### I N THE UNI TED STATES COURT OF APPEALS FOR THE FI F TH CI RCUI T

No. 12-60461

AARON GEARLDS, JR., Plaintiff-Appellant
v. ENTERGY SERVICES, INCORPORATED; ENTERGY MISSISSIPPI, INCORPORATED, Defendants-Appellees

Appeal from the United States District Court f or the Southern District of Mississippi

Before REAVLEY, PRADO, and ELROD, Circuit Judges. REAVLEY, Circuit Judge: Plaintiff Aaron Gearlds, Jr. appeals from the district court’s dismissal of his s u it alleging claims of equitable estoppel and b r e a c h of fiduciary duties pursuant to the Employee R etirement Income Security Act of 1974 (“ERI S A” ). The district court dismissed the suit unde r Federal Rule of Civil Procedure 12(b)(6). Beca u s e w e c o n clude that Gearlds stated a claim for relief that is cognizable under ERISA, we R EVERSE the district c ourt ’ s j u d g m e nt f o r E ntergy Services, Inc. U n i t e d S t a te s C o u rt o f A p p e al s F i f t h C i rc u i t 

### F I L E D February19, 2013 Ly l e W . Cay ce Clerk Case: 12-60461 Document: 00512147849 Page: 1 Date Filed: 02/19/2013No. 12-60461 I. According to the complaint, the facts of which we accept as true, Gearlds

was employed b y Defendant Entergy Miss issippi and participated as a beneficiary of an ERISA plan administered by Defendant Entergy Services, Inc. (henceforth only “Entergy”). Gearlds worked for E ntergy Mississippi f rom 1976 until 1994 when he began collecting long t erm disability benefits. T hose benefits ended in 2002 because he was deemed no l onger disabled. Although Gearlds’s employment w as not t erminated, Entergy M ississippi did not pay Gearlds from that point on. In 2005, Gearlds took early retirement at the age o f 55, receiving

a reduced pension and full medical, d ental, and vision benefits. Gearlds alleged in his complaint that he agreed t o retire early because the defendants told him orally and in writing that h e was c overed by Entergy’s Medical Benefits Plus P l a n and would continue to receive medical benefits. At s ome point, Gearlds waived medical b e n e fits available under his wife’s retirement plan when she retired from her employment because of t h e assurances he had received from Entergy. In 2010, however, Entergy notified G e arlds that it w as discontinuing his medical benefits. Apparently, when Entergy determined the benefits to which Gearlds was entitled upon retirement in 2005, i t believed th at Gearlds was still receiving long term disability benefits, which had a ctually e nded three years earlier, a nd it therefore in c luded the time f rom 2002 to 2005 when computing Gearlds’s service time under the retirement plan. This error caused Entergy to determine that Gearlds w as eligible for medical coverage a nd that h is monthly reti r e m e nt benefit would be $800.65. Entergy informed Gearlds that he was actually not e ntitled to medical benefits a n d t h a t h is m onthly benefit should have been $305.68. Entergy did not seek r e imbursement of any over payments, and it further stated that i t w ould a llow Gearlds to continue to r e ceive the same

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$800.65 monthly benefit. It indicated, however, that Gearlds’s medical c overage would cease. Gearlds filed the instant suit, al l e ging that Entergy negligently induced him to take early retirement insofar as it promised him health care benefits. He asserted claims for (1) breach of fiduciary duty pursuant to ERISA § 502(a)(3),

now codified as 29 U.S.C. § 1132(a)(3), and (2) equitable estoppel. Gearlds sought a s damages past a n d f uture medical expenses, interest, attorneys fees, costs, and any o t h e r d a mages, equitable or otherwise, to which he may be entitled. Upon motion by Entergy, the district court dismissed the c o m p laint for failure t o s tate a cla i m . T h e d i strict court reasoned that Gearlds sought only compensatory money damages, which was n ot an a v a i l ab le equitable remedy under § 502(a)(3). The court f u r t h e r held that G earlds’s claim for equitable estoppel failed because Gearlds had not alleg e d t h e kind of extraordinary circumstances necessary under our precedent. Gearlds now appeals. II. The district court’s dismissal for failure to s tate a cl a i m i s r e viewed d e

