A few months ago, I reported on the District Court’s decision in Amara v. CIGNA, an important class-action case on ERISA retirement benefits and on alleged misrepresentations made by the Company about retirement benefits. Over the last few months, then, the court was asked to consider the issue of what is appropriate relief from the decision.
Late Friday, Judge Mark Kravitz issued his decision on what the appropriate remedy should be from his decision. But then, sua sponte (a nice Latin phrase meaning, in essence, "on my own"), the Court decided to stay its own judgment on the appropriate relief. What does that mean? In essence, the court threw up its hands and conceded that the issues of damages and liability were so "unclear" that there was no good way to predict that the decision would even be upheld on appeal:
The Court also recognizes that the benefits awarded by this opinion are substantial, and that the law on which they are based is anything but settled. In light of the complexity of the issues and the weighty interests at stake, as well as the possibility that some or all of this opinion and the Liability Decision may be reversed on appeal, the Court believes that a stay is appropriate…..
The lack of clear guidance in the law and the unusual factual circumstances present in this case have convinced the Court that the outcome of any appeal is far from certain, and the Court believes a stay is therefore both appropriate and necessary.
So what relief did the court propose? Well, the language the court uses (see you if you can make sense of it) shows that it is reluctant to impose draconian consequences on CIGNA and instead proposes a bit of a compromise:
In light of CIGNA’s statements in those publications that all early retirement benefits would be protected and CIGNA’s failure to warn of wear away, the Court orders and enjoins the CIGNA Plan to reform its records to reflect that all class members must now receive "A+B" benefits; that is, all class members must receive their accrued benefits under Part A, in the form in which those benefits were available under Part A, and in addition their accrued benefits under Part B [the new formula], in whatever form those benefits are available under Part B.
While I have not been following the case closely, the Court rejected various claims made by the Plaintiffs and declined to impose even harsher penalties on CIGNA. But the Court declined to let CIGNA off completely either, indicating that some sort of financial burden must be imposed on CIGNA for misrepresentations the court found in its earlier decision
Under A+B, an employee would receive all of her Part A benefits in the form those benefits were previously offered under Part A, plus all the benefits she accrued under Part B, in whatever form those benefits are offered. Because there is no attempt to transition Part A benefits into the Part B accrual formula, there is no need for an opening account balance and thus no question of whether early retirement benefits are a part of that. …
The Court recognizes that a return to Part A would result in a larger recovery for Plaintiffs.
That fact alone, however, is insufficient to render A+B inadequate, especially in light of [expert] testimony regarding the substantial effect on class members’ benefits as a result of wear away and the lack of any evidence in the trial record to support Plaintiffs’ current complaints. For all of these reasons, then, the Court rejects both parties’ objections to the A+B remedy, which the Court believes is a meaningful, substantial, and appropriate remedy.
The decision is a technical one and frankly, incredibly complex. For employers looking for guidance on this issue, they should tread very carefully. As the Court notes time and again, the issues involved are far from settled and that an employer who takes action in the area, will do so with substantial risks for the foreseeable future.
For members of the Amara class, the decision means many more months of waiting for a resolution of the issue. Because of the complexity, I would be surprised to get a decision from the Second Circuit before the end of the year. Class members can keep up with the lawsuit at a website created by the Plaintiffs’ attorneys.