The Plaintiffs filed a Notice of Appeal to the Second Circuit on February 7, 2013. Plaintiffs are appealing the District Court’s decision not to award relief for CIGNA’s violation of the “ERISA Section 204(h)” notice rules, which require advance notice of benefit reductions, and CIGNA’s misleading statements to its employees that their benefits were being “enhanced” and were going to be “comparable” or “larger” to the prior plan’s benefits with no “cost savings” for CIGNA.
CIGNA has filed a cross-appeal on the grounds that the District Court should not have awarded the “A +B relief” to all class members without individual testimony from each class member.
Briefing on the appeals was completed on December 11, 2013; it includes an amicus brief by the U.S. Department of Labor in support of the employees.
In October 2012, this case was reassigned to Judge Janet B. Arterton following the untimely death of Judge Mark R. Kravitz. On December 20, 2012, Judge Arterton issued a decision reaffirming Judge Kravitz’s finding that “CIGNA affirmatively misled and prevented employees from obtaining information that would have aided them in evaluating the distinctions between the old and new plans,” and that CIGNA “sought and obtained an advantage from its inequitable actions.” The Court found that CIGNA never told its employees that the new cash balance benefits were much less than the old “Part A” benefits under the CIGNA Pension Plan, often by 50%, that there were no early retirement benefits under the new cash balance plan, or that the old Part A benefits were not fully preserved under the cash balance arrangement. “[A]s a result of CIGNA’s fraud, its employees were mistaken as to its retirement benefits.”
The Court concluded that the appropriate remedy for CIGNA’s disclosure violations is “A + B” relief, which ensures that an employee will receive at least the employee’s frozen “Part A” benefit under the CIGNA Pension Plan as of January 1, 1998, plus all of the “Part B” cash balance pay and interest credits (without the opening account balance) that the employee should have earned after January 1, 1998. However, without offering any reasons, the Court declined to award the full relief that Plaintiffs requested – reinstatement of the old “Part A” formula – for CIGNA’s failure to provide advance notice of the significant reductions in benefits as required by law.
Both CIGNA and the employee class have appealed to the U.S. Court of Appeals for the Second Circuit. A decision is expected in approximately a year. The Court will direct the parties to engage in mediation to see if a resolution can be reached before then.
After the December 9, 2011 oral argument, the District Court permitted CIGNA to supplement the record to provide any evidence that CIGNA has of individual issues related to remedies before the District Court reaches its final decision on the remedies for CIGNA's disclosure violations. The parties filed supplemental expert reports from their actuarial experts in March 2012 and an evidentiary hearing was held on March 29-30, 2012.
The parties are filing briefs with the District Court on the appropriate relief for CIGNA's disclosure violations. The United States Department of Labor has filed an amicus brief supporting the Plaintiffs. Briefing will be completed in November and an oral argument before Judge Mark R. Kravitz will be held on December 9, 2011, at 9:00am in Courtroom Four, Richard C. Lee United States Courthouse, 141 Church Street, New Haven, CT 06510.
The Supreme Court issued its decision on May 16, 2011. Click here to read the Supreme Court’s decision. The Assistant Secretary of Labor for Employee Benefits has declared this “a great day for plan participants.” The Supreme Court held that the District Court has the authority to award additional pension benefits to remedy the misleading statements in CIGNA’s Summary Plan Description.
The Court also held that each plan participant does not need to individually prove how he or she detrimentally relied on CIGNA’s misstatements to obtain that relief. We expect the Supreme Court to issue an order in the next 30 days that will formally send the case back to the District Court to apply the standards set forth in its decision. On May 23, 2011, the Supreme Court also granted Plaintiffs’ petition for certiorari about obtaining appropriate relief for CIGNA’s misleading ERISA “Section 204(h)” notice and its representations about providing “comparable benefits” under the cash balance plan. These issues will also be sent back to the District Court to reconsider the appropriate relief, too.
Click here to read a May 21, 2011 article from the Wall Street Journal about the Supreme Court’s important decision. We will continue to update this page as the case moves forward.
The oral argument before the Supreme Court was held on Tuesday, November 30th, 2010 at 10:00 am. The Supreme Court is located at One First Street, NE, Washington, DC 20543. Attorney Stephen Bruce will be arguing on behalf of the Amara respondents. Seating in the courtroom is available on a first-come, first-seated basis. A transcript of the argument is available here.
On June 28, 2010, the Supreme Court granted CIGNA's petition for certiorari asking the Court to review the lower court's order awarding additional pension benefits to remedy CIGNA's "downright misleading" disclosures in its Summary Plan Description concerning periods of "wear-away" in which CIGNA effectively froze the growth of pension benefits for one or more years.
The Supreme Court will decide whether each of the 27,000 employees covered by this case will be required to individually prove how he or she relied on CIGNA's failure to disclose any periods of "wear-away" and its misleading statements that "each dollar's worth of credits is a dollar of retirement benefits payable to you" and that employees "will see the growth in [their] total retirement benefits each year." The Supreme Court is holding the employees' petition for certiorari about the lower court's award of only partial relief for CIGNA's misleading notices until CIGNA's petition is decided.
