No. 13-130 

In the Supreme Court of the United States
 

SHARON THURBER, PETITIONER 

v. 

AETNA LIFE INSURANCE CO., ET AL. 

ON PETITION FOR A WRIT OF CERTIORARI
 

TO THE UNITED STATES COURT OF APPEALS 

FOR THE SECOND CIRCUIT 

BRIEF FOR THE UNITED STATES AS AMICUS CURIAE 

DONALD B. VERRILLI, JR. Solicitor General 

Solicitor of Labor 

M. PATRICIA SMITH 

Counsel of Record 

G. W EDWIN S. KNEEDLER ILLIAM SCOTT 

Acting Associate Solicitor Deputy Solicitor General 

ELIZABETH HOPKINS JOSEPH R. PALMORE 

Counsel for Appellate and Assistant to the Solicitor 

Special Litigation General 

M Department of Justice ICHAEL HARTMAN Washington, D.C. 20530-0001 Attorney SupremeCtBriefs@usdoj.gov Department of Labor (202) 514-2217 Washington, D.C. 20210 
 

QUESTIONS PRESENTED 

This case involves two remedial provisions of the 

Employee Retirement Income Security Act of 1974 

(ERISA), 29 U.S.C. 1001 et seq. ERISA Section 

502(a)(3) allows a participant, beneficiary, or fiduciary 

to obtain an injunction or “other appropriate equitable 

relief” to redress statutory violations or to enforce 

ERISA or the terms of the plan. 29 U.S.C. 1132(a)(3). 

ERISA Section 502(a)(1)(B) allows a plan participant 

or beneficiary to sue “to recover benefits due to him 

under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights 

to future benefits under the terms of the plan.” 

29 U.S.C. 1132(a)(1)(B). The questions presented are: 

1. Whether an action by an ERISA fiduciary 

against a plan participant to recover an overpayment 

by the plan seeks “equitable relief” within the meaning of ERISA Section 502(a)(3), 29 U.S.C. 1132(a)(3), 

where the fiduciary has not identified a particular 

fund that is in the participant’s possession and control 

at the time that the fiduciary asserts its claim. 

2. Whether a court reviewing a fiduciary’s administrative denial of a plan participant’s claim for benefits 

under ERISA Section 502(a)(1)(B), 29 U.S.C. 

1132(a)(1)(B), should apply the arbitrary-andcapricious standard of review where the plan vests the 

fiduciary with discretionary authority to construe the 

plan’s terms and determine eligibility for benefits, but 

the participant has not received actual notice of that 

provision. 

(I) 
 

 

 

 

 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 

TABLE OF CONTENTS
 

Page 

Statement ......................................................................................... 1 

Discussion ........................................................................................ 5 

A. The first question presented implicates a conflict 

in the courts of appeals, but this petition is a poor 

vehicle for resolving it ........................................................ 6
 

B. The second question presented does not warrant 

this Court’s review ............................................................ 20
 

Conclusion ...................................................................................... 23
 

TABLE OF AUTHORITIES 

Cases: 

Barnes v. Alexander, 232 U.S. 117 (1914)............................ 18
 

Barnes v. Eastern & W. Lumber Co., 

287 P. 2d 929 (Or. 1955) ....................................................... 14
 

Bilyeu v. Morgan Stanley Long Term Disability 

Plan, 683 F.3d 1083 (9th Cir. 2012), cert. 

denied, 133 S. Ct. 1242 (2013) ........................... 7, 8, 9, 14, 16
 

CIGNA Corp. v. Amara, 131 S. Ct. 1866 (2011)............ 10, 13
 

Curtiss-Wright Corp. v. Schoonejongen, 514 U.S. 73 

(1995) ...................................................................................... 20
 

Cusson v. Liberty Life Assurance Co., 592 F.3d 215 

(1st Cir. 2010) ................................................................ 7, 8, 17
 

Donovan v. Bierwirth, 680 F.2d 263 (2d Cir.),
 

cert. denied, 459 U.S. 1069 (1982)....................................... 13
 

Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101 

(1989) .............................................................................. 3, 6, 20
 

Funk v. CIGNA Grp. Ins., 648 F.3d 182 (3d Cir.
 

2011) ............................................................................... 7, 8, 16
 

Great-West Life & Annuity Ins. Co. v. Knudson, 

534 U.S. 204 (2002) ........................................... 3, 9, 10, 13, 15
 

Gutta v. Standard Select Trust Ins. Plans, 

530 F.3d 614 (7th Cir. 2008) ........................................ 7, 8, 16
 

(III) 
 

 

 

 

 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 

IV
 

Cases—Continued: Page 

Harris Trust & Sav. Bank v. Salomon Smith 

Barney Inc., 530 U.S. 238 (2000) .......................................13
 

Herzberger v. Standard Ins. Co., 205 F.3d 327
 

(7th Cir. 2000).................................................................. 21, 22
 

Longaberger Co. v. Kolt, 586 F.3d 459
 

(6th Cir. 2009)................................................................ 7, 8, 16
 

Mertens v. Hewitt Assocs., 508 U.S. 248 (1993) ...... 11, 13, 19
 

Metropolitan Life Ins. Co. v. Glenn, 554 U.S. 105
 

(2008) ......................................................................................20
 

Raybourne v. Cigna Life Ins. Co., 576 F.3d 444 

(7th Cir. 2009)........................................................................21
 

Sereboff v. Mid Atl. Med. Servs., Inc., 547 U.S. 356 

(2006) ............................................................................. passim 

Treasurer, Trs. of Drury Indus., Inc. Health Care 

Plan & Trust v. Goding, 692 F.3d 888 (8th Cir. 

