## Facts

- Joel and Marlene Sereboff were beneficiaries of an ERISA-governed health plan administered by Mid Atlantic Medical Services, Inc. (Mid Atlantic), a plan fiduciary.
- The plan’s “Acts of Third Parties” provision required beneficiaries to reimburse Mid Atlantic for medical expenses it paid if the beneficiaries recovered from a responsible third party, without reduction based on incomplete recovery of claimed damages.
- The Sereboffs were injured in a California automobile accident, and the plan paid $74,869.37 in medical expenses.
- The Sereboffs filed a state-court tort action against third parties and later settled for $750,000.
- Mid Atlantic repeatedly asserted a lien on any recovery but the Sereboffs did not reimburse Mid Atlantic after settlement.
- Mid Atlantic sued in federal court under ERISA § 502(a)(3) to recover the medical expenses from the settlement proceeds.
- During the federal case, the Sereboffs agreed to preserve in an investment account an amount equal to Mid Atlantic’s claim pending resolution.

## Issues

1. Whether a plan fiduciary’s suit under ERISA § 502(a)(3) to enforce a plan reimbursement provision against a beneficiary’s tort-settlement proceeds seeks “appropriate equitable relief.”

## Decision

- The Supreme Court unanimously affirmed judgment for Mid Atlantic.
- The Court held that Mid Atlantic sought equitable relief because it pursued specifically identifiable settlement funds within the Sereboffs’ possession and control, consistent with an equitable lien by agreement.
- The Court distinguished prior precedent where the plaintiff sought to impose personal liability rather than recover a particular fund in the defendant’s possession.
- The Court rejected arguments that strict tracing rules barred recovery, explaining that such requirements do not apply in the same way to enforcement of an equitable lien created by agreement.
- The Court declined to apply subrogation-based defenses because Mid Atlantic’s claim was for reimbursement under a contractual lien, not subrogation against tortfeasors.

## Legal Principles

- ERISA § 502(a)(3) authorizes only relief that is “typically available in equity,” including enforcement of an equitable lien on identifiable property rather than compensatory damages or general personal liability.
- A plan term that (i) identifies a distinct fund (e.g., third-party recoveries) and (ii) specifies the portion owed (e.g., amounts paid by the plan) can create an equitable lien by agreement enforceable as equitable relief.
- A fiduciary may obtain reimbursement under § 502(a)(3) from specifically identifiable settlement proceeds in the beneficiary’s possession or control.
- For an equitable lien by agreement, the fund need not exist when the agreement is made; the lien attaches when the fund comes into existence and becomes identifiable.
- Subrogation doctrines and related defenses do not control where the plan seeks direct reimbursement pursuant to an equitable lien by agreement.

## Conclusion

The Court held that an ERISA fiduciary may enforce a plan reimbursement provision through § 502(a)(3) as equitable relief when it seeks recovery from specifically identifiable settlement proceeds within the beneficiary’s control under an equitable lien created by the plan’s terms.


Sereboff v. Mid Atl. Med. Servs., Inc., 547 U.S. 356 (2006)