§ 4.3.7.6 REMEDIES

• Jurisdiction: Arizona

§ 4.3.7.6 Remedies. The scope of remedies available under ERISA has been subject of much debate and is the current subject of various efforts to amend the statute. Generally, ERISA does not provide for recovery of punitive damages.¹⁸⁸ Similarly, emotional distress damages have been found to be unavailable.¹⁸⁹ Courts will, in some instances, consider claims for prejudgment interest in addition to the lost benefits.¹⁹⁰

One of the more troubling aspects of the remedies available under ERISA is the courts' reluctance to provide any monetary relief in the form of damages for a breach of fiduciary duty.¹⁹¹ On this point, the circuits were once split.¹⁹² Most appellate courts now agree that there is no substantive remedy for a procedural violation of the ERISA reporting and disclosure requirements.¹⁹³

The nature, extent, and limitations on ERISA remedies have become clearer as a result of Supreme Court decisions. The available remedies in a 29 U.S.C. § 1132(a)(1)(B) claim for benefits have not changed. The clarification comes with respect to the remedies available under the breach of fiduciary duty theories under 29 U.S.C. § 1132(a)(2) and (3). The two basic limitations on the 29 U.S.C. § 1132(a)(2) remedy are that money damages are unavailable¹⁹⁴ and that the remedy flows in favor of the plan rather than an individual.¹⁹⁵ Although money damages remain unavailable in the other fiduciary duty claim that can be brought under 29 U.S.C. § 1132(a)(3),¹⁹⁶ the Supreme Court found that this provision is a "catchall" that can be used to provide individuals with equitable relief for fiduciary breach.¹⁹⁷

Attorneys' fees are available under ERISA.¹⁹⁸ The Court has ruled that a participant can be entitled to fees even if he or she is not a fully prevailing party in the litigation.¹⁹⁹ If the party achieves some degree of success, that may be sufficient and prevailing sufficiently that the court remands to the plan administrator qualifies or is at least eligible for a fee award. Fees are generally not allowed to the extent incurred during the intra-plan claims processing phase of the case before the action is filed.²⁰⁰ Most courts continue to apply a five-factor test to determine whether the prevailing plaintiff is entitled to attorneys' fees.²⁰¹ Those factors are: (1) the degree of bad faith or culpability of the losing party; (2) ability of that party to satisfy an award of fees; (3) whether the award would deter others from acting under similar circumstances; (4) the...