2012), cert. denied, 133 S. Ct. 1644 (2013)....................... 8, 9
 

US Airways, Inc. v. McCutchen, 133 S. Ct. 1537
 

(2013) .......................................................................... 10, 16, 19
 

Statute and regulations: 

Employee Retirement Income Security Act of 1974, 

29 U.S.C. 1132(a)(3) (§ 502(a)(3)) ........................... passim 

29 C.F.R.: 

29 U.S.C. 1001 et seq. ............................................................1 

29 U.S.C. 1002(21)(A) .......................................................13
 

29 U.S.C. 1132(a)(1)(B) (§ 502(a)(1)(B)) .........................20
 

Section 2520.102-3(l) .........................................................22
 

Section 2520.102-3(t).........................................................22
 
 

 


 


 


 


 


 

V 

Miscellaneous: Page 

Restatement of Restitution and Unjust Enrichment 

(1936) .......................................................................... 12, 13, 14
 

5 Austin Wakeman Scott, The Law of Trusts
 

4 Spencer W. Symons, Pomeroy’s Equity
 

(3d ed. 1967)..................................................................... 14, 18
 

Jurisprudence (5th ed. 1941) .................................. 11, 12, 18
 

 


 

In the Supreme Court of the United States
 

No. 13-130 

SHARON THURBER, PETITIONER
 

v. 

AETNA LIFE INSURANCE CO., ET AL. 

ON PETITION FOR A WRIT OF CERTIORARI 

TO THE UNITED STATES COURT OF APPEALS 

FOR THE SECOND CIRCUIT 

BRIEF FOR THE UNITED STATES AS AMICUS CURIAE 

This brief is submitted in response to the Court’s 

order inviting the Solicitor General to express the 

views of the United States. In the view of the United 

States, the petition for a writ of certiorari should be 

denied. 

STATEMENT 

1. Petitioner worked at Quest Diagnostics, Inc., 

from 1993 until August 2007, when she was involved in 

a car accident that exacerbated damage to her knees 

from a previous accident. Pet. App. 29-30. At the 

time of the second accident, petitioner was a participant in a disability benefits plan (the Plan) administered by respondent and governed by the Employee 

Retirement Income Security Act of 1974 (ERISA), 29 

U.S.C. 1001 et seq. Pet. App. 3. The Plan, which provided for payment of both short-term and long-term 

(1) 
 

 

 

 

2 

disability benefits, gave respondent “discretionary 

authority to: determine whether and to what extent 

employees and beneficiaries are entitled to benefits.” 

Id. at 8 n.1. The summary plan description (SPD) 

similarly explained that respondent “has the discretionary authority to determine eligibility for benefits, 

decide claim appeals, and to interpret provisions of 

the plan.” Ibid. The Plan also provided that disability 

benefits “may be reduced” if a beneficiary receives 

“Other Income Benefits,” including automobile nofault wage-replacement benefits, for the same illness 

or injury for which Plan benefits were paid. Id. at 63-

64. 

After her August 2007 accident, petitioner applied 

for and was granted six months of short-term disability benefits under the Plan. Pet. App. 4. At the same 

time, petitioner applied under her own automobile 

insurance policy for no-fault wage-replacement benefits, and was granted $1,202.32 per month in such 

benefit payments. Ibid. 

After receiving six months of short-term benefits 

under the Plan, petitioner applied for long-term disability benefits. Pet. App. 4. As part of that application, petitioner completed a questionnaire, in which 

she reported that she had received the no-fault wagereplacement payments under her automobile policy. 

Id. at 4, 54. Respondent ultimately denied petitioner’s 

claim for long-term benefits, finding that she could 

still perform the functions of her position. Id. at 5. 

2. Petitioner filed suit in the United States District 

Court for the Western District of New York challenging the denial of long-term disability benefits. Pet. 

App. 6-7. Respondent defended the denial of benefits 

and counterclaimed under ERISA Section 502(a)(3), 
 

3 

seeking “equitable restitution of $7,213.92” based on 

petitioner’s receipt of the no-fault insurance benefits. 

Id. at 7; see 29 U.S.C. 1132(a)(3). 

a. Applying an abuse-of-discretion standard based 

on the Plan language granting respondent discretion 

to determine benefit claims, Pet. App. 42-43; see Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115 

(1989), the district court granted summary judgment 

to respondent on petitioner’s claim for benefits, Pet. 

App. 53, 58. 

b. The district court rejected respondent’s counterclaim for restitution, awarding petitioner summary 

judgment on that issue. Pet. App. 58. The court observed that “[r]estitution in equity is only available 

where the money in question can be identified as ‘belonging in good conscience to the plaintiff.’” Id. at 56 

(quoting Great-West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204, 213 (2002)). In the court’s view, the 

particular terms of the Plan at issue here did not establish that the money in question “‘belong[ed]’ to 

[respondent].” Ibid. Instead, the Plan used discretionary rather than mandatory language—stating that 

benefits “may be reduced” if other compensation is 

received and that the Plan “may require [benefit 

recipients] to return [any] overpayment within thirty 

(30) days.” Ibid. 

The district court determined that those Plan provisions did “not explicitly bind the Plan participant to 

reimburse overpaid funds, but simply grant[ed] [respondent] the ability to seek the funds.” Pet. App. 56. 

