These Section 502(c) penalty claims seem to be added to most every ERISA lawsuit…

Does a claimant have to prove “actual injury” to win ERISA Section 502(c) penalty claims? MAYBE.  Here’s why:

As you know, if a plan administrator fails to provide plan-related documents within 30 days of a written request, then ERISA section 502(c) gives the district court discretion to impose up to $110 per day per failure.

Tom Cristina at Ogletree makes a good point that the recent Supreme Court decision in Spokeo, Inc. v. Robins, No. 13–1339 (May 16, 2016) may create a basis to assert that Plaintiffs have to prove “actual injury” to recover Section 502(c) penalty claims. Spokeo was a Fair Credit Reporting Act (FCRA) case. But the FCRA has a statutory penalties provision much like ERISA section 502(c).  http://www.jdsupra.com/legalnews/spokeo-new-hope-for-defending-against-77037/

Cristina writes: “[I]n a passage that has implications for the defense of certain ERISA actions, the Court held that there is a constitutional limitation on Congress’s ability to identify actionable intangible injuries:

Congress’ role in identifying and elevating intangible harms does not mean that a plaintiff automatically satisfies the injury-in-fact requirement whenever a statute grants a person a statutory right and purports to authorize that person to sue to vindicate that right. Article III standing requires a concrete injury even in the context of a statutory violation. For that reason, Robins could not, for example, allege a bare procedural violation, divorced from any concrete harm, and satisfy the injury-in-fact requirement of Article III.

(Emphasis added.) …

“Thus, the Spokeo opinion at least raises the question whether, despite the language of ERISA section 502(a)(1)(A) authorizing such a lawsuit, a plaintiff might lack standing to seek the penalty under ERISA section 502(c) if the plaintiff fails to allege and prove a “concrete” injury-in-fact other than and in addition to nonreceipt of the requested documents.”

Key Take Away:  Preserve the argument, citing Spokeo, that Plaintiff lacks standing to assert the 502(c) penalty claim when Plaintiff has failed to show “actual injury.”

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Photo of Mike Reilly Mike Reilly

Mike Reilly is a nationally recognized labor, employment and employee benefits attorney, named one of the “Top 100 Most Powerful Employment Attorneys in the Nation” for the past five consecutive years by Human Resource Executive®. He has decades of experience providing strategic employment…

Mike Reilly is a nationally recognized labor, employment and employee benefits attorney, named one of the “Top 100 Most Powerful Employment Attorneys in the Nation” for the past five consecutive years by Human Resource Executive®. He has decades of experience providing strategic employment advice, and has represented clients in more than 75 jury trials, arbitrations, bench trials and claims before the EEOC and Washington State Human Rights Commission.

Small and large employers retain Mike for his strategic advice and decades of experience in employment issues and litigation, business decisions and litigation avoidance. Mike provides advice in claims involving discrimination, retaliation, wrongful discharge, disability accommodation, ERISA and non-ERISA employee benefit claims, and wage/hour claims. He served as lead counsel in an employee raiding/trade secret case as reported in the Wall Street Journal, and defends employers in class action claims.

Mike’s remarks on employment issues have been quoted in NewsweekCorporate Legal TimesSeattle TimesEmployee Relations Law JournalPuget Sound Business JournalCFO.com, and other professional journals and management publications. Chambers USA’s Guide to America’s Leading Lawyers for Businessrates Mike in the top ranking (band one) for his work in labor and employment law, and has described him as “one of Seattle’s top-rate attorneys” who is “truly phenomenal [with] superb legal instincts” and “an amazingly assertive litigator.” His clients include Nordstrom, Seattle Seahawks, Home Depot, KeyBank, Starbucks, Fred Hutchinson Cancer Research Center, Red Robin and Seattle Chamber of Commerce, among others.