might allow certain plaintiffs
to pursue “make-whole,” loss-based, monetary relief under § 502(a)(3). Id. at 442. And it
did so because such relief was analogous to “surcharge,” an “exclusively equitable” remedy
under the law of trusts. Id. It thus broke with Mertens and Great-West’s explicit refusal
Great-West, 534 U.S. at 211–12 (acknowledging that an injunction for past-due money was
available in some breach-of-contract cases but was not “typically available in equity”).
13
This should sound familiar. As we saw when we reviewed the history of equity,
the decision to so limit restitution for unjust enrichment flows naturally from the choice to
limit “equitable relief” under § 502(a)(3) to what was available in concurrent-jurisdiction
cases. Another natural consequence of tying ERISA’s “equitable relief” to the relief
historically available in concurrent-jurisdiction cases is that the funds sought need not have
originated with the plaintiff. It is enough that the funds are an unjust benefit that rightfully
belong to the plaintiff—either because they were stolen from him or because the defendant
interfered with the plaintiff’s interests to get them. See supra note 8.
21
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to look to trust-law remedies and their implicit distinction between exclusive and
concurrent jurisdiction. 14
As the Supreme Court has since acknowledged, this part of Amara was dicta. See
Montanile, 577 U.S. at 148 n.3; see also McCravy v. Metropolitan Life Ins. Co., 690 F.3d
176, 181 n.2 (4th Cir. 2012) (assuming Amara was dicta). And, as we have recognized,
adopting it would be a “striking development” that “expanded the relief” available under
§502(a)(3) to include “make-whole relief” such as “surcharge.” McCravy, 690 F.3d at 180
14
Amara ignored Mertens and Great-West’s refusal to look to trust-law remedies in
defining § 502(a)(3)’s “appropriate equitable relief.” But Amara was not actually faced
with interpreting § 502(a)(3). The plaintiff there had sued their employer for adopting a
new plan. Amara, 563 U.S. at 424. The district court agreed that the employer had
“violated its obligations under ERISA” and ordered the plan to be “reformed” and the
employer “to pay benefits accordingly.” Id. at 425. It rooted its decision in § 502(a)(1)(B).
As you may recall from above, that provision only allows a plaintiff to seek relief under
“the terms of the plan.” And the plaintiff’s gripe in Amara was not that his employer had
violated the terms of his plan but that the employer had violated ERISA by wrongfully
changing those terms. So, the Supreme Court held, § 502(a)(1)(B) did not authorize the
district court to reform the plaintiff’s plan and award benefits. See Amara, 563 U.S. at
435–38. It thus vacated and remanded.
You might think the opinion would stop there. But the Court continued to “identify
equitable principles that the court might apply on remand.” Id. at 425 (emphasis added).
The “equitable principles” that Amara then identified are inconsistent with Mertens and
Great-West. Amara suggested that the plaintiff could seek “make-whole relief,” but only
by reference to trust law: Because he alleged a “breach of trust,” the plaintiff could seek a
“surcharge.” 563 U.S. at 442. In other words, “the fact that the defendant in this case,
unlike the defendant in Mertens, is analogous to a trustee makes a critical difference.” Id.But any such distinction is not one that matters under the reasoning of Great-West
and Mertens. Great-West and Mertens required looking to “those categories of relief that
were typically available in equity.” Mertens, 508 U.S. at 256. Mertens rejected the idea
that the statutory phrase “equitable relief” meant “whatever relief a court of equity [would
be] empowered to provide in the particular case at issue.” Id. In other words, according
to Mertens, whether a given remedy is “equitable” under the statute does not depend on the
“particular case” that plaintiff brings, or on the identities of the plaintiff and the defendant.
On this logic, it should not matter whether the defendant is analogous to a trustee because
trust-specific remedies are “simply inapposite.” See Great-West, 534 U.S. at 219.
