## Facts

- Janette Knudson, covered by her husband’s employer ERISA health plan, was severely injured in a 1992 car accident.
- The plan paid $411,157.11 in medical expenses; most payments were made by Great-West under a stop-loss arrangement.
- The plan contained a reimbursement clause granting a “first lien” on any third-party recovery for benefits paid, and stated the beneficiary would be personally liable up to the lien amount if she failed to reimburse.
- The plan assigned to Great-West the plan’s rights to pursue reimbursement claims.
- The Knudsons sued alleged tortfeasors in California state court and settled for $650,000; most funds were allocated to attorney’s fees and a Special Needs Trust for Janette’s future care.
- The settlement earmarked $13,828.70 as attributable to past medical expenses and contemplated payment of that amount to Great-West.
- Great-West rejected the $13,828.70 and sued in federal court under ERISA § 502(a)(3), seeking $411,157.11 from the Knudsons based on the reimbursement provision.

## Issues

1. Whether a plan (or its assignee) may sue under ERISA § 502(a)(3) to enforce a reimbursement provision by imposing personal liability on a beneficiary for money the plan paid.
2. Whether such a reimbursement claim is “other appropriate equitable relief” when the plaintiff seeks a money judgment rather than recovery of specific, identifiable funds in the defendant’s possession.

## Decision

- The Supreme Court affirmed the Ninth Circuit in a 5–4 decision authored by Justice Scalia.
- The Court held that Great-West’s requested remedy was legal, not equitable, because it sought to impose personal liability for a contractual obligation to pay money.
- The Court concluded that ERISA § 502(a)(3) did not authorize the action as pleaded because the claim did not seek particular, identifiable funds in the Knudsons’ possession subject to an equitable lien or constructive trust.

## Legal Principles

- ERISA § 502(a)(3) authorizes only relief that was typically available in equity, not classic legal remedies such as compensatory damages or general money judgments.
- Restitution is equitable only when it seeks specific funds or property in the defendant’s possession and is enforceable through equitable devices (e.g., constructive trust or equitable lien).
- A claim that seeks to compel payment of money due under a contract, or to impose general personal liability for money owed, is legal relief even if styled as restitution or specific enforcement.
- Courts may not expand ERISA’s “carefully crafted and detailed” enforcement scheme beyond the statute’s textual limits based on policy considerations.

## Conclusion

The Court held that ERISA § 502(a)(3) does not allow a plan fiduciary or assignee to enforce a reimbursement clause by obtaining a personal money judgment against a beneficiary when the suit does not target specific, identifiable funds in the beneficiary’s possession; such relief is legal, not “appropriate equitable relief.”


Great-West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204 (2002)