1995 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

6-28-1995

In Re: Unisys Corp (Mem Op)

Precedential or Non-Precedential:

Docket 94-1875

Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_1995

This decision is brought to you for free and open access by the Opinions of the United States Court of Appeals for the Third Circuit at Villanova

University School of Law Digital Repository. It has been accepted for inclusion in 1995 Decisions by an authorized administrator of Villanova

University School of Law Digital Repository. For more information, please contact Benjamin.Carlson@law.villanova.edu.

Recommended Citation

"In Re: Unisys Corp (Mem Op)" (1995). 1995 Decisions. Paper 176.

http://digitalcommons.law.villanova.edu/thirdcircuit_1995/176
 UNITED STATES COURT OF APPEALS 

 FOR THE THIRD CIRCUIT 

 ___________ 

 No. 94-1875 

 ___________ 

 IN RE: UNISYS CORP. RETIREE 

 MEDICAL BENEFIT "ERISA" LITIGATION 

 Unisys Corporation, 

 Appellant 

 ___________ 

 Appeal from the United States District Court 

 for the Eastern District of Pennsylvania 

 (D.C. Civil No. MDL 969) 

 ___________ 

 

Argued 

 May 4, 1995 

 Before: MANSMANN, SCIRICA and McKEE, Circuit Judges. 

 (Filed June 28, l995) 

 ___________ 

Alan M. Sandals, Esquire 

Berger & Montague 

1622 Locust Street 

Philadelphia, PA 19103 

 

Joseph R. Roda, Esquire 

36 East King Street 

301 Cipher Building 

Lancaster, PA 17602 

J. Dennis Faucher, Esquire 

Miller, Faucher, Chertow, 

Cafferty & Wexler 

One Penn Square West 

Suite 1801 

Philadelphia, PA 19102 

Seymour J. Mansfield, Esquire 

Mansfield & Tanick 

900 Second Avenue South 

Suite 1560 

Minneapolis, MN 55402 

Sarah E. Siskind, Esquire (Argued) 

Davis, Miner, Barnhill & Galland 

44 East Mifflin Street 

Suit 803 

Madison, WI 53703 

 Counsel for Appellees 

 Gerald E. Pickering, Fred Tonnies, 

 William Leonhardt, Evelyn Schmidt, 

 Dudley Keyes, David Kahl, Paul Wright, 

 Robert Wilt, Clay Bernichon, Edward Valle, 

 Robert B. Welsh, Solveig Tschann, 

 Ludson F. Worsham, Edwin Marjala, 

 Warren J. Hall, individually and on behalf of 

 all members of the Sperry Class previously 

 certified by the Court whose claims have not been 

 settled 

James F. Roegge, Esquire 

Julie L. Levi, Esquire 

Meagher & Geer 

33 South Sixth Street 

4200 Multifoods Tower 

Minneapolis, MN 55402 

 Counsel for Appellees 

 Gerald E. Pickering, Fred Tonnies, 

 William Leonhardt, Evelyn Schmidt, 

 Dudley Keyes, David Kahl, Paul Wright, 

 Robert Wilt, Clay Bernichon, Edward Valle, 

 Robert B. Welsh, Solveig Tschann, 

 Bernard J. Jansen, Donald I. Klippenstein, 

 Frederick W. Hoppe 

Joseph J. Costello, Esquire 

Francis M. Milone, Esquire (Argued) 

Morgan, Lewis & Bockius 

2000 One Logan Square 

Philadelphia, PA 19103 

Joseph A. Teklits 

UNISYS Corporation 

P.O. Box 500 

M.S. C2NW 14 

Blue Bell, PA 19424 

 Counsel for Appellant 

 ___________ 

 OPINION OF THE COURT 
 __________ 

MANSMANN, Circuit Judge. 

 We are asked to decide whether a claim for breach of 

fiduciary duty may be maintained under section 502(a)(3)(B) of 

ERISA, 29 U.S.C. § 1132(a)(3)(B), where, despite reservation 

clauses that the company retained the right to terminate the 

plans "at any time" and for "any reason," summary plan 

descriptions informed retired employees that the duration of 

their retiree medical benefits was for life, and company 

representatives misinformed employees that once they retired, 

their medical benefits would "be continued for the rest of your 

life." Because we hold that a breach of fiduciary claim may be 

maintained under these circumstances, we must also decide whether 

equitable relief is available under ERISA to individual plan 

participants. We hold that, assuming a breach of fiduciary duty 

can be proven, equitable relief is available to individual plan 

participants pursuant to 29 U.S.C. § 1132(a)(3)(B). 

I. 

 This class action, filed on behalf of former employees 

of Sperry Corporation, arises out of the termination of postretirement medical plans, sponsored by Unisys for retirees and 

disabled former employees of Unisys and its corporate 

predecessors, Sperry Corporation and Burroughs Corporation. The 

retirees sought to recover post-retirement medical benefits under 
the terms of their benefit plans and under ERISA's provisions for 

appropriate equitable relief. 

 In September of 1986, Sperry Corporation and Burroughs 

Corporation merged to form Unisys Corporation. Prior to the 

merger, Sperry consisted of a number of business units or 

divisions. Until 1984 each Sperry division maintained its own 

medical benefits program, with each described in a separate 

summary plan description. In 1984, in an attempt to streamline 

the medical benefits plans and in response to rising medical 

costs, Sperry implemented Medflex, a corporate-wide medical 

benefits plan that applied to the entire Sperry Corporation.14 

Medflex was applied to future retirees only; existing retirees 

continued to receive coverage under the pre-Medflex plans which 

applied when they retired. 

 Following the merger in 1986, Unisys continued the 

Medflex plan for active employees and those who retired after its 

implementation but prior to April 2, 1989. Unisys also continued 

all of the pre-Medflex plans for those who retired prior to 

Medflex's implementation. In 1989, Unisys effected the 

consolidation of its retiree medical benefit plans when it 

created the Unisys Post-Retirement and Extended Disability 

Medical Plan to cover all employees who retired after April 1, 

1989, most of whom were former Sperry and Burroughs employees. 

 

14. Medflex applied to all Sperry business units by January 

1, 1984, with the exception of one sub-group of the Sperry 

Division, which commenced participation in Medflex on January 1, 

1985. 
 On November 3, 1992, Unisys publicly announced that 

effective January 1, 1993, it was terminating all existing 

medical benefit plans and replacing all of the pre-existing 

medical plans with the new Unisys Post-Retirement and Extended 

Medical Disability Plan. Under the new plan, retirees would be 

responsible for increasing levels of contributions until January 

1, 1995, when they would have to pay the full cost of their 

premiums. Thus, the new plan sharply contrasted with earlier 

plans, under the majority of which Unisys paid the entire premium 

for an individual's life and provided benefits for the 

individual's spouse as well.15 

 

15. Unisys' decision to terminate the benefit plans under 

which it had provided coverage and to replace those plans with 

the new Unisys Post-Retirement and Extended Disability Medical 

Plan was challenged in nine separate actions which the Judicial 

Panel on Multidistrict Litigation transferred to the Eastern 

District of Pennsylvania and consolidated for disposition. On 

June 9, 1993, after determining that Unisys "acted on grounds 

generally applicable to the class," the district court certified 

the case as a class action pursuant to Fed. R. Civ. P. 23(b)(2). 

