In this Spotlight on Benefits post, we discuss the nature of equitable relief under ERISA and another federal circuit court decision rejecting surcharge as an available equitable remedy.
As background, ERISA contains an exclusive civil enforcement provision that sets forth the only claims and forms of relief available to ERISA plaintiffs. One of those claims is under ERISA § 502(a)(3), which authorizes, among other things, a claim for appropriate “equitable relief” to remedy a violation of ERISA or an ERISA plan. ERISA does not define “equitable relief,” and that phrase can have different meanings depending on the context.
The Supreme Court has provided some guidance on what ERISA means by “equitable” relief, but that guidance has been limited and inconsistent. The Supreme Court has explained on multiple occasions that the equitable relief available under ERISA § 502(a)(3) refers to remedies that were “typically available in equity,” meaning relief that was available in specific situations back in the day when courts were divided into courts of law and courts of equity. See, e.g., Montanile v. Bd. of Trs. of Nat’l Elevator Indus. Health Benefit Plan, 577 U.S. 136, 142 (2016)(emphasis original). But the Supreme Court in Cigna v. Amara, 563 U.S. 421, 422 (2011), commented, in dicta, that ERISA § 502(a)(3) might allow some plaintiffs to pursue “make-whole” monetary relief because “such relief was analogous to ‘surcharge,’ an exclusively equitable remedy under the law of trusts.”
The Sixth Circuit recently addressed whether “equitable relief” under ERISA includes the remedy of “surcharge.” Following a 2023 decision from the Fourth Circuit, the Sixth Circuit concluded that it does not. The courts reached this conclusion by engaging in an analysis that more litigants and courts should be conducting in ERISA cases.
Aldridge v. Regions Bank
In Aldridge v. Regions Bank, No. 24-5603 (6th Cir. 2025), former restaurant managers sought to recover benefits they lost when the company filed for bankruptcy. The managers were participants in “top hat” plans, which were exempt from ERISA fiduciary duty requirements. Because the managers could not bring a claim for breach of fiduciary duty, they brought state-law claims against the plans’ third-party administrator and, alternatively, an ERISA § 502(a)(3) claim to recover an “equitable surcharge.”
The managers described the equitable surcharge they were seeking as the benefits they should have been paid under the plans. The question for the Sixth Circuit was whether a remedy in the form of benefits due to participants was an available form of “equitable” relief under ERISA § 502(a)(3). In deciding it was not, the court relied extensively on the Fourth Circuit’s decision in Rose v. PSA Airlines, Inc., 80 F. 4th 488 (4th Cir. 2023). Because of the importance of the Fourth Circuit’s analysis and decision to the Sixth Circuit’s decision in Aldridge, the Rose case merits some discussion.
The Rose case concerned a similar issue, namely whether monetary benefits due to a plan participant could be awarded in the form of an equitable surcharge under ERISA § 502(a)(3). To resolve the question, the Fourth Circuit considered what it means for a remedy to have been “typically available in equity.” For those interested in history, the United States’ formal separation between federal courts of law and equity ended with the Federal Rules of Civil Procedures, which took effect on September 16, 1938. As such, the Fourth Circuit had to assess practices that ended more than 85 years ago. Back then, when federal courts still were divided, the types of remedies that were “legal” in nature were fairly well-defined. But, as the Rose court explained, remedies in courts of equity were “complicated and nuanced” because there were two types of jurisdiction in courts of equity ― concurrent jurisdiction and exclusive jurisdiction. When courts of equity exercised concurrent jurisdiction, they shared jurisdiction with the court of law and could not award remedies that the court of law would be able to award. When courts of equity exercised exclusive jurisdiction, only the court of equity had the authority to decide the case and had authority to award both equitable and legal remedies, including “equitable compensation,” also known as “surcharge.”
The Fourth Circuit determined that remedies that were “typically available in equity,” and thus available under ERISA § 502(a)(3), are limited to those remedies a court of equity could award when it had concurrent jurisdiction with the court of law ― in other words, only the equitable remedies a court of equity could award. The Fourth Circuit reached this conclusion notwithstanding the Supreme Court’s dicta in Amara that surcharge might be available under ERISA § 502(a)(3), which it noted was inconsistent with prior Supreme Court precedent.
This does not mean monetary relief is necessarily unavailable to a plaintiff under ERISA § 502(a)(3). It means, however, that a plaintiff may obtain only equitable monetary relief. And for monetary relief to be equitable, it must seek to return to the plaintiff a defendant’s “unjust gains” that can be specifically traced in the defendant’s possession. Because the Rose plaintiff did not seek that type of relief, and instead sought monetary benefits, the Rose court rejected that requested relief as not the equitable form of a “surcharge.”
The Sixth Circuit agreed with the Fourth Circuit’s approach. It concluded that the managers’ claim failed because it was not one for equitable relief because the managers did not seek to return to the plaintiff a specific asset in the defendants’ possession that rightfully belongs to the plaintiff. There was no specific fund in TPA’s possession that the managers sought. They were seeking monetary compensation for their losses, which is the typical form of legal relief.
Takeaways
Contrary to common misconception, the difference between a “legal” remedy and an “equitable” remedy is not as simple as “monetary” versus “nonmonetary” relief. There are various forms of equitable remedies that take the form of money; disgorgement is a typical example. Equitable disgorgement can require a defendant to give up possession of money that the defendant wrongfully obtained. It is clear, however, that ERISA § 502(a)(3) allows only “equitable” forms of relief, whether monetary or otherwise. It is extremely common to see claims under ERISA § 502(a)(3) for various types of equitable relief that are, in actuality, requests for legal relief. That is what occurred in Rose and Aldridge.
Analyzing whether that relief was available under ERISA § 502(a)(3) was no small feat. It required a deep dive into antiquated legal concepts, as many ERISA issues do. Kudos to the appellate courts for taking on the task.
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