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Seventh Circuit Allows Participant to Seek Money Damages Following Amara Case


June 2013

The U.S. Court of Appeals for the Seventh Circuit issued a ruling in Kenseth v. Dean Health Plan Inc. interpreting the U.S. Supreme Court’s decision in CIGNA Corp. v. Amara as allowing a health plan participant to seek make-whole relief in the form of money damages for a fiduciary breach by a plan trustee. Plaintiff Deborah Kenseth alleged that her HMO provider breached its fiduciary duties by denying payment for a gastric banding procedure. Kenseth alleged that the plan’s customer call center told her the procedure would be covered when it actually was not under the terms of the plan.

The Seventh Circuit interpreted the Amara case as clarifying that “equitable relief may come in the form of money damages when the defendant is a trustee in breach of a fiduciary duty.” Further, the Seventh Circuit found that under Amara, “[m]onetary compensation is not automatically considered ‘legal’ rather than ‘equitable,” and that, “[t]he identity of the defendant as a fiduciary, the breach of a fiduciary duty, and the nature of the harm are important in characterizing the relief.” This opinion has potentially broad application in circumstances where inaccurate representations are made to plan participants concerning plan benefits.  

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