The class consists of approximately 21,000 former non-union 

employees of Sperry, Burroughs and Unisys. The court certified 

three distinct classes: Unisys retirees, Sperry retirees or 

Burroughs retirees and the claims of each class were adjudicated 

separately. Further, the retirees asserted two sets of claims: 

general claims on behalf of all retirees, and separate claims on 

behalf of "early" retirees who retired under various early 

retirement incentive programs offered by the company throughout 

the 1980s. 

 This appeal concerns some of the claims of the Sperry 

regular retirees, and the claims of a sub-group of Sperry early 

retirees. The appeals docketed at Nos. 94-1800, 94-1801, 94-1912 

and 94-2216 concern the claims of the Unisys and Burroughs 

retirees, as well as the remaining claims of the Sperry retirees. 

In appeal No. 94-1800 the Sperry regular retirees and certain 

early retirees have appealed from an adverse judgment rendered 

after trial on their claims for breach of contract and estoppel. 

The claims of the Burroughs early retirees and many of the claims 
 The appellees in this appeal are former employees of 

Sperry corporation (and their eligible dependents) who retired 

between 1969 and April 1, 1989, from Sperry Corporation or 

Unisys, Sperry's successor. Following Unisys' termination of 

their post-retirement medical benefit plans in late 1992, the 

retirees sought relief based on three theories: breach of 

contract, equitable estoppel, and breach of fiduciary duty. The 

Sperry retirees argued that Unisys' termination of their 

respective medical plans violated ERISA. They argued first that 

Unisys had denied them "vested" benefits in violation of 29 

U.S.C. § 1132(a)(1)(B) because the summary plan descriptions 

("SPDs") explaining their medical benefits contained the term 

"lifetime" benefits. Regarding their contract claims, the 

retirees relied on the explicit lifetime language in the plans, 

e.g., "when you retire, your medical benefit will be continued 

(..continued) 

of the Sperry early retirees were settled pursuant to a partial 

settlement agreement between Unisys and these retirees. In 

appeal No. 94-1801 the Unisys early retirees have appealed from 

an adverse judgment rendered after trial on their claims for 

breach of contract, breach of fiduciary duty and estoppel. In 

appeal No. 94-1912 the Burroughs and Unisys regular retirees have 

appealed from the district court's grant of summary judgment in 

favor of Unisys on their breach of contract and estoppel claims. 

In appeal No. 94-2166, a sub-group of Sperry retirees attempted 

to challenge the partial settlement between Unisys and the Sperry 

and Burroughs early retirees which did not include them. On 

October 3, 1994, we granted the parties' joint motion to 

consolidate appeals Nos. 94-1800, 94-1801, 94-1875 and 94-1912 

for purposes of filing a single joint appendix and for 

disposition. All of these appeals have now been resolved, either 

by our decisions in published opinions, see Nos. 94-1800 and 94-

1875, or by memorandum opinions rendered in Nos. 94-1801, 94-1912 

and 94-2216. 
for the rest of your life," and on statements to the same effect 

made by the company both orally and in writing. 

 The Medflex SPD is illustrative. A Sperry employee who 

retired during the period January 1, 1984, through April 1, 1989, 

received medical benefits under this plan. The SPD for medical 

benefits is set forth in a booklet titled, "Your Company and 

You." Included in this plan was the following description of 

retiree medical benefit coverage: 

 If you're eligible, Medical Plan benefits 

continue without cost after you terminate 

active employment. Benefits also may 

continue on a contributory basis for your 

eligible dependents who are covered when your 

employment terminated. . . . Coverage 

continues for you for life and for your 

dependents while they remain eligible 

provided you don't stop the contributions for 

their coverage. After your death, your 

eligible dependents may continue coverage by 

making the require contributions. Their 

coverage continues until your spouse dies or 

remarries. 

(A 2227)(emphasis added). Second, the retirees argued that even 

if Unisys had the legal right to terminate the plans (pursuant to 

the reservation of rights clause located in other sections of the 

plans), Unisys had breached its fiduciary duty by affirmatively 

misleading plan participants regarding the duration of their 

retiree medical benefits. Lastly, the retirees asserted claims 

based on equitable estoppel.16 

 

16. The Sperry retirees' contract and estoppel claims are 

not implicated in this appeal. They are the subject of an appeal 

docketed at 94-1800. 
 Unisys' response to these arguments was that it had 

reserved the right to terminate the retirees' medical plans due 

to a "reservation of rights clause" or "ROR" located in another 

section of the plan. Typical of these clauses is the one set 

forth in the SPD describing the Medflex plan. The Medflex SPD 

booklet, "Your Company and You," was distributed to all employees 

and contained the following reservation of rights clause: 

 Plan Continuation 

 The Company expects to continue the Plans, 

but reserves the right to change or end them 

at any time. The Company's decision to 

change or end the Plan may be due to changes 

in federal or state laws governing welfare or 

retirement benefits, the requirements of the 

IRS or ERISA, the provisions of a contract or 

policy involving an insurance company or any 

other reason . . . . 

(A 2750) (emphasis added). 

 In addition to the provisions set forth in the SPDs, 

information about retiree medical benefits was also conveyed to 

the Sperry retirees through various informal oral and written 

communications. As in the SPDs, the duration of medical benefits 

was described as being "for life" or for the "lifetime" of the 

retiree and his or her spouse. Sperry did not include in these 

informal communications a reference to the reservation of rights 

clause. 

 Notwithstanding these communications, Unisys denied 

having created vested medical benefits through its use of the 

word "lifetime," and early in this litigation filed a motion for 

summary judgment seeking dismissal of all of the regular 
retirees' claims based on the unambiguous reservation of rights 

clauses in the plans.17 On October 13, 1993, the district court 

granted summary judgment in favor of Unisys on the Sperry 

retirees' claim that Unisys had breached its fiduciary duties. 

In re Unisys, 837 F. Supp. at 670, 679-80 (E.D. Pa. 1993). 