n o v o . Turner v. Pleasant , 663 F.3d 770, 775 (5th Cir. 2011). “To s urvi v e a motion to dismiss, a complaint must contain sufficient factual matter, accepted

as true, to state a claim to relief that i s p lausible on its face.” Ashcroft v . Iqbal , 556 U.S. 662, 667, 1 29 S. Ct. 1937, 1949 ( 2 0 0 9 ) (internal quotation m arks and citation o m i t t e d)

. “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defe n d a n t i s liable for the misconduct alleged.” Id. “[T]he c omplaint must provide mo r e than conclusions, but it need n ot contain detailed factual allegatio n s . ” Turner , 6 63 F.3d a t 775 (internal quotation marks and citation omitted).

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A s r elevant to the instant case, § 5 02(a)(3) permits a plan benefici a r y t o bring a civil action to obtain “other appropriate equitab le relief” for ERISA violations. 29 U.S.C. § 1132(a)(3 )

. U ntil recently, it was accepted in this and other circuits that “other a ppropriate equitable relief” was limited to the kinds of remedies typically available at equity, such a s i njunctions, mandamus, or restitution, and that so-called “make-whole” m onetary damages were not within the scope of the statute. See Amschwand v. Spherion Corp. , 5 05 F.3d 342, 343 (5th Cir. 2007); see also M cCravy v. Metro. L ife Ins. Co. , 690 F.3d 176, 180 (4th Cir. 2 012). I n Amschwand , for example, a plan beneficiary sought make-whole damages for breach of fiduciary duty in the form of lost policy proceeds. See 505 F.3d at 348. We held that such a remedy was “not e quitable in derivation” and

was instea d “ a k i n to the legal remedies of extracontractual or compensatory damages.” I

d

. Because the remedy sought “was not typically available in prefusion c ourts o f equity,” we denied relief. I d. Under this precedent, Gearlds’s claim for m onetary damages is inappropriate unde r § 502(a)(3). Because of recent Supreme Court precedent, however, w e must r eevaluate that conclusion. The Supreme C o u rt recently stated an expansion of the kind of relief available under § 502(a)(3) when the plaintiff is suing a plan fiduciary and the relief sought makes the plaint i f f whole for losses caused by the defendant’s breach of a fiduciary duty. See CIGNA Corp. v. Amara , 131 S. C t. 1866, 1 878–80 (2011). I n Amara , a class of plaintiff s s u e d an employer a nd a pension plan becau s e t h e e mployer m isled the plaintiffs about the c onversion o f a defined benefit retirement p lan into a cash balance p l a n a n d p rovided less generous benefits. Id. at 1870. The district court found that the defendant had intentionally misled the employees, and it reformed the terms of the new plan. Id. at 1874–75. The district court, inter alia , “require[d] the plan administrator to p ay t o already ret i r e d b e neficiaries money owed them under the plan as reformed.” I

d. at 1880.