Accordingly, the Plan gave respondent only “a contractual and legal right to exercise [its] option to seek 

recovery of the allegedly overpaid funds,” but not an 

equitable “right to the funds themselves.” Id. at 57. 
 

4 

3. The court of appeals affirmed in part and reversed in part. Pet. App. 1-27. 

a. Based on petitioner’s concession that both the 

underlying plan document and the SPD granted respondent discretion to make benefit determinations, 

the court of appeals concluded that the district court 

properly applied an abuse-of-discretion standard of 

review to respondent’s denial of petitioner’s claim for 

benefits. Pet. App. 7-8. Given the clear language in 

the Plan and SPD, the court found it “of no consequence” that petitioner purportedly did not have notice of the grant of discretion because the only document she allegedly received (a plan booklet) did not 

contain a clear reservation of discretion to respondent. 

Id. at 8, 11. The court then concluded that the district 

court correctly determined that respondent’s denial of 

petitioner’s claim for long-term disability benefits was 

supported by substantial evidence and consequently 

affirmed the grant of summary judgment to respondent on that claim. Id. at 12-14. 

b. The court of appeals, however, reversed the district court’s dismissal of respondent’s counterclaim, 

concluding that the counterclaim “constituted an action for ‘appropriate equitable relief.’” Pet. App. 15 

(quoting 29 U.S.C. 1132(a)(3)). 

The court of appeals disagreed with the district 

court that the Plan’s language was insufficient to 

create an equitable lien by agreement. Pet. App. 23-

25. The court thought it “immaterial” that other cases 

involving equitable liens by agreement “require[d]” 

participants to reimburse insurers, while the one at 

issue here provided that the insurer “may” seek recovery. Id. at 24. 
5 

The court of appeals explained that in Sereboff v. 

Mid Atlantic Medical Services, Inc., 547 U.S. 356, 

362-363 (2006), this Court had classified as equitable 

an insurer’s claim for “specifically identifiable funds 

that were within the possession and control of the 

[participants].” Pet. App. 17-18. The court of appeals 

noted that this case differed from Sereboff in that 

petitioner had already spent the third-party benefits 

before respondent sought to recover the overpayment. 

Id. at 21. The court did not think that distinction 

made a difference, however, because it read Sereboff 

to mean that “[w]hen an ERISA plan creates an equitable lien by agreement between the insurer and the 

beneficiary, the insurer’s ownership of the overpaid 

funds is established regardless of whether the insurer 

can satisfy strict tracing rules,” id. at 22. 

DISCUSSION 

In the government’s view, the petition for a writ of 

certiorari should be denied. On the first question 

presented, petitioner is correct (Pet. 9) that the courts 

of appeals are divided over the ability of an ERISA 

fiduciary to recover overpayments from a plan participant, as appropriate equitable relief under ERISA 

Section 502(a)(3), where the fiduciary has not identified a particular fund that is in the plan participant’s 

possession and control. Petitioner is also correct that 

the court of appeals erred in holding that respondent 

could recover here. But there is a logically antecedent 

issue in this case regarding whether the particular 

plan language at issue is sufficient to create a claim 

for equitable relief at all. The presence of that casespecific issue could prevent the Court from deciding 

the first question presented, thus making this a poor 
6 

vehicle for resolving the conflict in the courts of appeals. 

The second question presented involves the court 

of appeals’ holding that, where a plan vests an ERISA 

fiduciary with discretionary authority to construe the 

plan’s terms and determine eligibility for benefits, 

courts must review that fiduciary’s benefit determinations under a deferential, abuse-of-discretion standard 

of review—regardless of whether the plan participant 

who is claiming benefits received actual notice of that 

grant of discretion. No court of appeals has held otherwise. Consequently, further review of the court of 

appeals’ holding, which represents a straightforward 

application of this Court’s decision in Firestone Tire & 

Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989) (Firestone), is not warranted. 

A. The First Question Presented Implicates A Conflict In 

The Courts Of Appeals, But This Petition Is A Poor 

Vehicle For Resolving It 

1. The first question presented is “[w]hether an 

ERISA Plan may enforce an equitable lien by agreement under [ERISA Section] 502(a)(3) where it has 

not identified a particular fund that is in the defendant’s possession and control at the time the Plan asserts its equitable lien.” Pet. i. For the reasons discussed below, see pp. 15-20, infra, it does not appear 

that the Plan terms at issue here actually create an 

equitable lien by agreement in the first place, so the 

premise of this question presented appears to be absent in this case. Putting that issue aside, however, 

petitioner is correct (Pet. 11-15) that the courts of 

appeals are divided on this question. 

Like the court of appeals in this case, the First, 

Third, Sixth, and Seventh Circuits have held that plan 
7 

fiduciaries may enforce an equitable lien against plan 

participants and beneficiaries who have recovered 

both plan benefits and other recoveries subject to 

offset, even where the funds over which the lien is 

asserted have been dissipated. See, e.g., Cusson v. 

Liberty Life Assurance Co., 592 F.3d 215, 231 (1st Cir. 

