By: John Murray and Violet Borowski
In Lipker v. AK Steel Corporation, 2012 U.S. App. LEXIS 22390 (6th Cir. October 31, 2012), the plaintiff applied for the surviving spouse benefit under the AK Steel Pension Plan (the “Plan”) when her husband, a retired employee of defendant AK Steel Corporation who was receiving a pension benefit under the Plan, died. Her application was granted, but her monthly surviving spouse benefit was considerably smaller than she had expected. Lipker filed suit to recover plan benefits in the amount she believed she was entitled to. The discrepancy between her expectation and the actual benefit awarded by the Plan hinged on the interpretation of ambiguous plan language regarding the offset of any widow’s benefit under the Social Security Act. On cross-motions for summary judgment, the district court accepted plaintiff’s interpretation and ordered AK Steel to pay the higher benefit the plaintiff sought.
On appeal, the Sixth Circuit reversed and remanded finding AK Steel’s proposed interpretation of the plan language to be truer to its plain meaning when read with reference to the language of the Social Security Act. The Sixth Circuit pointed out that the district court had conspicuously failed to consult the Social Security Act in ascertaining the meaning of the terms. Regarding plaintiff’s argument that the Plan conflicted with the summary plan description (“SPD”) in that the SPD did not contain a clarifying clause upon which AK Steel’s interpretation of the Plan’s offset provision rested, and that the clause was, therefore, unenforceable, the Court found that there was no conflict between the Plan and the SPD. The court explained that silence in an SPD does not create a conflict when the omitted information merely clarifies the more general language of the SPD. In a footnote, the Sixth Circuit pointed out that the Supreme Court’s holding in CIGNA Corp. v. Amara, 131 S. Ct. 1866 (2011), that the language of the plan controls in any conflict between the plan and the SPD, would likely have defeated plaintiff’s argument based on the SPD in any case. Although the court noted that Amara left open the possibility that Section 502(a)(3)’s “appropriate equitable relief” provision might allow for relief in such situations, the court declined to consider such relief in the case before it, noting that plaintiff had not asserted such an equitable theory in her complaint.
Of note, one of the panel judges concurred in part and dissented in part stating that he would have reversed the judgment of the district court and remanded the case for consideration of appropriate equitable relief in light of Amara. While acknowledging that the plaintiff had not asserted a claim for equitable relief, the dissenting panelist noted that the Amara decision had not been released when the case was argued in the district court and that the plaintiff’s claim should be given the opportunity on remand to amend her pleadings to assert a claim for equitable relief in light of an intervening decision by the U.S. Supreme Court. The case is an important reminder of the potential for Amara’s open-ended equitable remedies under ERISA Section 502(a)(3) to affect a wide spectrum of cases.