22
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(citation omitted). Still, we followed Amara’s dicta shortly after it was decided, allowing,
for the first time in our Circuit, plaintiffs to seek “make-whole relief” under § 502(a)(3)
because it was available in courts of equity in trust cases. McCravy, 690 F.3d at 180(citation omitted). 15 And we have adhered to that understanding, applying it just two years
ago in Peters v. Aetna, Inc.. 2 F.4th 199, 216 (4th Cir. 2021) (“The Supreme Court has
recognized surcharge as a form of ‘appropriate equitable relief’ available under
§ 502(a)(3).” (quoting Amara, 563 U.S. at 439, 441–42)).
The problem is that the Supreme Court has since rejected the turn that it
contemplated in Amara and therefore rejected the turn that we took in McCravy. In
Montanile, the Court went beyond labeling Amara’s reasoning “dicta” and expressly
declared that the “interpretation of ‘equitable relief’ in Mertens [and] Great-
West . . . remains unchanged.” Montanile, 577 U.S. at 148 n.3 (emphasis added). And, as
discussed, that interpretation is flatly inconsistent with Amara’s suggestions. Indeed, aside
from these chidings, Montanile did not otherwise cite Amara. The implication was clear:
Amara’s approach is antithetical to a proper § 502(a)(3) analysis.
15
On the same day the Supreme Court handed down its decision in Amara, we had
issued a panel decision in McCravy. In the original opinion, the McCravy panel rejected
the claim that the special equity-court powers applicable to trusts defined ERISA’s reach.
See McCravy v. Metropolitan Life Ins. Co., 650 F.3d 414, 418–20 (4th Cir. 2011); see also
LaRue v. DeWolff, Boberg & Assocs., 450 F.3d 570, 575–77 (4th Cir. 2006) (reaching the
same conclusion), vacated on other grounds, 552 U.S. 248 (2008). But, recognizing that
Amara advocated for a dramatically different rule from Mertens and Great-West about
what relief was available under § 502(a)(3), we granted a panel rehearing, vacated that
earlier decision, and replaced it with a new one. See McCravy, 690 F.3d 176.
23
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Since Montanile’s approach—which is really Mertens’s and Great-West’s
approach—is inconsistent with Amara’s approach, it is also inconsistent with ours. We
currently allow plaintiffs suing for breach of fiduciary duty to seek make-whole,
compensatory relief under § 502(a)(3) on the logic that such relief was available for breach
of trust. Even the name that we give such relief—“surcharge”—is a term specific to trust
law. See Bray, Fiduciary Remedies, supra, at 456 (calling “surcharge” a name “redolent
of trusts”). But Mertens and Great-West made plain that trust-law remedies do not count
as “equitable” unless they were “typically available in equity.” Mertens, 508 U.S. at 256;
Great-West, 534 U.S. at 210. And Montanile reinforced that test: “In many situations”—
that is, in equity’s exclusive jurisdiction—“an equity court could establish purely legal
rights and grant legal remedies which would otherwise be beyond the scope of its
authority.” 577 U.S. at 147 (internal quotation marks omitted) (quoting Mertens, 508 U.S.
at 256). Yet “these legal remedies were not relief ‘typically available in equity.’” Id. at
147 (quoting Mertens, 508 U.S. at 256). “Typical” relief is defined by equity’s concurrent
jurisdiction. So, while our Circuit’s resort to trust law might have made sense in the
immediate aftermath of Amara, it no longer does. 16 Montanile revived Mertens and Great-
West and put Amara’s discussion to rest.
16
The Supreme Court’s recent decision in Liu v. SEC, 140 S. Ct. 1936 (2020),
reinforces that trust-specific remedies do not qualify as remedies “typically available in
equity.” When noting that an “accounting”—“an equitable remedy requiring disgorgement
of ill-gotten profits”—qualified as a remedy “typically available in equity,” the Court
showed that the remedy was not merely used in “cases involving a breach of trust or of
fiduciary duty” and that courts of equity “authorized profits-based relief in patent-
infringement actions where no trust or special relationship existed.” Id. at 1944.