2010) (finding it irrelevant that, “unlike the insurer in 

Sereboff, Liberty has not identified a specific account 

in which the funds are kept or proven that they are 

still in Cusson’s possession” because “the contract 

between Cusson and Liberty put Cusson on notice 

that she would be required to reimburse Liberty for 

an amount equal to what she might get from Social 

Security”) (citing Sereboff v. Mid Atl. Med. Servs., 

Inc., 547 U.S. 356 (2006)); Funk v. CIGNA Grp. Ins., 

648 F.3d 182, 194 (3d Cir. 2011) (Because “there was 

an equitable lien by agreement that attached to the 

Social Security award as soon as Funk received it, 

dissipation of the funds was immaterial.”); Longaberger Co. v. Kolt, 586 F.3d 459, 466-467 (6th Cir. 2009); 

Gutta v. Standard Select Trust Ins. Plans, 530 F.3d 

614, 621 (7th Cir. 2008). 

By contrast, in Bilyeu v. Morgan Stanley Long 

Term Disability Plan, 683 F.3d 1083 (2012), cert. 

denied, 133 S. Ct. 1242 (2013), the Ninth Circuit held 

that, where the participant “has spent the overpaid 

benefits,” the insurer “is not seeking to recover a 

specified fund that is preserved and in [the participant’s] possession” (as is required for enforcement of 

an equitable lien by agreement), but is instead seeking 

payment of “money out of [the participant’s] general 

assets” (a legal remedy unavailable under ERISA 

Section 502(a)(3)). Id. at 1094. In reaching that conclusion, the Ninth Circuit “recognize[d] that a number 
 

 

 

8 

of circuits” had held that “a fiduciary can assert an 

equitable lien—presumably against a beneficiary’s 

general assets—even if the beneficiary no longer 

possesses the specifically identified funds.” Ibid. 

(citing, inter alia, Funk, 648 F.3d at 194 n.14; Cusson, 

592 F.3d at 231; Longaberger Co., 586 F.3d at 466; 

Gutta, 530 F.3d at 621). The Ninth Circuit determined that those decisions were based on a misreading of Sereboff ’s “discussion of tracing rules.” Ibid. 

The court explained that “[t]he tracing issue in Sereboff was whether [the insurer] could obtain an equitable lien against specifically identified funds when [the 

insurer] had never possessed those funds itself—an 

issue that has no relevance here.” Id. at 1095 (citing 

547 U.S. at 364-365). In the Ninth Circuit’s view, 

“[n]othing in Sereboff suggests that a fiduciary can 

enforce an equitable lien against a beneficiary’s general assets when specifically identified funds are no 

longer in a beneficiary’s possession.” Ibid. 

In Treasurer, Trustees of Drury Industries, Inc. 

Health Care Plan & Trust v. Goding, 692 F.3d 888 

(2012), cert. denied, 133 S. Ct. 1644 (2013), the Eighth 

Circuit likewise held that a plan’s attempt to recover 

benefits sought legal, not equitable, relief and thus 

was not within the scope of relief permitted by ERISA 

Section 502(a)(3). Id. at 897. Specifically, the court 

held that an ERISA-covered health-care plan could 

not recover money from the law firm that represented 

a participant in a third-party tort suit. See ibid. Although the firm initially held the settlement funds in a 

trust for its client, by the time the plan sued, the firm 

had already distributed the money to its client (the 

plan participant) and “thus no longer ha[d] any money 
 

 

9 

to which [the plan] claims an [equitable] interest.” 

Ibid. 

2. In the government’s view, the court of appeals in 

this case erred in concluding that a plan fiduciary can 

enforce an equitable lien regardless of whether the 

funds at issue have been dissipated. Accord Bilyeu, 

683 F.3d at 1094-1095. 

a. This Court has addressed a plan’s attempt to recoup plan benefits from a participant under ERISA 

Section 502(a)(3) in two key cases. First, in GreatWest Life & Annuity Insurance Co. v. Knudson, 534 

U.S. 204 (2002) (Great-West), the Court determined 

that Section 502(a)(3) did not permit a reimbursement 

action against a plan participant who received medical 

benefits following a car accident. Id. at 207. The plan 

provisions in that case allowed for a “first lien” upon 

any third-party recovery up to the amount of benefits 

paid by the plan and also purported to make the beneficiary “personally liable * * * up to the amount of 

the first lien.” Ibid. The participant had obtained a 

recovery in a tort settlement with third parties. The 

state court’s order approving the settlement provided 

that defendants would pay the relevant settlement 

proceeds directly into a special needs trust, which had 

not been named as a party in the reimbursement action. Id. at 208, 214, 220. 

The Court in Great-West explained that “a plaintiff 

could seek restitution in equity, ordinarily in the form 

of a constructive trust or an equitable lien, where 

money or property identified as belonging in good 

conscience to the plaintiff could clearly be traced to 

particular funds or property in the defendant’s possession.” 534 U.S. at 213 (citations omitted). But 

where the plaintiff did not seek to impose the con-
 

10 

structive trust or equitable lien on particular funds in 

the defendant’s possession, the Court explained, the 

suit was not for equitable relief but instead sought 

“the imposition of personal liability,” a legal remedy. 

Id. at 214. Because the settlement funds in GreatWest had been placed directly in a special needs trust 

and were not in the participant’s possession, the Court 

held that the fiduciary sought, “in essence, to impose 

personal liability on [the beneficiary] for a contractual 

obligation to pay money—relief that was not typically 

available in equity,” and thus not available under 

ERISA Section 502(a)(3). Id. at 210; see CIGNA 

Corp. v. Amara, 131 S. Ct. 1866, 1878-1879 (2011) 

(discussing holding in Great-West). 