On October 6, 2009, the court of appeals upheld Judge Kravitz's decision against CIGNA for violating ERISA's disclosure rules and his decision ordering limited remedies for those violations. On January 4, 2010, both parties filed petitions for certiorari asking the Supreme Court to review the court of appeals’ decision (the plaintiff employees have asked the Supreme Court to direct the court of appeals and Judge Kravitz to consider more complete remedies for the violations). The final papers related to those petitions were filed on February 16, 2010. If the Supreme Court denies the parties’ petitions, the case will go back to Judge Kravitz to implement the remedies ordered in his original decision.
On Thursday, May 21, 2009, at 1:00 p.m, the oral argument for the Plaintiffs’ appeal and CIGNA’s cross appeal in the Second Circuit took place. The argument took place in the Ceremonial Courtroom on the 9th Floor of the Daniel Patrick Moynihan U.S. Courthouse, located at 500 Pearl Street, New York, NY 10007. A map and more detailed directions are on the Second Circuit's website at http://www.ca2.uscourts.gov/travel.htm.
On December 5, 2008, Plaintiffs filed a brief
in response to CIGNA’s
cross-appeal and in support of their appeal. CIGNA’s
reply brief was due on December 19, 2008.
Plaintiffs are appealing the District Court’s decision not to award
full relief for CIGNA’s failure to provide notice of benefit reductions
and CIGNA’s misleading statements that employees’ cash balance
benefits were going to be “comparable” or “larger” to
the prior plan’s benefits with no “cost savings” to CIGNA. Plaintiffs
are also appealing the District Court’s decision that CIGNA did not
have to notify former employees about the change in the “Rehire Rule” which
would place them in the cash balance plan upon returning to work at CIGNA.
Plaintiffs filed a Notice of Appeal from the District
Court’s judgment on July 7, 2008. On October 2, 2008, Plaintiffs
filed their Brief
of Plaintiffs-Appellants with
the United States Court of Appeals for the Second Circuit. CIGNA
filed a Notice of Cross-Appeal on July 14, 2008 and filed its brief on November 3, 2008.
To read pdf links you may click to download
Adobe Reader, which reads pdf files.)
On October 14, 2008, AARP and the National Employment
Lawyers Association filed an amici curiae (“friends of the Court”)
brief on behalf of the Plaintiffs, asking the Court to provide full relief
to the Plaintiffs. Read their brief here.
On June 13, 2008, Judge Kravitz issued a decision ordering CIGNA to remedy
its failure to disclose “wear-aways” to employees by providing
the full value of the old benefits plus the value of their cash balance benefits.
But the Court declined to provide full relief for all of CIGNA’s misrepresentations,
including CIGNA’s failure to warn employees about significant benefit
reductions from the cash balance plan and CIGNA’s misleading representations
that the cash balance benefits were going to be “comparable” or “larger” to
the old plan with no “cost savings” for CIGNA. The Judge
stayed implementation of the relief that he ordered pending the parties’ appeals
to the Second Circuit. Read Judge
Kravitz’s 50-page decision. You can also read a BNA
Pension and Benefits Daily article about the ruling.
The trial in this case took place on September 11-15, 2006 and January 24-25,
2007 in New Haven, CT, before Judge Mark Kravitz. On February 15, 2008,
the Court ruled that CIGNA misled plan participants by failing to provide
the information they needed to understand the conversion from a traditional
defined benefit plan to a cash balance plan and its effect on their retirement
benefits.” Read the article about the decision featured in the Hartford
Courant on February 20, 2008. Read key quotes
from the Court’s decision about CIGNA’s misleading communications.
You can also read Judge
Kravitz’s 122-page decision.
On June 5, 2006, the Plaintiffs filed proposed findings of fact, conclusions
of law, and a trial brief for the bench trial (see above). The Proposed
Findings of Fact are attached as a pdf file (please note that this document
is 111 pages).
See the Third Amended Complaint
for Relief adding two additional named plaintiffs filed on February
17, 2006 (pdf). And see the expert
actuarial report of Claude Poulin, FSA (pdf).
See the November 10, 2004 Appeals
Court ruling (pdf) on Cigna's change to
an older employee's pension through the cash balance amendments and the Wall
Street Journal article of November 12, 2004 (pdf) about
The CIGNA lawsuit was certified as a class action in
December, 2002. The court denied
CIGNA's motion to decertify the class (pdf) in
Do you qualify as a member of the class
in this lawsuit? See below.
The CIGNA class action centers on the conversion of the CIGNA pension plan,
which significantly reduced the value of benefits for long term older workers.
In the lawsuit, the plaintiffs argue that the pension plan conversion is
inconsistent with ERISA requirements and disclosure rules.
The class definition as adopted by the U.S. District Court includes "any
and all persons who:
1. Are former and current CIGNA employees;
2. Participated in the CIGNA Pension Plan before January 1, 1998; and
3. Have participated in the CIGNA "Part B" pension plan at any
time since January 1, 1998."
Attorneys handling the class action are:
- Stephen R. Bruce, Washington, D.C., lead counsel
- Thomas Moukawsher, Groton, CN