Salisbury v. The Prudential Life Insurance Company of America

Filing 30

MEMORANDUM AND ORDER. For the reasons above, Prudential's motion to strike Salisbury's jury demand is granted. SO ORDERED. Granting 16 Motion to Strike Jury Demand. (Signed by Judge Alison J. Nathan on 7/11/2016) (rjm)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

USDC SDNY
DOCUl\1ENT
ELl:,CTRONICALLY FILED
DOC#: _ _ _ _ _ __
DATE FILED:..JUL 1' 1 2016

Katherine Salisbury,
Plaintiff,
15-cv-9799 (AJN)

-vPrudential Insurance Company of America,

MEMORANDUM &
ORDER

Defendant.

ALISON J. NA THAN, District Judge:
Plaintiff Katherine Salisbury filed this action against Prudential Insurance Company of
America ("Prudential") under the Employee Retirement Income Security Act of 1974
("ERISA"), 29 U.S.C. § 1132(a)(l )(B). Salisbury claims that Prudential wrongly determined
that she was no longer eligible for long term disability benefits. Before the Court is Prudential's
motion to strike Salisbury's jury demand. For the reasons below, that motion is granted.

I.

Background
The following facts are taken from the Complaint. Since 2007, Salisbury has been a

beneficiary of a group long-term disability insurance policy through her then-employer, the
Jefferies Group. Salisbury alleges that she became disabled within the meaning of the policy on
May 16, 2008, and remains so to this day. On March 23, 2015, Prudential determined that she
was no longer eligible for long-term disability benefits under the policy. Salisbury filed an
appeal with the plan administrator, which remains pending.
On December 16, 2015, Salisbury filed this suit under 29 U.S.C. § 1132(a)(l)(B). Salisbury
seeks to recover past benefits owed, along with a declaratory judgment that (1) she is disabled
within the meaning of the insurance policy, and (2) that Prudential must continue to make

payments to her as long as she remains totally disabled. Additionally, she seeks attorneys' fees
and costs.
II.

Discussion

Salisbury argues that she is entitled to a jury trial under the Seventh Amendment because
her suit to recover insurance benefits is legal in nature. The Seventh Amendment guarantees a
jury trial in civil cases for legal suits but not for equitable ones. Pereira v. Farace, 413 F.3d 330,
337 (2d Cir. 2005). To determine whether a suit is legal or equitable, courts must (1) "ask
whether the action would have been deemed legal or equitable in 18th century England"; (2)
"examine the remedy sought and determine whether it is legal or equitable in nature"; and then
(3) "balance the two, giving greater weight to the latter." Id. (internal quotation marks omitted).
Salisbury asks the Court to apply this test to her action under Section 1132(a)(l)(B), and
conclude that it is legal in nature on the grounds that it is analogous to a breach of contract suit
for damages. See id. at 379. However, the Court is bound by Second Circuit precedent holding
that suits to recover benefits under Section 1132(a)(l)(B) are equitable in nature.
The Second Circuit has determined that "there is no right to a jury trial in a suit brought
to recover ERISA benefits." Sullivan v. LTV Aerospace & Def Co., 82 F.3d 1251, 1258 (2d Cir.
1996) (discussing Section 1132(a)(l )(B)), abrogated on other grounds, McCauley v. First Unum
Life Ins. Co., 551F.3d126 (2d Cir. 2008); see also Tischmann v. ITT/Sheraton Corp., 145 F.3d
561, 568 (2d Cir. 1998) (same). The ERISA statute does not provide for a jury trial. Sullivan, 82
F.3d at 1258. And the Seventh Amendment's jury right does not apply, since "cases involving
ERIS A benefits are inherently equitable in nature, not contractual." DeFelice v. Am. Int 'l Life
Assur. Co. ofN.Y, 112F.3d61,64(2dCir.1997)(discussingSection 1132(a)(l)(B)). The
reason why suits to recover ERISA benefits are equitable is that in most such suits-including
this one-"only an order for continuing benefits would be sufficient" to provide relief. Blake v.
Unionmutual Stock L(fe Ins. Co. ofAm., 906 F.2d 1525, 1526 (11th Cir. 1990). The Eleventh
Circuit held in Blake that the ongoing nature ofrelief available under Section l 132(a)(l)(B)
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makes it a "traditionally equitable" remedy. Id. Adopting Blake, the Second Circuit explained
that Section l 132(a)(l)(B) is best understood as a providing not a contract-like legal remedy, but
rather a "trust-like" equitable remedy that "renders a claim [under the provision] equitable."
DeFelice, 112 F.3d at 64 (citing Blake, 906 F.2d at 1526).

Salisbury argues that Sullivan, DeFelice, and similar cases are no longer good law in the
wake of the Supreme Court's decision in Great-West L(fe & Annuity Ins. Co. v. Knudson, 534
U.S. 204 (2002). However, the Second Circuit has continued to maintain that no jury right is
available in actions to recover ERIS A benefits over the decade and a half since Great West.
0 'Hara v. Nat'! Union Fire Ins. Co. of Pittsburgh, 642 F.3d 110, 116 (2d Cir. 2011) ("[T]here is

no right to a jury trial in a suit brought to recover ERIS A benefits[.]"); Muller v. First Unum Life
Ins. Co., 341F.3d119, 124 (2d Cir. 2003) ("[T]here is no right to ajury trial under ERISA[.]");
see Peck v. Aetna Life Ins. Co., No. CIV.A.3:04-CV1139JCH, 2005 WL 1683491, at *4 (D.

Conn. July 19, 2005) (rejecting argument that Great-West justifies departing from Second Circuit
precedent); see also, e.g., Murphy v. First Unum Life Ins. Co., No. 15-CV-820 (SJF)(SIL), 2016
WL 526243, at *4 (E.D.N.Y. Feb. 9, 2016) (striking jury demand in suit to recover ERISA
benefits); Chau v. Hartford Life Ins. Co., No. 1:14-CV-8484-GHW, 2016 WL 844831, at *7
(S.D.N.Y. Mar. 1, 2016) (same).
Moreover, Great-West is not relevant to this case. Great-West concerned a suit filed by
an ERISA insurer seeking to enforce a contractual provision requiring a beneficiary to turn over
money acquired from a third-party tortfeasor. 534 U.S. at 207-08. The Supreme Court held that
the insurer's claim for restitution was not "equitable relief' within the meaning of 29 U.S.C.
§ l l 32(a)(3). The Supreme Court explained that restitution is only equitable when the plaintiff
seeks the return of specific, identifiable funds or property that the plaintiff previously owned. Id.
at 213. If the plaintiff simply seeks to recover "money to pay for some benefit the defendant had
received from him," then the action is a legal one that sounds in contract or quasi-contract. Id.
Great-West concerns a different part of ERISA than the one at issue in this case. More

importantly, Great-West concerns when restitution is an equitable remedy. Salisbury is not
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seeking restitution of money she has given to Prudential (i.e., the return of her premiums).
Instead, she is seeking to compel the payment of disability benefits. Nothing in Great-West
purports to change the analysis in Blake and DeFelice concluding that suits under Section
l 132(a)(l)(B) are equitable in nature. The Comi therefore must follow the Second Circuit's
long-standing rule that there is no right to a jury trial in a suit to recover ERISA benefits under
29 U.S.C. § 1132(a)(l)(B).

III.

Conclusion
For the reasons above, Prudential's motion to strike Salisbury's jury demand is granted.
SO ORDERED.

Dated: July \\ , 2016
New York, New York

United States District Judge

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