Employee Rights and Employment Policy Journal

ERISA’s Equitable Illusion: The Unjust Justice of Section 502(a)(3)

Abstract

By
Scott M. Aronson

Today the ability of ERISA plan fiduciaries to enforce subrogation clauses in ERISA plans is uncertain at best. Any attempt to enforce the subrogation clauses must be done under ERISA’s civil enforcement provision which is the exclusive remedy for the enforcement of ERISA plan provisions. Further, the civil enforcement provision limits the plan fiduciaries’ remedy to appropriate equitable relief. Following a number of Supreme Court decisions narrowing the definition of appropriate equitable relief two major questions have arisen. First, does the enforcement of subrogation clauses fit within the Supreme Court’s definition of appropriate equitable relief? Second, if the enforcement of subrogation clauses is appropriate equitable relief, should well established, common law, equitable doctrines, such as the make-whole doctrine and common-fund doctrine, be applied? This article explores the uncertainty surrounding whether plan fiduciaries have subrogation rights, contractually or otherwise, and supports the adoption of the make whole doctrine to mitigate the harshness of subrogation.