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It is time that we did too. We have never considered Montanile’s effect on Amara.
Peters conceptually followed McCravy’s lead, relying on both McCravy and Amara. It
also sequentially followed Montanile. Yet it did not explain why we should stick with
McCravy and Amara in Montanile’s wake. In fact, it did not so much as cite Montanile.
See generally Peters, 2 F.4th 199. Where “prior decisions” in our Circuit use “reasoning
inconsistent with Supreme Court authority,” “we are not bound to follow them.” United
States v. Banks, 29 F.4th 168, 178 (4th Cir. 2022). That is true even where some of the
prior panel decisions “were decided after” the Supreme Court case rendered them
untenable. Id. Absent an indication that Peters considered the viability of Amara’s rule
after Montanile—and there is no such indication—it cannot bind us to a path inconsistent
with the Supreme Court’s dictates.
Accordingly, we return to the same rule that applied at the Supreme Court, and in
this Circuit, before Amara: Plaintiffs that seek “merely personal liability upon the
defendants to pay a sum of money” ask for legal, not equitable, relief under § 502(a)(3).
See LaRue, 450 F.3d at 575 (cleaned up) (quoting Great-West, 534 U.S. at 213). But
plaintiffs that seek to strip away defendant’s unjust gains might have better luck. Their
sought relief qualifies as “equitable,” so long as the plaintiff can trace those unjust gains to
“specifically identified funds that remain in the defendant’s possession or against traceable
items that the defendant purchased with the funds.” Montanile, 577 U.S. at 144–45.
B. Has Rose sought an “equitable” remedy?
With those rules in mind, we agree with the district court that compensatory “make-
whole” monetary relief is unavailable under § 502(a)(3). But the district court did not
25
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consider whether Rose plausibly alleged facts that would support relief that was “typically”
available in equity. Montanile, 577 U.S. at 142. As we have discussed, one such remedy
is based on the defendant’s unjust enrichment. But the question remains whether Rose has
plausibly alleged facts that would entitle her to such relief by alleging (1) that a defendant
was unjustly enriched by interfering with Kyree’s rights 17 and (2) that the fruits of that
unjust enrichment remain in the defendant’s possession or can be traced to other assets.
Rather than determine for ourselves whether Rose properly alleged such a theory,
we remand for the district court to decide in the first instance whether Rose has met this
burden for each defendant. 18
* * *
Rose has not plausibly alleged facts that could entitle her to monetary relief on
behalf of her son’s estate under § 502(a)(1)(B) because that provision only authorizes a
beneficiary to sue to recover the benefits that they were due under the terms of their plan.
Kyree’s health plan did not entitle him to money; only to the surgery, which he never
received. So the district court was correct to dismiss Rose’s § 502(a)(1)(B) claim.
Yet § 502(a)(3) authorizes Rose to seek “equitable relief.” And, while monetary
relief awarded to compensate for a plaintiff’s loss does not qualify as “equitable” under the
Supreme Court’s test, relief awarded under an unjust-enrichment theory may indeed
17
Such as by breaching their fiduciary duties to him. See Restatement (First) of
Restitution § 1 cmt. e; Palmer, supra, §2.12.
Other questions may also remain. For example, if UMR, Quantum, or MCMC
18
were somehow unjustly enriched by the refusal to pay, then the district court may need to
decide whether UMR, Quantum, or MCMC were “fiduciaries” under ERISA.
26
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qualify. We thus remand for the district court to determine whether Rose has—or can—
plausibly allege such a claim.
Accordingly, the district court’s decision is
AFFIRMED IN PART,
VACATED IN PART,
AND REMANDED.