 At the trial conducted on their contract claim, the 

Sperry retirees moved for reconsideration of their breach of 

fiduciary duty claim in light of our decision, rendered during 

trial, in Bixler v. Central Pa. Teamsters Health and Welfare 

Fund, in which we held that a direct action for breach of 

fiduciary duty is available under section 1132(a)(3)(B).18 

Bixler, 12 F.3d 1292 (3d Cir. 1994). The retirees argued that 

"even if the reservation of rights clause in the SPDs were 

intended to apply to existing retirees [as opposed to active 

employees], Sperry and later Unisys, had a fiduciary duty to make 

this point clear." (A 2284). The district court observed: 

 

17. Although the district court granted Unisys' motion on 

the retirees' breach of fiduciary duty and estoppel claims, it 

denied summary judgment on the retirees' contract claim. The 

district court found that the internal inconsistency between the 

lifetime promises and the RORs made the Sperry plans ambiguous 

and that under Mellon Bank N.A. v. Aetna Business Credit, 619 

F.2d 1001 (3d Cir. 1980), a trial on the extrinsic evidence was 

necessary to resolve the ambiguity. In re Unisys, 837 F. Supp. 

at 679. After trial, the district court reversed its position on 

both the contract and breach of fiduciary duty claims, entering 

judgment against the Sperry retirees on the contract claim and 

reversing its earlier dismissal of the breach of fiduciary duty 

claim. 

18. The district court opined that the Sperry retirees had 

presumably brought their breach of fiduciary duty claim pursuant 

to the "other equitable relief" clause in 29 U.S.C. § 

1132(a)(3)(B). 
 This is not a case where one or two low level 

benefits counselors told a few retirees that 

their benefits would continue for life. The 

message that medical benefits would last for 

life was confirmed repeatedly and 

systematically throughout the Sperry 

organization, by all levels of management, in 

writing and verbally. In fact, as the 

Findings make clear, several high level 

corporate executives, as well as personnel 

managers, testified that they believed the 

[reservation of rights clause] was 

inapplicable to retirees and counseled 

individuals accordingly. 

(A 2284). Although the district court also observed that the 

summary plan description is the controlling document upon which 

plan participants must rely and that informal communications 

cannot alter the terms of a written plan, the court discerned "a 

strong current in the Third Circuit that recognizes that an ERISA 

fiduciary may not `affirmatively mislead' plan participants." 

Id. (citing Bixler, 12 F.3d 1292, and Fischer v. Phila. Elec. 

Co., 994 F.2d 130 (3d Cir.), cert. denied, 114 S. Ct. 622 

(1993)). 

 Unisys argued that Bixler, supra, and Fischer, supra, 

were inapposite in a situation where the summary plan description 

itself informs the participants of the answer to their inquiry 

regarding benefits. After reviewing Fischer and Bixler, the 

district court concluded that the evidence supported a breach of 

fiduciary duty claim. The court stated, "First, it is clear that 

the highest levels of corporate management at Sperry, and later 

Unisys, recognized that employees might be under the mistaken 
belief that `lifetime' meant forever."19 The evidence suggested 

to the court that "by the mid-1980's, defendant understood the 

potential for confusion concerning the meaning of `lifetime 

benefits.'" The court further observed that the "Defendant then 

exacerbated this potential [for confusion] with numerous informal 

communications that discussed lifetime benefits without explicit 

reference to the [reservation of rights clause]."20 (A 2289). 

 

19. The court found that this was evidenced in part by a 

confidential letter in which John Loughlin, who was then staff 

Vice President, Employees Benefits for Sperry, wrote: 

 It is important to determine the implied promise that 

has been made regarding post-retirement medical 

benefits. Recent court cases have impaired the 

employer's ability to reduce these benefits after 

retirement. The Company should consider how the 

promise can be limited so as to control the impact on 

Company costs of future medical inflation and Federal 

cost-shifting. 

(A 2288). The second letter upon which the district court relied 

was a confidential 1988 memorandum from J.A. Blain, then VicePresident of Human Resources for Unisys, to W.M. Blumenthal, then 

CEO of Unisys, which cautioned: 

 Although we have not suggested to either active 

employees or current retirees that we may consider 

changes in Post Retirement Medical for those already 

retired, we feel our analysis would be incomplete if we 

did not address possible changes to the Post-Retirement 

Medical Plans of our 16,000 current retirees. . . . 

Many retirees will undoubtedly suggest that when they 

retired, they felt that their medical program would 

continue without changes. . . . 

(A 2288). 

20. The district court found that "Unisys could have easily 

put an explicit [reservation of rights clause] in each informal 

communication given to employees rather than only use the 

lifetime language; also, when employees made specific inquiries 

to benefit counselors during exit interviews and at group 

retirement sessions, the company could have instructed the 
 The court found that the retirees had presented 

credible testimony that some individuals specifically asked if 

their benefits would continue for life and were told they would, 

without any mention of the reservation of rights clause. (A 

2290). When faced with a specific inquiry as to the explanation 

of benefits, the district court held that "an employer cannot 

give vague or incorrect answers, especially on a repeated and 

pervasive basis." Id. Because the breach of fiduciary duty 

claim was not directly before the court at trial, it did not hold 

that a breach in fact occurred. In granting reconsideration of 

this issue though, the district court concluded that "based on 

the evidence and the law in this circuit, it seems possible that 

at least some plaintiffs will be able to sustain a breach of 

fiduciary duty claim."21 (A 2291). Given the complexity of the 

legal question involved and its uncertainty of the contours of 

Bixler, the district court certified its decision for 

interlocutory appeal pursuant to 28 U.S.C. § 1292(b). On July 

22, 1994, Unisys filed a petition for permission to appeal 

(..continued) 

counselors to tell prospective employees that although the word 

`lifetime' is used, the company always reserves its right to 

terminate the plans." (A 2289-90). 

21. Because the court believed that some plaintiffs had 

stronger cases than others based on their specific inquiries and 

the information given to them personally, the court found that 

subclasses, and possibly even individual hearings, would be 

necessary to adjudicate the breach of fiduciary duty claims. The 

court did not express an opinion as to what damages would be 

recoverable and recognized that the parties would brief the issue 

at a later time. 
pursuant to 28 U.S.C. § 1292(b). We granted Unisys' petition on 

August 8, 1994.22 

II. 

 Section 404(a)(1) of ERISA provides that "a fiduciary 

shall discharge his duties with respect to a plan solely in the 

interest of the participants and beneficiaries . . . ." 29 

U.S.C. § 1104(a)(1).23 Recognizing this statutory obligation, we 

 

22. The district court certified for immediate appeal and 

we accepted the following controlling questions of law: 

 (a) May a breach of fiduciary duty 

claim be maintained under ERISA where: 

 (1) the applicable summary plan 

descriptions ("SPDs") informed class members 

that the duration of retiree medical benefits 

was for life, but reservation clauses in the 

SPDs stated that the company reserved the 

right to terminate the plans at any time and 

for any reason; and 

 (2) company representatives 

misinformed class members that once they 

retired, their medical benefits would 

continue for life, as detailed in the Court's 

Opinion of June 23, 1994? 

 (b) Assuming that a breach of fiduciary 

duty claim may be maintained under the above 

circumstances, is equitable relief available 

to individual participants under ERISA? 