Subsequently, in Sereboff, the Court addressed a 

claim for reimbursement by the sponsor of a healthcare plan under a plan provision that required beneficiaries who had been injured by a third party to reimburse the plan for benefits they received from any 

recoveries from the third party. 547 U.S. at 359. 

Because the beneficiaries in Sereboff had placed the 

third-party settlement proceeds of their tort suit in 

investment accounts that remained in their possession 

and control at the time of the ERISA suit, the Court 

concluded that the “impediment to characterizing the 

relief in [Great-West] as equitable [was] not present.” 

Id. at 362. The Court recognized that, like the plan in 

Great-West, the plan in Sereboff “alleged breach of 

contract and sought money, to be sure, but it sought 

its recovery through a constructive trust or equitable 

lien on a specifically identified fund, not from the 

[beneficiaries’] assets generally, as would be the case 

with a contract action at law.” Id. at 363; see US Air-
11 

ways, Inc. v. McCutchen, 133 S. Ct. 1537, 1544-1545 

(2013) (following Sereboff). 

b. In Sereboff, the “particular fund” in question 

still existed and was in the beneficiaries’ possession 

and control in their investment account, 547 U.S. at 

360, so the question presented here was not directly 

implicated. The logic of Sereboff nonetheless suggests 

an answer to the question in this case because where, 

as here, the “particular fund” identified by the Plan 

has been dissipated, the Plan’s only choice is to seek 

recovery from the participant’s “assets generally.” Id. 

at 362-363. Sereboff establishes that such a recovery 

would be legal, not equitable, and thus unavailable 

under ERISA Section 502(a)(3). Ibid. 

That conclusion is consistent with the principles of 

equity to which this Court has looked when analyzing 

the type of relief available under ERISA Section 

502(a)(3). E.g., Mertens v. Hewitt Assocs., 508 U.S. 

248, 256 (1993) (Section 502(a)(3) authorizes only 

“those categories of relief that were typically available in equity.”). An equitable lien “constitutes a 

charge or encumbrance upon [a particular] thing, so 

that the very thing itself may be proceeded against in 

an equitable action, and either sold or sequestered 

under a judicial decree,” with the proceeds “applied 

upon the demand of the creditor in whose favor the 

lien exists.” 4 Spencer W. Symons, Pomeroy’s Equity 

Jurisprudence § 1233, at 692 (5th ed. 1941) (Pomeroy). That general rule holds when the equitable lien 

is established by agreement: the contract in question 

“recognizes, in addition to the personal obligation, a 

peculiar right over the thing concerning which the 

contract deals.” Id. § 1234, at 695. When an agreement establishes such a right, “the plaintiff is enabled 
 

 

12 

to follow the identical thing, and to enforce the defendant’s obligation by a remedy which operates directly upon that thing.” Ibid. 

At equity, it followed from these general principles 

that an “equitable lien [could] be established and 

enforced only if there [was] some property which 

[was] subject to the lien.” Restatement of Restitution 

and Unjust Enrichment § 161, cmt. e (1936) (Restatement); see Pomeroy § 1233, at 692 (“It is the very 

essence of [the equitable lien] that while the lien continues the possession of the thing remains with the 

debtor or the person who holds the proprietary interest subject to the encumbrance.”). To be sure, 

“[w]here property is subject to an equitable lien and 

the owner of the property disposes of it and acquires 

other property in exchange, he holds the property so 

acquired subject to the lien.” Restatement § 161, cmt. 

e; see id. §§ 202(b), 203. Similarly, when the property 

in question was “mingled with other property in one 

indistinguishable mass, the lien can be enforced 

against the mingled mass.” Id. § 161, cmt. e. 

As particularly relevant here, however, where “the 

property subject to the equitable lien can no longer be 

traced, the equitable lien cannot be enforced.” Restatement § 161, cmt. e. Thus, “where a person 

wrongfully disposes of the property of another but the 

property cannot be traced into any product, the other 

has merely a personal claim against the wrongdoer 

and cannot enforce a constructive trust or lien upon 

any part of the wrongdoer’s property.” Id. § 215(1).1 

1 In this case, there was nothing wrongful in petitioner’s having 

spent the no-fault insurance benefits because the Plan did not obligate petitioner to hold those funds for respondent. See pp. 15-20, 

infra. 
 

13 

This Court made that very point in Great West, noting 

that “where ‘the property [sought to be recovered] or 

its proceeds have been dissipated so that no product 

remains, [the plaintiff’s] claim is only that of a general 

creditor,’ and the plaintiff ‘cannot enforce a constructive trust of or an equitable lien upon other property 

of the [defendant].’” 534 U.S. at 213-214 (quoting 

Restatement § 215, cmt. a, at 867) (brackets in original). 

Moreover, any trust in this case was constructive, 

not express, thus making the type of personal, makewhole relief sought by respondent against petitioner 

unavailable. This Court recently held that ERISA 

Section 502(a)(3) allows a suit by a plan participant for 

make-whole monetary relief against a plan fiduciary, 

“whom ERISA typically treats as a trustee.” CIGNA 

Corp., 131 S. Ct. at 1879. ERISA fiduciaries, whether 

they are the formal trustees of the plan or the individuals or entities that control or manage plans and their 

assets, see 29 U.S.C. 1002(21)(A), are expressly 

charged under the statute with the highest trust-law 

duties of loyalty and care, Donovan v. Bierwirth, 680 

F.2d 263, 272 n.8 (2d Cir.), cert. denied, 459 U.S. 1069 

(1982), and stand at the heart of the statutory scheme. 