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TOBY HEYTENS, Circuit Judge, concurring in part and dissenting in part:
I agree the district court correctly dismissed Rose’s 502(a)(1)(B) claim and that the
502(a)(3) claim should be remanded for further proceedings. In my view, however, Rose
need not show the fruits of a defendant’s wrongdoing are traceable to particular funds
remaining in that defendant’s possession to state a claim under ERISA. Instead, I would
hold Rose need only plead and prove the defendant was a fiduciary and that any money
sought represents “make-whole relief ” for a “violation of a duty imposed upon that
fiduciary.” CIGNA Corp. v. Amara, 563 U.S. 421, 442 (2011).
The relevant statutory provision authorizes Rose to sue for an injunction or “other
appropriate equitable relief.” 29 U.S.C. § 1132(a)(3). This provision empowers district
courts to provide “those categories of relief that were typically available in equity.”
Mertens v. Hewitt Assocs., 508 U.S. 248, 256 (1993). And in Amara, the Supreme Court
told us that “the category of traditionally equitable relief ” includes “monetary
‘compensation’ for a loss resulting from a trustee’s breach of duty”—“sometimes called a
‘surcharge’ ”—and that remedy is available against “the plan administrator” of an ERISA
plan. 563 U.S. at 441–42. Two previous published opinions of this Court have understood
Amara in precisely this way. See Peters v. Aetna, Inc., 2 F.4th 199, 216 (4th Cir. 2021)
(“The Supreme Court has recognized surcharge as a form of ‘appropriate equitable relief ’
available under § 502(a)(3) because it was ‘typically available in equity[.]’ ” (quoting
Amara, 563 U.S. at 439, 441–42)); McCravy v. Metropolitan Life Ins. Co., 690 F.3d 176,
181 (4th Cir. 2012) (describing Amara as “stand[ing] for the proposition that remedies
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traditionally available in courts of equity, expressly including . . . surcharge, are indeed
available to plaintiffs suing fiduciaries under Section [502](a)(3)”).
The Court’s opinion offers several potential justifications for departing from what
Amara said and what Peters and McCravy held. I am unconvinced.
For example, the opinion spends considerable time suggesting Amara
misunderstood the relevant history and that its approach departed from the Supreme
Court’s earlier decisions in Mertens v. Hewitt Associates, 508 U.S. 248 (1993), and Great-
West Life & Annuity Insurance Co. v. Knudson, 534 U.S. 204 (2002). But we are bound by
the Supreme Court’s formulation of the relevant principles even when we think the Court
may have gotten those principles—or their application—wrong. This seems all-the-more-
true here, where the relevant portion of the Supreme Court’s opinion in Amara extensively
discussed both Mertens and Great-West. See Amara, 563 U.S. at 438–39.
True, Amara’s discussion of Section 502(a)(3) was “not essential to resolving that
case” and was thus arguably dicta. Montanile v. Board Trs. Nat’l Elevator Indus. Health
Benefit Plan, 577 U.S. 137, 148 n.3 (2016). But a previous panel of this Court has already
considered that fact and decided it should follow Amara’s lead here anyway. See McCravy,
690 F.3d at 181 n.2. And, under our well-settled procedures, “one panel cannot overrule
another.” McMellon v. United States, 387 F.3d 329, 333 (4th Cir. 2004) (en banc).
The issue that gives me the most pause is the Supreme Court’s treatment of Amara
in its 2016 decision in Montanile. I agree, of course, that previous “panel precedent”—
here, this Court’s decisions in Peters and McCravy—“is not binding if it subsequently
proves untenable considering Supreme Court decisions.” Carrera v. E.M.D. Sales Inc., 75
29
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F.4th 345, 352 (4th Cir. 2023) (quotation marks omitted). “But that is a high standard, and
I am not confident it is satisfied here.” United States v. Brown, 67 F.4th 200, 217 (4th Cir.
2023) (Heytens, J., concurring in the judgment).