23. ERISA broadly defines a fiduciary as any person who 

"exercises any discretionary authority or discretionary control 

respecting management of such plan . . . or has any discretionary 

authority in the responsibility in the administration of the 

plan." 29 U.S.C. § 1002(21)(A). 

 There is no question that both Sperry and later Unisys 

were acting as plan administrators, and thus were acting in a 

fiduciary capacity, when they made the material 
have held that in the exercise of these duties, the fiduciary 

"may not materially mislead those to whom the duties of loyalty 

and prudence . . . are owed." Fischer, 994 F.2d at 135; Bixler, 

12 F.3d at 1300; Curcio v. John Hancock Mutual Life Insurance 

Co., 33 F.3d 226, 238 (3d Cir. 1994). 

 In Fischer, we held that a plan administrator may not 

make affirmative material misrepresentations to plan participants 

about changes to employee benefit plans. Fischer involved 

employees who retired shortly before their employer offered an 

early retirement plan or "retirement sweetener." Although the 

company had announced that it might offer such a plan, when 

employees inquired about its availability, they were told by 

benefits counselors that "no plan was being considered." 

Fischer, 994 F.2d at 132. The benefit counselors were 

technically telling the truth, since they had not been informed 

by the corporation that a retirement sweetener was under serious 

(..continued) 

misrepresentations that support the claim for breach of fiduciary 

duty in this case. Our decisions firmly establish that when a 

plan administrator explains plan benefits to its employees, it 

acts in a fiduciary capacity. See, e.g., Genter v. ACME Scale 

and Supply Co., 776 F.2d 1180 (3d Cir. 1985) (holding that ACME 

Scale and Supply met the ERISA definition of fiduciary as an 

employer-administrator of the plan at issue); Fischer v. Phila. 

Elec. Co., 994 F.2d 130, 133 (3d Cir. 1993) (finding employer to 

have fiduciary status solely on the basis of its role as plan 

administrator under ERISA); Hozier v. Midwest Fasteners, Inc., 

908 F.2d 1155, 1158 (3d Cir. 1990) (holding that when employers 

serve as plan administrators, they assume the role of fiduciary 

under ERISA). When a corporate plan administrator speaks about 

benefits to its employees, the administrator acts in a fiduciary 

capacity even if he speaks about a non-fiduciary decision such as 

the business decision to terminate a welfare benefit plan. See

Hozier, supra. 
consideration. Nonetheless, we held that a material issue of 

fact existed as to whether the employer had breached its 

fiduciary duty to its employees by responding in a misleading 

fashion to their questions about the sweetener. Id. at 135. We 

held that, "Put simply, when a plan administrator speaks, it must 

speak truthfully." Id.

 We affirmed this principle in Bixler in holding that a 

plan administrator has an affirmative duty to "speak when it 

knows that silence might be harmful." There the widow of a plan 

participant contacted her husband's employer while the COBRA 

election period was still open, to ask whether there was a death 

benefit to which she was entitled. We held that: 

 If [the employer's agent] knew that Mr. 

Bixler's death left Mrs. Bixler with 

substantial unpaid medical expenses and that 

she could receive reimbursement for those 

expenses under the Drivers' plan by signing 

and returning the COBRA notice that [he] had 

sent to her husband, we believe the failure 

to advise her of the available benefits might 

be found to be a breach of fiduciary duty 

despite the fact that her inquiry was limited 

to the availability of a death benefit. 

12 F.3d at 1302. Although we did not decide whether a breach of 

fiduciary duty in fact occurred, we observed that the fiduciary's 

duty to inform "entails not only a negative duty not to 

misinform, but also an affirmative duty to inform when the 

trustee knows that silence might be harmful." Id. at 1300. 

Significantly, we held that the employer's failure to advise Mrs. 

Bixler regarding her COBRA rights could constitute a breach of 

its fiduciary duty even though the employer had previously 
provided the information in a written COBRA notice24 and even 

though the employer's omission in that case concerned facts about 

which Mrs. Bixler had not specifically inquired. 

 Similarly in Curcio v. John Hancock Mutual Life 

Insurance Co., 33 F.3d 226 (3d Cir. 1994), we held that an 

employer's misrepresentations regarding the existence of 

supplemental accidental death and dismemberment insurance, in 

representations made to employees during solicitations for 

enrollment in a new life insurance program which provided only 

for supplemental life insurance, established a breach of 

fiduciary claim. See also Smith v. Hartford Ins. Group, 6 F.3d 

131 (3d Cir. 1993) (employer's erroneous representations that 

Smith would receive some level of coverage under new plan gives 

rise to a breach of fiduciary duty claim under ERISA); Taylor v. 

Peoples Natural Gas Co., 49 F.3d 982 (3d Cir. 1995) (a plan 

administrator may be liable for the material misrepresentations 

made by individuals who have been selected as non-fiduciary 

agents by the plan administrator to assist it in its fiduciary 

obligation to administer a plan). 

 Unisys argues that the district court's decision in 

this case is based on an unwarranted extension of our holding in 

Bixler. Unisys points to the fact that Sperry and later Unisys 

 

24. Mrs. Bixler received the requisite notice that she had 

a right to elect "COBRA" contribution coverage at her own 

expense, but she did not do so, believing that the COBRA notice 

did not apply to her since her husband was already in the 

hospital and she mistakenly believed that this precluded him from 

being eligible for coverage. Bixler, 12 F.3d at 1302. 
unambiguously advised employees in summary plan descriptions that 

the company had reserved the right to terminate its retiree 

medical benefit plans. Thus, Unisys contends that Bixler did not 

address the principal issue in this appeal which Unisys frames as 

"whether an employer has a fiduciary duty to remind its employees 

of its right to modify or terminate a benefit plan when it 

already disclosed that information in an SPD." Appellants' brief 

at p. 19. We reject Unisys' characterization of the fiduciary 

duty involved as "one to remind" and of the cases upon which 

Unisys relies. 

 Under ERISA, fiduciaries have certain duties which 

include "the disclosure of specified information." Massachusetts 

Mutual Life Ins. Co. v. Russell, 473 U.S. 134, 142-45 (1985). A 

fiduciary's statutory disclosure obligations are set forth in 

ERISA, 29 U.S.C. §§ 1102, 1021 and 1022. Under 29 U.S.C. § 

1102(a)(1), "[e]very employee benefit plan shall be established 

and maintained pursuant to a written instrument . . . ." Under 

section 1022(a), "[a] summary plan description of employee 

benefit plan is to be furnished to plan participants" and the 

plan description "shall be sufficiently accurate and 

comprehensive to reasonably apprise such participants and 

beneficiaries of their rights and obligations under the plan." 