See Mertens, 508 U.S. at 253, 262-263 (contrasting the 

central role of fiduciaries and their correspondingly 

greater liability with the role of third-party service 

providers); see also Harris Trust & Sav. Bank v. 

Salomon Smith Barney Inc., 530 U.S. 238, 250-251 

(2000). But nothing in the statutory scheme itself 

imposes similar fiduciary obligations on plan participants and beneficiaries. 

Nor does equity appear to have imposed personal 

liability on a merely constructive trustee, such as a 
14 

plan participant or beneficiary in an overpayment 

case, who dissipated the assets at issue. See, e.g., 

Barnes v. Eastern & W. Lumber Co., 287 P. 2d 929, 

949 (Or. 1955) (in banc) (rejecting joint and several 

liability for constructive trustees and holding instead 

that a constructive trust is “simply a procedural device” that “enables a court to lay hold of an item of 

property in the possession of one who gained it wrongfully”). That was so because a “constructive trust, 

unlike an express trust, is not a fiduciary relation.” 

Restatement § 160 cmt. a; see generally 5 Austin 

Wakeman Scott, The Law of Trusts § 462.1, at 3415 

(3d ed. 1967) (Scott) (same). 

c. In arguing that it may enforce an equitable lien 

by agreement even without identifying a fund still in 

petitioner’s possession, respondent relies (Br. in Opp. 

27) on the Court’s statement in Sereboff that the plan’s 

“inability to satisfy the ‘strict tracing rules’ for ‘equitable restitution’ is of no consequence.” 547 U.S. at 

365. But that statement quite clearly was not meant 

to negate the need to identify a fund to which the 

equitable lien attached—a requirement the Court had 

just described at length, id. at 362-363—but was instead aimed solely at rejecting the argument that the 

funds sought by the plan in that case had to be traceable back to the plan itself. Id. at 364 (discussing requirements where “an asset belonging to the plaintiff 

had been improperly acquired by the defendant and 

exchanged by him for other property”); accord Bilyeu, 

683 F.3d at 1092 (reading Sereboff’s rejection of 

“strict tracing” to mean only that, “to satisfy the requirements for an equitable lien by agreement, Mid 

Atlantic was not required to trace the funds in the 

Sereboffs’ tort recovery back to Mid Atlantic’s own 
 

15 

possession”). Sereboff establishes that a fund need 

not be traced back to the plaintiff for an equitable lien 

by agreement to attach, but that distinct holding does 

not dispense with the requirement that there be a 

fund in the defendant’s possession in the first place. 

We recognize that this result can leave a gap in 

ERISA’s mechanisms for enforcing plan terms, where 

the participant or beneficiary has received and spent 

the funds out of which reimbursement was to be made 

before the plan took action to obtain or recover those 

funds. But the Court concluded in Great-West that 

that consequence is insufficient to overcome the text 

of Section 502(a)(3), which, “by its terms, only allows 

for equitable relief.” 534 U.S. at 221. 

3. This petition for a writ of certiorari is not an appropriate vehicle for addressing the availability of 

equitable relief for reimbursement of benefits paid by 

a plan because it does not appear that the relevant 

Plan terms actually established an equitable lien by 

agreement of the kind this Court has found enforceable under ERISA Section 502(a)(3). That predicate 

and case-specific question of plan interpretation could 

prevent the Court from reaching the first question 

presented. 

a. In this Court’s previous reimbursement cases, 

the relevant plan language imposed a clear and mandatory obligation on participants and beneficiaries, 

such that the plan itself could be understood to have 

imposed an equitable lien by agreement on third-party 

recoveries the moment they were received. For example, the plan in Sereboff “require[d] a beneficiary 

who ‘receives benefits’ under the plan for * * * 

injuries [caused by a third party] to ‘reimburse [Mid 

Atlantic]’ for those benefits from ‘[a]ll recoveries from 
 

 

 

 

 

 

 

 

 

16 

a third party (whether by lawsuit, settlement, or otherwise).’” 547 U.S. at 359 (first, third, and fourth 

pairs of brackets in original); see Pet. App. 38a, Sereboff, supra (No. 05-260) (“All recoveries from a third 

party * * * must be used to reimburse the Company * * * for benefits paid.”). The relevant provision in US Airways similarly provided that “[i]f [US 

Airways] pays benefits for any claim you incur as the 

result of negligence, willful misconduct, or other actions of a third party, . . . [y]ou will be required to 

reimburse [US Airways] for amounts paid for claims 

out of any monies recovered from [the] third party.” 

