<nobr>May 16, 2006</nobr>

Supreme Court Affirms Fourth Circuit in Sereboff

The Supreme Court Monday held that plan fiduciaries under ERISA may bring a civil action under Section 502(a)(3) of the act to obtain “appropriate equitable relief” to recover money that plan participants received from another source. The Court upheld a Fourth Circuit decision that allowed Mid Atlantic Medical Services (MAMSI) to recover medical expenses paid after the Sereboffs won their personal injury lawsuit because the funds were identifiable, belonged in good conscience to MAMSI and were within the Sereboffs' possession and control.

The court distinguished the facts of the case from Great-West because the Sereboffs had actual possession of the funds that MAMSI sought. In Great-West, the court established that remedies under 502(a)(3) were only available if they were equitable in nature. The court analyzed the time of “the divided bench” when courts were split between courts of equity and courts of law. Both Great-West and MAMI sought damages in restitution—an equitable remedy—but the Court in Great-West found that because the funds were in a special needs trust and not in control of the beneficiary, the remedy was not equitable in nature.

Chief Justice John Roberts wrote the court’s unanimous opinion.

Text Files:

Supreme Court Sereboff Decision


Websites:

Fourth Circuit Sereboff Decision

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