29 U.S.C. § 1022(a)(1). Further, ERISA requires that the summary 

plan description "explain the circumstances which may result in 

disqualification, ineligibility, or denial or loss of benefits," 

29 U.S.C. § 1022(b), "in a manner that is calculated to be 

understood by the average plan participant." 29 U.S.C. § 
1022(a)(1).25 A summary plan description "must not have the 

effect [of] misleading, misinforming or failing to inform 

 

25. § 1021. Duty of Disclosure and Reporting

 (a) Summary plan description and information to 

 participants and beneficiaries 

 The administrator of each employee benefit plan 

shall cause to be furnished in accordance with 

section 1024(b) of this title to each participant 

covered under the plan and to each beneficiary who 

is receiving benefits under the plan -- 

 

 (1) a summary plan description described 

in section 1022(a)(1) of this title; and 

 * * * * 

 § 1022. Plan Description and summary plan description

 (a)(1) A summary plan description of any employee 

benefit plan shall be furnished to participants 

and beneficiaries as provided in section 1024(b) 

of this title. The summary plan description shall 

include the information described in subsection 

(b) of this section, shall be written in a manner 

calculated to be understood by the average plan 

participant, and shall be sufficiently accurate 

and comprehensive to reasonably apprise such 

participants and beneficiaries of their rights and 

obligations under the plan. A summary of any 

material modification in terms of the plan and any 

change in the information required under 

subsection (b) of this section shall be written in 

a manner calculated to be understood by the 

average plan participant and shall be furnished in 

accordance with section 1024(b)(1) of this title. 

 * * * * 

 (b) The plan description and summary plan 

description shall contain the following 

information: The name and type of administration 

of the plan; the name and address of the person 

designated as agent for the service of legal 

process, if such person is not the administrator; 

the name and address of the administrator; names, 
participants and beneficiaries." 29 C.F.R. § 2520-102-2(b) 

(1987). 

 Unisys argues that we should reject the notion that 

Bixler can be interpreted as imposing a broad duty to inform 

"upon a fiduciary that has satisfied its statutory disclosure 

obligations." Unisys is correct that we have held that a 

fiduciary may satisfy its statutory disclosure obligations 

regarding the terms of a plan by distributing a summary plan 

description that complies with ERISA. See, e.g., Stahl v. Tony's 

Bldg. Materials Inc., 975 F.2d 1404 (9th Cir. 1989) (holding 

employee trust fund did not breach its fiduciary duty to a union 

member by failing to warn him individually that his pension 

benefits could be drastically reduced where the rule that applied 

was adequately explained in the summary plan description); Allen 

(..continued) 

titles, and addresses of any trustee or trustees 

(if they are persons different from the 

administrator); a description of the relevant 

provisions of any applicable collective bargaining 

agreement; the plan's requirements respecting 

eligibility for participation and benefits; a 

description of the provisions providing for 

nonforfeitable pension benefits; circumstances 

which may result in disqualification, 

ineligibility, or denial or loss of benefits; the 

source of financing of the plan and the identity 

of any organization through which benefits are 

provided; the date of the end of the plan year and 

whether the records of the plan are kept on a 

calendar, policy, or fiscal year basis; the 

procedures to be following in presenting claims 

for benefits under the plan and the remedies 

available under the plan for the redress of claims 

which are denied in whole or in part (including 

procedures required under section 1133 of this 

title). 
v. Atlantic Richfield Retirement Plan, 480 F. Supp. 848 (E.D. Pa. 

1979), aff'd, 633 F.2d 209 (3d Cir. 1980) ("Congress did not 

intend to impose a duty to provide the kind of individualized 

attention urged by plaintiff here, but rather envisioned that a 

fiduciary could discharge its obligations through the use of an 

explanatory booklet"); Schlomchik v. Retirement Plan of 

Amalgamated Ins. Fund, 502 F. Supp. 240 (E.D. Pa. 1980), aff'd, 

671 F.2d 496 (3d Cir. 1981) ("no duty on the part of defendants 

to provide this particular employee with individualized attention 

. . . ."); Schiffer v. Equitable Assurance Sec. of the U.S., 838 

F.2d 78 (3d Cir. 1988) (rejecting argument that a fiduciary owed 

an obligation to a beneficiary to explain the terms of a written 

plan). These cases, however, are inapplicable here. In each of 

them, breach of fiduciary duty claims were rejected because the 

plan documents clearly explained the benefits in question; none 

involved allegations that a breach of fiduciary duty had occurred 

because a plan administrator had affirmatively and materially 

misrepresented the terms of a plan. Furthermore, satisfaction by 

an employer as plan administrator of its statutory disclosure 

obligations under ERISA does not foreclose the possibility that 

the plan administrator may nonetheless breach its fiduciary duty 

owed plan participants to communicate candidly if the plan 

administrator simultaneously or subsequently makes material 

misrepresentations to those whom the duty of loyalty and prudence 

are owed. 

 Contrary to Unisys' claim, this is not a case involving 

an employer's "duty to remind". Instead, this case is more 
accurately characterized as a dispute over an employer's duty, as 

an ERISA fiduciary, not to misinform employees through material 

misrepresentations and incomplete, inconsistent or contradictory 

disclosures. In the present context, a misrepresentation is 

material if there is a substantial likelihood that it would 

mislead a reasonable employee in making an adequately informed 

retirement decision. Fischer v. Philadelphia Elec. Co., 994 F.2d 

at 135. Here the district court found that Unisys affirmatively 

and systematically represented to its employees that once they 

retired, their medical benefits would continue for life -- even 

though as the district court concluded in rejecting the retirees' 

contract claim, the plans clearly permitted the company to 

terminate benefits.26 We have no doubt that the conduct Unisys 

engaged in, based on the findings of the district court, would 

constitute a breach of fiduciary duty in its most basic form. 

Our decisions in Bixler, Fischer, Curcio and Smith firmly 

establish that when a plan administrator affirmatively 

misrepresents the terms of a plan or fails to provide information 

 

26. We have previously held that the Sperry retirees did 

not have a claim for relief based on breach of contract due to 

the unambiguous language of the reservation of rights clauses. 

See In re Unisys, No. 94-1800, slip opinion (3d Cir. June 28, 

1995). This decision does not foreclose the retirees' claims for 

relief based on a breach of fiduciary duty. In Curcio, supra, we 

upheld Mrs. Curcio's claim for breach of fiduciary duty, even 

though we had rejected her contract claim arising out of the same 

set of circumstances. See also Howe v. Varity Corp., 36 F.3d 

746, 753 (8th Cir. 1994), cert. granted, 115 S. Ct. 1792 (April 

24, 1995) (Howe I, in which plaintiffs' contract-type claims that 

benefits had vested were rejected, does not bar plaintiffs from 

urging in Howe II that they were entitled to relief on the basis 

of breach of fiduciary duty or estoppel). 
when it knows that its failure to do so might cause harm, the 

plan administrator has breached its fiduciary duty to individual 

plan participants and beneficiaries. 