133 S. Ct. at 1543 (second, third, fourth, and fifth pairs 

of brackets in original).2 Plan provisions at issue in 

other court of appeals decisions addressing the availability of relief under Section 502(a)(3) even in the 

absence of an identifiable fund in the defendant’s 

possession also use mandatory language, imposing an 

obligation on participants and beneficiaries from the 

moment they receive other benefits.3 

2 The quoted provision was from the summary plan description, 

not the plan itself, but the Court treated it as if it came from the 

plan because the parties had litigated the case on that basis. See 

US Airways, 133 S. Ct. at 1543 n.1. 3 See, e.g., Bilyeu, 683 F.3d at 1090 (“I agree to reimburse the 

Insurer any such overpayment within thirty (30) days of my receipt of such funds.”); Funk, 648 F.3d at 194 (“The Plan provides 

that a Social Security offset ‘shall be . . . payable . . . by 

the recipient.’”); Longaberger Co., 586 F.3d at 467 (“[T]he explicit 

terms of the Plan state that it ‘shall automatically have a first 

priority lien upon the proceeds of any recovery by you or your 

Dependent(s) from such party to the extent of any benefits provided to you or your Dependent(s) by the Plan.’”); Gutta, 530 F.3d at 

620 (“Each month your Maximum LTD [Long Term Disability] 

Benefit will be reduced by the Income From Other Sources for the 
 

 

 

 

17 

The plan provisions here are different, as they appear to merely vest discretion in the Plan to recover 

the relevant category of overpayments, rather than 

impose a free-standing repayment obligation on petitioner. As the district court explained, “the Plan does 

not explicitly bind the Plan participant to reimburse 

overpaid funds, but simply grants [respondent] the 

ability to seek the funds.” Pet. App. 56. 

The Plan places “other income benefits” received 

by a participant into three categories. First, it provides that “[i]ncome earned from a part-time return to 

work at Quest Diagnostics or earnings received while 

on an approved rehab program will result in a reduction of the disability benefit.” Pet. App. 64 (emphasis 

added). That is the only category of mandatory offset 

in the plan. Second, the Plan specifies certain categories of “other income benefits” that “will not reduce 

* * * [Plan] benefits,” including severance pay and 

disbursements from retirement savings accounts. Id. 

at 66-67 (emphasis added). Third, and as directly 

relevant here, the Plan establishes a middle category 

of “other income benefits” the receipt of which means 

that a participant’s disability benefits under the Plan 

“may be reduced.” Id. at 63 (emphasis added); see id. 

at 64-65 (listing those categories, including “automobile no-fault wage replacement benefits,” the category 

of other income benefits at issue here). 

same monthly period.”) (brackets in original); Br. of DefendantsAppellees at 21, Cusson, supra (No. 08-2381) (“I understand that I 

must repay this overpayment to Liberty Life.”). Except for the 

provision in Longaberger, the quoted provisions did not explicitly 

state that the overpayments or third-party payments constituted a 

fund out of which reimbursement was to be made, but they were 

nonetheless understood to be sufficient to create an equitable lien 

by agreement on particular funds. 
 

 

 

18 

Consistent with the generally discretionary nature 

of the reduction provision, the Plan provides that “[i]f 

payments are made in amounts greater than the benefits [a participant is] entitled to receive, the plan may” 

take one of several steps. Pet. App. 67 (emphasis 

added). Among the Plan’s choices are to “[r]equire 

[the participant] to return the overpayment within 

thirty (30) days” or to “[p]lace a lien, if not prohibited 

by state law, in the amount of the overpayment on the 

proceeds of any other income.” Ibid. 

The mandatory plan provision at issue in Sereboff 

made the plan participant effectively a constructive 

“trustee as soon as he” received a third-party recovery because he had already entered into “a contract to 

convey” that recovery “even before it [was] acquired.” 

547 U.S. at 363-364 (quoting Barnes v. Alexander, 232 

U.S. 117, 121 (1914)). That is consistent with the nature of an equitable lien by agreement, through which 

“the contracting party sufficiently indicates an intention to make some particular property, real or personal, or fund, * * * described or identified [in the 

contract], a security for a debt or other obligation, or 

whereby the party promises to convey or assign or 

transfer the property as security.” Pomeroy § 1235, 

at 696. If the property has not yet been acquired at 

the time the agreement is executed, the lien attaches 

when the property is ultimately acquired. See id. 

§ 1236, at 699-701; see also Scott § 462.4, at 3420 

(“Where the title to property is acquired by one person under such circumstances that he is under a duty 

to surrender it, a constructive trust immediately arises.”). 

In its attempt to situate this case in those equitable 

authorities, respondent contends (Br. in Opp. 24) that 
 

 

19 

“the equitable lien by agreement” in this case “attached at the very instant petitioner came into possession of the no-fault benefits.” But respondent cites no 

provision of the Plan that would have had that effect. 

Nothing in the Plan appears to have imposed a selfexecuting obligation on petitioner to provide her nofault benefits to respondent (or to hold them for its 

benefit) as soon as she received them. Instead, the 

Plan merely authorized respondent, in its discretion, 

to seek repayment at some point in the future. Similarly, the Plan itself did not impose a lien on the nofault benefits when petitioner received them; instead, 

the Plan authorized respondent, in its discretion, to 

later “[p]lace a lien” on the benefits (Pet. App. 67 

(emphasis added)), something it effectively attempted 

to do only when it filed its counterclaim in this case. 

At that point, the payments had been dissipated, and 

there was no fund (or substitute asset) in petitioner’s 

possession to which any such lien could attach. 

b. The court of appeals rejected this analysis on 

the ground that is was “overly formalistic.” Pet. App. 

24. But a certain amount of formalism is inevitable 

when construing and applying a statutory term, like 

“appropriate equitable relief,” 29 U.S.C. 1132(a)(3), 

that reflects principles from the time of the “divided 

bench, * * * with its technical refinements.” 

Mertens, 508 U.S. at 256-257. Nor is it “overly formalistic” (Pet. App. 24) to carefully examine and apply 

plan terms as written, for, as the Court has explained, 

“[t]he agreement itself becomes the measure of the 

parties’ equities.” US Airways, 133 S. Ct. at 1548. 

