In Castillo v. Metro. Life Ins. Co., 2020 U.S. App. LEXIS 25985 (9th Cir. Aug. 17, 2020), the Ninth Circuit held that attorneys' fees incurred during the administrative review process cannot be recovered as "other equitable relief" under Section 502(a)(3) of ERISA.
Juan Castillo ("Castillo") was a participant in an ERISA plan and submitted a claim for long-term disability (LTD) benefits. Metropolitan Life Insurance Company ("MetLife"), the plan's claims administrator, approved and paid Castillo's claim for LTD benefits for four years. After receiving notice from Castillo's former employer that he received pension benefits in the form of an IRA rollover at the outset of his disability, MetLife determined this was an offset under the Plan that reduced his monthly benefits and resulted in a significant overpayment. Castillo retained counsel to represent him during the administrative review process, which resulted in a reversal of MetLife's decision and the payment of all benefits due to Castillo.
Castillo nonetheless sued MetLife for breach of fiduciary duty and sought to recover the attorneys' fees he incurred during the administrative review process as a surcharge under 29 U.S.C. § 1132(a)(3). Even though he obtained all benefits due to him under the terms of the Plan, Castillo argued he was entitled to "make whole" equitable relief under the U.S. Supreme Court's decision in CIGNA Corp. v. Amara, 563 U.S. 421 (2011). Castillo argued that MetLife breached its fiduciary duties when it misapplied the Plan's offset provisions and caused harm to Castillo in the form of the attorneys' fees he was required to pay his lawyers to get MetLife's decision reversed and his benefits paid.
The district court dismissed Castillo's case at the pleading stage and the Ninth Circuit affirmed the judgment on appeal. The Ninth Circuit first found that...