 Imposing upon an employer a fiduciary duty in this case 

does not threaten or contradict our well-established policy 

disfavoring informal plan amendments.27 We recently recognized 

 

27. Unisys argues that we recently recognized the 

"troubling implications" of a misrepresentation claim based upon 

alleged oral misrepresentations to plan participants where 

accurate information was available in a summary plan description. 

(Unisys brief at pp. 31-32). Unisys directs our attention to a 

footnote in our decision in Haberern v. Kaupp Vascular Surgeons 

Ltd Defined Benefit Pension Plan, 24 F.3d 1491, 1501 n.6 (3d Cir. 

1994) in which we stated: 

 Thus, we do not reach the question whether 

Haberern's misrepresentation argument could 

be upheld under Section 502(a)(3). [citation 

omitted]. We do note, however, that 

Haberern's misrepresentation argument has 

troubling implications because the summary 

plan description pages given to her made it 

clear that the retirement benefit was based 

on compensation and the compensation did not 

include bonuses. [citations omitted]. Of 

course, the summary plan description mirrored 

the plan itself. Thus, Haberern effectively 

is relying on parol evidence to contradict 

clearly defined terms of a plan revealed to 

her in writing. Accordingly, if we adopt her 

approach we will create a precedent for any 

beneficiary to make claims for benefits 

beyond those provided in a plan. It would be 

difficult to reconcile that result with our 

cases holding that oral or informal 

amendments to ERISA benefit plans are 

precluded. See Confer v. Custom Eng'g Co., 

952 F.2d 41, 43 (3d Cir. 1991); Frank v. Colt 

Indus. Inc., 910 F.2d 90, 98 (3d Cir. 1990); 

Schoonejongen v. Curtiss-Wright Corp., 18 

F.3d 1034, 1040 (3d Cir. 1994), rev'd and 

remanded on other grounds, ___ U.S. ___, 115 

S. Ct. 1223 (1995) ("Unless and until the 

written plan is altered in a manner, and by a 
in Curcio, supra, that our equitable theories of relief under 

ERISA (breach of fiduciary duty and estoppel) are "not to be 

construed as conflicting with our precedent precluding oral or 

informal amendments to ERISA benefit plans. 33 F.3d at 236 n.17. 

 The retirees here do not argue that Unisys' 

misrepresentations modified their retiree medical benefit plans. 

Rather, for purposes of their breach of fiduciary claim, they 

assume the plans did not contractually vest benefits, and claim 

instead that the company breached its fiduciary duty by leading 

employees to believe that the plans did. This claim is distinct 

from a claim for benefits under the terms of the plan because it 

requires different proof (proof of fiduciary status, 

misrepresentations, company knowledge of the confusion and 

resulting harm to the employees) than would be required for a 

contract claim that the plans had been modified. 

 In recognizing the retirees' breach of fiduciary claim 

here, we do not intend to "create a precedent for any beneficiary 

to make claims beyond those provided in a plan." See Haberern, 

24 F.3d 1492, 1501 n.6 (3d Cir. 1994). However, the facts and 

circumstances in this case clearly warrant our recognition of a 

(..continued) 

person or persons authorized in the plan, 

neither the plan administrator nor a court is 

free to deviate from the terms of the 

original plan."). 

However, as the district court in Haberern observed, Haberern's 

claim (with respect to her bonus) was brought pursuant to section 

502(a)(1)(B) of ERISA, 29 U.S.C. § 1132(a)(1)(B) and not under 

section 1132(a)(3)(B), the provision of ERISA pursuant to which 

the retirees' claims are brought here. 
claim of a fiduciary breach. Here the district court found that 

virtually the entire company management had consistently 

misrepresented the plan, not just on one occasion or to one 

employee, but over a period of many years and both orally (in 

group meetings) and in writing (in newsletters) as well. Under 

these circumstances, we do not find a conflict with our policy 

against informal plan modification.28

 

28. Finally, Unisys attempts to distinguish Bixler from 

this case "because in Bixler, the information which allegedly was 

not supplied to the participant involved current facts which if 

brought to the attention of the participant, would have avoided a 

current loss of benefits under the plan." Unisys thus urges us 

to limit Bixler's application to a breach of fiduciary duty based 

upon a failure to disclose present circumstances that may affect 

an employee's present right to specific benefits under the terms 

of a plan. Unisys maintains that there is no evidence that at 

the time of the oral and written communications regarding retiree 

medical benefit coverage, anyone within the company knew that 

Unisys would be terminating its retiree medical benefit plans in 

November, 1992. (See Appellants' brief at pp. 35-36: "at the time 

the lifetime benefits were provided to retirees the company was 

not anticipating discontinuing them.") 

 We have previously held that ERISA does not "impose a 

duty of clairvoyance" under which employers would be required to 

advise participants and beneficiaries of the risk of plan changes 

not even being contemplated. See Curtiss-Wright, 18 F.2d at 

1042, n. 7. See also Fischer, 994 F.2d at 135 (an ERISA 

fiduciary is under no obligation to offer precise predictions 

about future changes to its plan). Our holding today should not 

be interpreted as creating a fiduciary obligation to predict and 

disclose future possibilities or potentialities to plan 

participants. 

 We accept Unisys' contention that at the time lifetime 

benefits were promised, no one at Sperry ever intended or 

anticipated that there would one day be the need to reduce or 

eliminate retiree medical benefits. Nonetheless, an ERISA 

fiduciary does have an obligation to "answer participants' 

questions forthrightly," Fischer, 994 F.2d at 135, and "a duty to 

communicate complete and accurate information about a 

beneficiary's status." Eddy v. Colonial Life Insurance, 919 F.2d 

746, 751 (D.C. Cir. 1990). This was the obligation that was 
 We turn now to the evidence adduced at trial on the 

breach of contract claim to see if sufficient evidence would 

support the other elements of the breach of fiduciary duty claim, 

specifically, Unisys' knowledge that its employees were mislead 

by Unisys' misrepresentations and Unisys' knowledge that its 

misrepresentations were material to the beneficiaries' 

circumstance because the misrepresentations influenced their 

decisions to retire. 

(..continued) 

breached in this case. The district court found that the 

retirees had presented credible testimony that some individuals 

specifically asked if their benefits would continue for life and 

were told they would, without any mention of the reservation of 

rights clauses. (A 2290 n.69). Employees were told, "Once you 

retire and take your first pension check from the company . . . 

that's it." (A 2534). Thus, while Unisys may not have 

anticipated ending the plans, it knew that it had the ability to 

do so and it knew that its employees were receiving answers to 

their specific inquiries that were vague, misleading and 

contradictory. 

 Unisys' situation was not completely unanticipated. 

Indeed, the company had the foresight to draft and incorporate 

reservation of rights clauses into its retiree medical plans, 

which expressly gave the company the right to terminate the plans 

if they became onerous. Unisys was aware of the retirees' 

confusion regarding the applicability of these clauses to their 

benefits and the retirees' mistaken belief that their benefits 

could not be terminated once an employee retired. Under these 

circumstances, we find a duty to convey complete and accurate 

information arose. 
III. 