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As legal author i ty for the r elief, the district c ourt relied on ERISA § 502(a)(1)(B), which allows plan participants or beneficiaries to bring suit for
recovery o f benefits under ERISA p l a n s . See id. at 1875–76; 29 U.S.C. § 1132(a)(1)(B). The Supreme Court held that § 502(a)(1)(B) did not authorize t h e relief because that section did not permit the district c ourt to chan g e o r reform the terms of the plan as th e y p r e viously existed. Amara , 131 S. Ct. at 1876–77. The Court then went on, however, to o rder on remand a remedy might be available under § 5 02(a)(3)’s provision for “other appropriate equitable relief.” The Court concluded that th e district court’s allowance of monetary damages could fall within the scope of the statute. I d. at 1878–80. Although the district court’s r e m e d y was in the form o f money, the Supreme Court reasoned that i t w as not beyond th e scope of traditional equitable relief because “[e]quity courts possessed the power to provide relief in the f orm of monetary ‘compensation’ for a loss resulting from a trustee’s breach of duty, or to prevent the trustee’s unjust e nrichment.” Id. at 1880. This form of r elief was commonly known as “ surcharge.” Id. The Cour t b e l i e v e d it “critical” that the Amara defendant’s p osition as a fiduciary was a nalogous to a trus t e e, and it concluded that “an award of make-whole relief” i n the form of surcharge was w i thin the scope of “appropriate equitable relief” for purposes of § 502(a)(3). Id. I n the instant c ase, G earlds argues that Amara is controlli n g
. H e contends that Entergy b reached its fiduciary duty by r e presenting that he was eligible for plan benefits for the r e mainder of h i s l i fe by o pting f or early retirement, and that he detri m e ntally relied on the misrepresentations. Gearlds argues that he continued paying p remiums for his benefits and lost the opportunity to obtain alternate benefits through his wife’s r etirement p lan. He seeks to recover the amount of insurance benefits that he h as lost as a r esult of the defendants’ alleged breach and misrepresentations.

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In McCravy , the Fourth Circuit addressed a s omewhat similar case. There, the plaintiff p a id l ife insurance premiums for several years for her dependent child only to learn upon the chi l d ’ s d e a th that the c hild had been ineligible for dependent coverage. McCravy , 6 90 F.3d at 178. The plan denied the plaintiff’s c laim for benefits and sought to reimburse the p laintiff only for the premiums that she had paid. Id. In h e r s u i t f o r breach of f

iduciary duty, the
p l a intiff alleged that the defendant h ad represented to her that her chil d w a s covered by d e pendent life insurance, a nd that as a result she did n ot obtain different insurance. Id. T he p laintiff sought the amount of life insurance proceeds lost because of the defendant’s alleged breach. Id. at 181. The Fourth Circuit concluded b ased on Amara that b ecause a monetary make-whole remedy could be available under § 5 02(a)(3), the plaintiff was not limited to recovering the premiu m s s he had paid. Id. The c o urt remanded for th e district court to determine in the first i nstance whether the breach o f fiduciary duty claim would succeed on the merits and whether surcharge w as an appropriate remedy under the circumstances of the case. Id. at 181–82. Here, w e follow a similar path. The district court cite d Amara but it did not c onsider whether surcharge was an appropriate remedy. The district court instead dismissed the suit because Gearlds sought o nly money damages, which is ordinarily a legal remedy. After Ama r a , however, that is not the end of the inquiry into equity. Gearlds’s complaint is viable in light of Amara

. Entergy characterizes Amara ’s discussion o f § 502(a)(3) as dictum. Even assuming i t is dictum, however, we give serious consideration t o this r ecent and detailed discussion of the law by a m ajority of the S upreme Court. See McCravy , 690 F.3d at 181 n.2 ( stating about Amara that the court “cannot simply override

a legal pronouncement endorsed just last y e a r b y a majority of the S upreme Court”); Reich v. Continental Cas. Co. , 33 F .3d 754, 757 (7th Cir. 1 994) (holding that the Supreme Court’s “recent dictum

. . . pr o v i d e s t he best, though not

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infallible, guide to what the law is”); see also United States v . Becton , 632 F.2d 1294, 1296 n.3 (5th Cir. 1980) (noting that, as compared w ith other dicta, “[d]icta of the Supreme Court are, of course, a nother matter”). Based on the depth of the Court’s treatment of the issue, we a r e p e r s u a d ed to join the Fourth Circuit in concluding that Amara ’ s pronouncements about surch ar ge a s a p o t e nti al r e m edy under § 502(a)(3 ) s h o u ld be followed. We also conclude, therefore, that our circuit’s contra r y prior decisions, such as Amschwand , have been implicitly overruled. Cf. United States v. Short , 181 F.3d 620, 624 ( 5th Cir. 1999) (“[T]his
p a n e l i s bound b y the precedent of previous panels absent an intervening Supreme Court case explicitly o r implicitly overruling that p rior precedent . . . .”). To be sure, Gearlds did not expressly plead or argue “surcharge,” but he did a rgue that h e should be made whole in the f orm of c o m p e n s ation for lost benefits, and h is complaint specifically asked for “[a] ny and a ll other damages and/or relief, equitable o r o therwise, t o which [he] may be entitled under federal law.” Courts must focus on the substance of the relief sought a nd the allegations pleaded, not on the label used. See Edwards v. City of Houston , 78 F.3d 983, 995 (5th C ir. 1996) ( en banc) (“[W]e have oft stated that ‘the relief s ought, that to be granted, or with i n t he power of the Court to grant, should be determined by substance, not a label.’” (citati o n o m i t t e d)). We conclude that Gearlds has at lea s t s t a ted a plausible claim for relief, and therefore further p roceedings are required. We leave to the district court the d etermination whether Gearlds’s breach of fiduciary duty claim may p r evail o n t h e m erits and whether the

