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).

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.”