 In detailed and well-supported findings, the district 

court found that Unisys had knowledge that its employees believed 

the assurances of lifetime benefits they had been given and were 

making retirement decisions based on their understanding that 

when they retired, the benefits that they had at the time they 

retired would continue for life. Uncontroverted evidence 

established that Unisys' executives were aware that the lifetime 

medical benefit was an important consideration for employees who 

were considering when to retire. This evidence established that 

the company knew that employees accelerated their retirement 

plans because of the belief that by retiring at a certain point 

in time, they would "lock in" the lifetime coverage that they had 

under the current plan.29 Further, the district court found that 

once Unisys was aware of the fact that retirees were electing to 

retire based on this understanding, Unisys failed to do anything 

to correct the misinformation, and instead reinforced the 

misunderstanding by continuing to repeat the same assurances that 

upon retirement a retiree's benefits would continue for life. 

 

29. The district court quoted testimony from Sperry's 

former Senior Vice President for Personnel, Frank Sweeten, who 

acknowledged that the lifetime promises made by Unisys to 

retiring employees was an influence in retirement decisions: 

 We said that this is yours for life. You 

have got it for life. And people made 

decisions on that. They decided whether to 

go [i.e., retire] or not go on the basis that 

they were told this is for life. 

(A 2230 n.19). 
 The district court found that the company, both 

actively and affirmatively, systematically misinformed its 

employees about the duration of their benefits by stating over 

and over again, without qualification, that their benefits would 

continue for life: 

 There is no question that the defendant 

routinely spoke of the medical benefits as 

continuing "for life". This message was 

conveyed time and time again throughout 

informal communications that were sent out to 

retirees, and by oral statements that were 

made to these individuals both at private 

exit interviews and in group retirement 

sessions. 

(A 2281-82). In addition to these communications in individual 

correspondence and company newsletters, the district court also 

cited examples of evidence that Unisys consistently responded to 

specific inquiries about whether a retiree's benefits could 

change by telling employees that they could not. (A 2290). 

 Given these findings, we hold that the district court 

did not err as a matter of law in concluding that the duty to 

convey complete and accurate information that was material to its 

employees' circumstance arose from these facts since the trustees 

had to know that their silence might cause harm. The district 

court's findings that the company actively misinformed its 

employees by affirmatively representing to them that their 

medical benefits were guaranteed once they retired, when in fact 

the company knew this was not true and that employees were making 

important retirement decisions relying upon this information, 

clearly support a claim for breach of fiduciary duty under ERISA. 
 We turn now to the remaining issue in this appeal, 

whether relief is available to individual plan participants under 

ERISA. 

IV. 

 In Bixler v. Central Pa. Teamsters Health-Welfare Fund, 

12 F.3d 1292 (3d Cir. 1993), we held that where a fiduciary 

breach causes harm to a beneficiary, that beneficiary has a claim 

for equitable relief pursuant to section 502(a)(3) of ERISA, 

which authorizes suits by participants for "appropriate equitable 

relief" to redress violations of ERISA.30 Relying on our 

 

30. Section 502 of ERISA provides: 

 (a) Persons empowered to bring a civil 

action 

 A civil action may be brought -- 

 (1) by a participant or beneficiary -- 

 (A) for the relief provided for in 

subsection (c) of this section, or 

 (B) to recover benefits due to him 

under the terms of his plan, to 

enforce his rights under the terms 

of the plan, or to clarify his 

rights to future benefits under the 

terms of the plan; 

 (2) by the Secretary, or by a participant, 

beneficiary or fiduciary for appropriate 

relief under section 1109 of this title; 

 (3) by a participant, beneficiary, or 

fiduciary (A) to enjoin any act or practice 

which violates any provision of this 

subchapter or the terms of the plan, or (B) 

to obtain other appropriate equitable relief 
decision in Bixler, the district court concluded that equitable 

relief was available to individual plan participants for breach 

of fiduciary duty under section 502(a)(3)(B). 

 In Bixler, we considered both the source and the scope 

of an ERISA fiduciary's duty to one of its beneficiaries and held 

that a direct action for breach of fiduciary duty exists in the 

"other appropriate equitable relief" clause of section 

502(a)(3)(B) of ERISA, 29 U.S.C. § 1132(a)(3)(B). Recognizing 

that "undoubtedly there will be instances in which a fiduciary's 

actions harm an individual beneficiary, but do not harm the 

plan," we adopted the approach of Justice Brennan's concurrence 

in Massachusetts Mutual Life Ins. Co. v. Russell, 473 U.S. 134 

(1985) to hold that "section 502(a)(3) authorizes the award of 

`appropriate equitable relief' directly to a participant or 

beneficiary to `redress' any act or practice which violates any

provision of this title including a breach of the statutorily 

created fiduciary duty of an administrator." Bixler, 12 F.3d at 

1298 (citing Massachusetts Mutual, 473 U.S. at 153).31 We held 

(..continued) 

(i) to redress such violations or (ii) to 

enforce any provisions of this subchapter or 

the terms of the plan. . . . 

31. In Massachusetts Mutual, the Supreme Court addressed 

the question whether an ERISA fiduciary could be held personally 

liable to a participant or beneficiary for extra contractual 

damages caused by the improper or untimely processing of benefits 

claims. The plaintiff had sued only under ERISA's fiduciary duty 

section, section 409(a), and its civil enforcement section, 

section 502(a)(2); thus the court's holding was similarly 

limited. After examining the statutory language of these 

provisions, Justice Stevens, speaking for the majority, 

concluded: "The entire text of section 409 persuades us that 

Congress did not intend that section to authorize any relief [for 
that the principles of section 404(a), which serve as the 

touchstone for understanding the scope and object of an ERISA 

fiduciary's duties, are given effect by section 502(a)(3) which, 

in the language of the statute, authorizes the award of 

"appropriate equitable relief" directly to a participant or 

beneficiary to redress any act or practice which violates the 

provision of ERISA. We observed, of course, that this relief is 

independent of that established in section 409, authorizing 

recovery for breach of fiduciary duty on behalf of the plan. 

 Unisys suggests that our conclusion in Bixler is called 

into question by the Supreme Court's decision in Mertens v. 

Hewitt Assoc., ___ U.S. ___, 113 S. Ct. 2063 (1993), in which the 

Supreme Court held that money damages are not available under 

(..continued) 

breach of fiduciary duty] except for the plan itself." 

Massachusetts Mutual, 473 U.S. at 144. 