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circumstances o f t h e c a s e warrant the r elief of surcharge. 1 See McCravy , 690 F.3d at 181–82. Gearlds al s o sought a r emedy based on equitable e stoppel. The district court dism i s s ed that claim b ecause “extraordinary circumstances” were not constituted by the allegations. See High v. E-S y s t e m s , I

nc., 4 59 F.3d 573 (5th Cir. 2006). B ecause relief is available under t h e s u rcharge doctrine under Amara , w e do not address the equitable estoppel claim. The district court is free to consider that claim on remand. Finally, Gearlds challenges the district court’s dismissal o f Defendant Entergy Mississippi. The district court dismissed Entergy Mississippi because Gearlds did not allege that Entergy Mississippi was a proper defe n d a nt. Gearlds argues that Entergy Mississi p p i w as a proper and necessary defendant only because he was employed by Entergy Mississippi and his plan benefits accrued t h rough his employment. Gearlds did not a llege, however, that Ent e r gy Mississippi sponsored or a dministered the p l a n , or made a ny d ecisions with respect to his benefits; therefore, the district court did not err. See Musmeci v. Schwegmann Giant Super M arkets, Inc. , 332 F.3d 339, 349–50 (5th Cir. 2003) (holding that employer was a proper defendant, in addition to the pension plan,

1 E ntergy als o a r gues that G earld s ’s breach of f id uciary d uty claim f ails becaus e G e arld s d id not p laus ibly allege that it acted in a dis cretionary, rather than a m inis ter i a l , m anner. See Rei ch v . La nca ster , 55 F. 3d 1034, 1049 ( 5th C ir. 1995)

. The d is trict court d id not ad d res s t h i s is s ue becaus e it d eterm ined that the rem ed y Gearld s s ought was not available und er § 502( a) ( 3) , w hich w e have conclud ed was incorrect. We need not d ecid e at this p oint
w hether E ntergy’s cond uct w as dis cretionary or minis terial, but G earld s ’s allegations of af f irm ative mis rep res entations at leas t p laus ibly alleged a breach of f id uciary d uty. See In re U ni sys Corp

. Reti ree M

ed. Benef

i t “ERISA ” Li ti

g. , 57 F. 3d 1255, 1264 ( 3d Cir. 1995) ( “[W] hen a p lan ad m i nis trator af f irm atively m is rep res ents the term s of a p lan or f ails to p rovid e inf orm ation w hen it k now s that its f ailure to d o s o might caus e harm , the p lan ad m inis trator has breached its f

id uciary d uty to ind ivid ual p lan particip ants and benef iciaries

. ”)

. It bears em p has is that w e cons id er this cas e at the p lead ing s tage; Entergy’s actual con d u c t w ill require f

urther develop m ent and cons id eration by the d is trict court. 8 Case: 12-60461 Document: 00512147849 Page: 8 Date Filed: 02/19/2013No. 12-60461

because the e m p l o y e r w as both the plan administrator and sponsor, and the employer made the decision to deny benefits). AF F I RM E D I N PART AS TO ENTERGY MI S S I S S I P P I , R EV E R S E D AN D REMANDED AS TO ENTERGY SERVICES, INC.

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