To show the Supreme Court has rejected Amara’s blessing of surcharge as a proper
remedy under Section 502(a)(3)—and thus has abrogated Peters and McCravy—the
Court’s opinion relies on a footnote in Montanile. In that footnote, the Supreme Court noted
the relevant discussion in Amara was “not essential to resolving that case” and stated that—
notwithstanding Amara—the Court’s “interpretation of ‘equitable relief’ in Mertens,
Great-West, and Sereboff v. Mid Atlantic Medical Services, Inc., 547 U.S. 356 (2006),
remains unchanged.” 577 U.S. at 148 n.3; see id. (also referencing US Airways, Inc. v.
McCutchen, 569 U.S. 88 (2013)).
To me, that is not enough to permit a panel of this Court to depart from our previous
holdings in Peters and McCravy. Montanile did not say Amara had been inconsistent with
the Court’s previous decisions. Nor did it say the Court was now adopting an approach
contrary to Amara. Instead, Montanile rejected a litigant’s broad reading of Amara that
would have “all but overrul[ed]” Mertens and Great-West, emphasizing that Amara
“reaffirmed” the traditional equitable limitations covering “a lien or a constructive trust”
that drove the Court’s decision in Montanile. See Montanile, 577 U.S. at 148 n.3.
Viewed in this light, Amara’s explanation of why its discussion of surcharge was
consistent with Mertens covers Great-West, Sereboff, McCutchen, and Montanile as well.
As Amara noted, surcharge was not available against just anyone. Rather, surcharge only
“extended to a breach of trust committed by a fiduciary encompassing any violation of a
30
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duty imposed upon that fiduciary,” which is why “the fact that the defendant in [Amara],
unlike the defendant in Mertens, [was] analogous to a trustee ma[de] a critical difference.”
563 U.S. at 442 (emphasis added). Like the defendants in Great-West, Sereboff, and
McCutchen, however, the defendant in Montanile was not a fiduciary. Instead, those cases
all involved situations where a fiduciary (an ERISA plan administrator) was suing a non-
fiduciary (the plan’s own beneficiaries) to claw back benefits that had been paid out.
See Montanile, 577 U.S. at 139; Sereboff, 547 U.S. at 359; Great-West, 534 U.S. at 208;
McCutchen, 569 U.S. at 91. *
The fact that Amara can be reconciled with Montanile in this way means Peters and
McCravy can too. I have no doubt one could have a robust debate about whether a fiduciary
versus non-fiduciary line makes sense as a matter of history or first principles or if it was,
in fact, consistent with Mertens and Great-West. But that distinction comes directly from
the Supreme Court’s decision in Amara. It is reflected in this Court’s decisions in Peters
and McCravy—both of which were premised on the defendants’ status as fiduciaries.
See Peters, 2 F.4th at 227; McCravy, 690 F.3d at 181. And it is not “impossible to
*
Montanile also quoted a leading treatise’s statement that “[e]quitable remedies are,
as a general rule, directed against some specific thing . . . rather than a right to recover a
sum of money generally.” 577 U.S. at 145 (quoting 4 S. Symons, Pomeroy’s Equity
Jurisprudence § 1234, p. 694 (5th ed. 1941)). Saying something is generally true is different
from saying it always is. Montanile also states that “all types of equitable liens must be
enforced against a specifically identified fund in the defendant’s possession.” Id. at 146.
But Rose does not seek an equitable lien—which, Montanile notes, “is simply a right of
special nature over” a “specifically identified” thing. Id. at 145.
31
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reconcile” with the Supreme Court’s terse footnote in Montanile. See Carrera, 75 F.4th. at
352. To me, that should be the end of the matter.
* * *
This Court “do[es] not lightly presume that the law of the circuit has been overturned
. . . or rendered no longer tenable.” Carrera, 75 F.4th at 352 (quotation marks omitted).
Because I do not believe that high standard is satisfied here, I believe this panel remains
bound by Peters and McCravy, and would conclude that Rose’s ability to obtain relief does
not turn on an ability to show traceability.
32