 Justice Brennan, joined by Justices White, Marshall and 

Blackmun, wrote separately to emphasize the limited reach of the 

majority opinion and to outline the proper approach for courts to 

take in construing other ERISA provisions. In full agreement 

with the majority that section 409 did not authorize recovery to 

an individual, Justice Brennan explained that individual recovery 

for breach of fiduciary duty is available elsewhere in the 

statute, in the "other appropriate equitable relief" clause of 

section 502(a)(3), reasoning that allowing an injured beneficiary 

recourse through the courts is essential to fulfilling the 

purpose of ERISA. Explaining that Congress intended this result, 

Justice Brennan found the fundamental purpose of the statute was 

the "enforcement of strict fiduciary standards of care in the 

administration of all aspects of pension plans and promotion of 

the best interests of participants and beneficiaries." 473 U.S. 

at 158. See also id. at 152-53, citing H.R. Conf. Rep. No. 1280, 

93rd Cong., 2d Sess., reprinted in 1974 U.S.C.C.A.N. 5030, 5106 

(emphasizing that section 502 permits beneficiaries to bring a 

"civil action to recover benefits due under the plan, to clarify 

rights to receive future benefits under the plan, and for relief 

from breach of fiduciary responsibility") (emphasis added). 
section 502(a)(3), which, by its very terms, authorizes only 

equitable relief. Although Unisys acknowledges that the Supreme 

Court in Mertens never addressed the question of whether, in the 

event of a breach of fiduciary duty, a plan participant could 

seek equitable relief on his own behalf (rather than on behalf of 

a plan), Unisys maintains that the Supreme Court in Mertens

expressed an unwillingness to infer causes of action in the ERISA 

context. See id. at 2067.32

 We do not read Mertens as precluding the retirees' 

claim for equitable relief. In a post-Mertens decision, the 

Court of Appeals for the Seventh Circuit reached the same 

conclusion and reversed the district court's holding that 

individual relief was not available under section 502(a)(3), 

holding instead, based on Mertens, that section 502(a)(3) 

authorized such relief. Anweiler v. Amer. Elec. Power Serv. 

Corp., 3 F.3d 986, 993 (7th Cir. 1994). 

 In Mertens, the Court held that the 

"appropriate equitable relief" in section 

[502(a)(3)] included only typical remedies 

available in equity and not "legal remedies" 

like compensatory damages or monetary relief. 

The court limited its holding to the "narrow 

 

32. Unisys observes that we did not mention Mertens in our 

opinion in Bixler, and that two other courts since Mertens have 

held that only the plan, and not individual plan participants or 

beneficiaries, are entitled to relief for a breach of a fiduciary 

duty based on their conclusion that the sole and exclusive bases 

for such relief are sections 409 and 502(a)(2) of ERISA, 29 

U.S.C. §§ 1109 and 1132(a)(2). See Richards v. General Motors 

Corp., 850 F. Supp. 1325 (E.D. Mich. 1994), and Kaiser Permanente 

Employees Pension Plan v. Bertozzi, 849 F. Supp. 692, 700 (N.D. 

Cal. 1994) (concluding that recovery under section 502(a)(3) is 

limited to "relief that inures to the benefit of the plan as a 

whole"). 
battleground" chosen by the parties and 

decided the issue of "what forms of relief 

are available" under section 1132(a)(3), not 

to whom the relief can go or whether a 

remedial wrong had even been alleged. 

Nevertheless, Mertens clearly indicates the 

importance and availability of equitable 

relief. Moreover, the Secretary of Labor in 

an amicus curiae brief argues [that] Mertens

dictates the availability of relief to an 

individual under section 1132(a)(3) for a 

fiduciary's breach of duty. Therefore, in 

light of Mertens and in deference to the 

Secretary's interpretation of the law which 

he is authorized to enforce, we hold that an 

individual may seek equitable relief from a 

breach of fiduciary duty under Section 

1132(a)(3). 

Id. (citations omitted). The Court of Appeals for the Eighth 

Circuit reached the same result in Howe v. Varity Corp., 36 F.3d 

746 (8th Cir. 1994), cert. granted, 115 S. Ct. 1792 (April 24, 

1995).33 Thus, our decision in Bixler is consistent with the 

 

33. Interestingly, the Court of Appeals in Howe relied on 

Mertens to vacate the district court's award of punitive and 

compensatory damages, but upheld its equitable remedies in the 

form of monetary restitution for back benefits and an injunction 

restoring future benefits under the plaintiffs' former medical 

plan. With respect to Mertens, the court of appeals opined: 

 Mertens simply holds that only "equitable 

relief" is available under section 502(a)(3), 

29 U.S.C. § 1132(a)(3), and that this phrase 

does not include the collection of damages 

from persons who are not fiduciaries but act 

in concert with those who are fiduciaries. 

Nothing in Mertens precludes an award of 

traditional equitable relief, including an 

injunction, restitution, and the like. As 

plaintiffs now concede . . . after Mertens, 

compensatory damages are not recoverable 

under section 1132(a)(3). But the case by no 

means bars equitable relief for individual 

participants who have suffered a breach of 

trust. 
decisions of the Courts of Appeal for the Seventh and Eighth 

Circuits.34 Accordingly, we reaffirm our conclusion in Bixler

that equitable relief running to an individual falls within the 

scope both of section 1132(a)(3)'s language and of ERISA's broad 

remedial purpose. See 29 U.S.C. § 1001(b). 

 A question left unanswered by Bixler is the form of 

equitable relief available under section 502(a)(3). Both the 

district court and the Sperry retirees agree that the retirees 

are not entitled to money damages for a breach of fiduciary duty. 

Instead, the retirees seek an injunction ordering specific 

performance of the assurances Unisys made, restitutionary 

reimbursement for back benefits, and restoration of the status

quo ante for the Sperry early retirees by rescinding their 

retirement agreements. These are remedies which are 

restitutionary in nature and thus equitable. See Curcio, 33 F.2d 

at 238-39 ("[W]e hold that Mrs. Curcio's alternate argument [that 

Capital Health breached its fiduciary duty] provides additional 

support for our conclusion that Capital Health is liable to Mrs. 

Curcio for the $150,000 in supplemental AD&D", representing full 

enforcement of the promise that had been made); Howe v. Varity 

Corp., 36 F.3d at 756 (award of monies plaintiffs would have 

received if they had remained members of the M-F plan could not 

properly be characterized as damages; rather, the payments were 

 

34. The Court of Appeals for the Ninth Circuit, in a preMertens decision, held to the contrary. Sokol v. Bernstein, 803 

F.2d 532 (9th Cir. 1986) (beneficiary was not entitled to recover 

extra contractual damages for emotional distress caused by 

arbitrary and capricious acts of plan trustee). 
restitution). It will be for the district court to determine 

which of these remedies are appropriate under the circumstances 

of these individual claims. 

V. 

 For the foregoing reasons, the order of the district 

court dated June 23, 1994, reinstating the retirees' claims for 

breach of fiduciary duty which was certified for appeal pursuant 

to 28 U.S.C. § 1292(b) by order entered July 12, 1994, will be 

affirmed. This cause is remanded to the district court for 

further proceedings.