In Oregon Teamster Employers Trust v. Hillsboro Garbage Disposal, Inc., No. 13-35555 (9th Cir. 2015), the Ninth Circuit Court of Appeals (the “Court”) faced, among others, two issues: (1) whether Oregon Teamster Employers Trust (“OTET”), an Employer Health and Benefit Plan governed by ERISA, can recover damages, on a breach of contract claim, against a business which received health care benefits for two ineligible employees, and (2) whether OTET’s claims for restitution and specific performance are permitted.
As to issue (1), the Court ruled that the breach of contract claim is preempted by ERISA, since the claim is a common law claim which relates to an ERISA plan.
As to issue (2), the Court said that the claims for restitution and specific performance, brought under section 502(a)(3)(B) of ERISA, are legal, not equitable, claims for relief. Specific performance is typically a legal remedy except-unlike here- when it is sought to prevent future losses that either were incalculable or would be greater than the sum awarded. As to restitution, although the plan in question contained a promise by the beneficiary to reimburse OTET, it did not specifically identify a particular fund, distinct from the beneficiary’s general assets, from which the fiduciary will be reimbursed (that is, there is no res from which OTET seeks recovery)-a prerequisite for finding that a claim is equitable. As such, these claims are not permitted under section 502(a)(3)(B) of ERISA, which requires that the claim be equitable.