Indeed, “[t]he statutory scheme, [this Court has] often 

noted, ‘is built around reliance on the face of writ- 
20 

ten plan documents.’” Ibid. (quoting Curtiss-Wright 

Corp. v. Schoonejongen, 514 U.S. 73, 83 (1995)). 

c. Petitioner has not sought review of this question 

of plan interpretation. But even if she had, review 

would not be warranted. There is no indication that 

the plan terms at issue here are common; nor is there 

any disagreement in the courts of appeals on how to 

interpret them. A holding by this Court construing 

and applying those plan terms would therefore likely 

not have any broader significance. And if the Court 

held that the plan terms here did not establish an 

equitable lien by agreement (or even a self-executing 

repayment obligation), that holding presumably would 

dispose of the case without any occasion to address 

the circuit conflict petitioner suggests using her petition to resolve. 

B. The Second Question Presented Does Not Warrant 

This Court’s Review 

There is no conflict in the courts of appeals on the 

second question presented, and it does not otherwise 

merit this Court’s review. 

1. As this Court has explained, “a denial of benefits 

challenged under [29 U.S.C.] 1132(a)(1)(B) is to be 

reviewed under a de novo standard unless the benefit 

plan gives the administrator or fiduciary discretionary 

authority to determine eligibility for benefits or to 

construe the terms of the plan.” Firestone, 489 U.S. 

at 115; accord Metropolitan Life Ins. Co. v. Glenn, 

554 U.S. 105, 116 (2008) (declining to “overturn Firestone” by “adopting a rule that in practice could bring 

about near universal review by judges de novo—i.e., 

without deference—of the lion’s share of ERISA plan 

claims denials”). The Plan in this case, as explained 

clearly in the SPD, does confer such discretion, a 
21 

proposition that petitioner does not dispute. Pet. App. 

8. Therefore the district court and court of appeals 

correctly concluded that a deferential standard of 

review was warranted under Firestone. 

As petitioner acknowledges, numerous courts of 

appeals in addition to the Second Circuit in this case 

have given effect to discretionary clauses—even when 

the plan participants were not given notice of these 

clauses in an SPD. Pet. 23 n.7 (citing cases from the 

First, Fourth, Sixth, Eighth, Ninth and Eleventh 

Circuits). Although petitioner argues (Pet. 23) that 

the Seventh Circuit held to the contrary in Herzberger 

v. Standard Ins. Co., 205 F.3d 327 (2000), that is incorrect. 

Contrary to petitioner’s suggestion, Herzberger 

said nothing about what must be disclosed in the plan 

summary or whether a claimant must receive actual 

notice of a discretionary clause, either in an SPD or in 

other materials like the supplemental booklet provided to petitioner here. The only issue in Herzberger 

was whether the language in the plan documents 

themselves—which merely stated that benefits would 

be paid when the administrator decided there was 

adequate proof of disability—conferred discretion on 

the insurance company so that a denial of benefits 

would be reviewed by a court under a deferential 

rather than de novo standard of review. 205 F.3d at 

331. The court held that that plan language, which 

merely “states the obvious” fact that benefits would 

not be paid unless a claimant was found disabled, 

“does not give the employee adequate notice that the 

plan administrator is to make a judgment largely 

insulated from judicial review by reason of being dis-
 

 

 

 

22 

cretionary,” and thus was not sufficient to confer 

discretion under Firestone. Id. at 332. 

Accordingly, as the court of appeals here recognized, Herzberger “did not in any way involve, and the 

court’s language did not address, a situation,” like the 

one at issue in this case, “in which the plan’s language 

did unambiguously provide for discretion (as did the 

SPD), but the employee seeking benefits had not 

received a copy of either document.” Pet. App. 10. 

This reading of Herzberger is confirmed by the Seventh Circuit’s later decision in Raybourne v. Cigna 

Life Ins. Co., 576 F.3d 444 (2009), where that court 

gave force to a discretionary grant contained in a plan 

document that the participant “did not receive until 

* * * litigation was underway.” Id. at 448-449. 

2. Petitioner contends (Pet. 26) that “the Second 

Circuit’s ruling undermines ERISA’s disclosure requirements.” More specifically, she contends that this 

Court should grant review to resolve a dispute about 

“whether SPDs must disclose the existence of a discretionary clause that would trigger a deferential 

standard of review,” and should hold that the SPD 

must contain such a disclosure under the statutes and 

governing regulations. Pet. 27. This case does not 

present an appropriate vehicle for resolving this asserted dispute because the SPD in this case did disclose the discretionary clause. See Pet. App. 8. 

Moreover, the Department of Labor’s regulations 

governing the content of plan summaries do not require that a grant of discretionary authority be included in the SPD. See 29 C.F.R. 2520.102-3(l); see 

also 29 C.F.R. 2520.102-3(t). 
23 

CONCLUSION 

The petition for a writ of certiorari should be denied. 

Respectfully submitted. 

DONALD B. VERRILLI, JR. 

M. PATRICIA SMITH Solicitor General 

Solicitor of Labor EDWIN S. KNEEDLER
 

G. WILLIAM SCOTT Deputy Solicitor General 

Acting Associate Solicitor JOSEPH R. PALMORE 

ELIZABETH HOPKINS Assistant to the Solicitor 

Counsel for Appellate and General 

Special Litigation 

MICHAEL HARTMAN 

Attorney
 
 

Department of Labor
 
 

MAY 2014