Source: https://supreme.justia.com/cases/federal/us/508/248/
Timestamp: 2019-04-25 16:19:37+00:00

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ERISA does not authorize suits for money damages against nonfiduciaries who knowingly participate in a fiduciary's breach of fiduciary duty.
et seq., is liable for losses that an employee benefit plan suffers as a result of the breach.
According to the complaint, the allegations of which we take as true, petitioners represent a class of former employees of the Kaiser Steel Corporation (Kaiser) who participated in the Kaiser Steel Retirement Plan, a qualified pension plan under ERISA. Respondent was the plan's actuary in 1980, when Kaiser began to phase out its steelmaking operations, prompting early retirement by a large number of plan participants. Respondent did not, however, change the plan's actuarial assumptions to reflect the additional costs imposed by the retirements. As a result, Kaiser did not adequately fund the plan, and eventually the plan's assets became insufficient to satisfy its benefit obligations, causing the Pension Benefit Guaranty Corporation (PBGC) to terminate the plan pursuant to 29 U. S. C. § 1341. Petitioners now receive only the benefits guaranteed by ERISA, see § 1322, which are in general substantially lower than the fully vested pensions due them under the plan.
1 The complaint also named as defendants the plan and the PBGC, in its capacity as the plan's statutory trustee. The District Court's dismissal of these defendants was not appealed, nor was its dismissal of the PBGC's cross-claim demanding that any recovery by petitioners be paid to it.
Petitioners sought certiorari only on the question whether ERISA authorizes suits for money damages against nonfiduciaries who knowingly participate in a fiduciary's breach of fiduciary duty. We agreed to hear the case. 506 U. S. 812 (1992).
2 Petitioners also claimed that respondent's activities constituted a party-in-interest transaction prohibited by ERISA and professional malpractice under state law. The District Court's dismissal of the former claim was not appealed, but the Court of Appeals reversed the dismissal of the pendent claim on state-law grounds. Petitioners also sought declaratory and injunctive relief, which the District Court deemed irrelevant, given that the plan had been terminated and with it respondent's position as the plan's actuary. The Court of Appeals did not address this point.
"(6) by the Secretary to collect any civil penalty under subsection (c)(2) or (i) or (l) of this section." 29 U. S. C. § 1132(a) (1988 ed. and Supp. III).
allows the Secretary of Labor or any plan beneficiary, participant, or fiduciary to bring a civil action "for appropriate relief under section ."
"(A) to enjoin any act or practice which violates any provision of [ERISA] or the terms of the plan, or (B) to obtain other appropriate equitable relief (i) to redress such violations or (ii) to enforce any provisions of [ERISA] or the terms of the plan .... "
See also § 502(a)(5), 29 U. S. C. § 1132(a)(5) (providing, in similar language, for civil suits by the Secretary based upon violation of ERISA provisions). Petitioners contend that requiring respondent to make the Kaiser plan whole for the losses resulting from its alleged knowing participation in the breach of fiduciary duty by the Kaiser plan's fiduciaries would constitute "other appropriate equitable relief" within the meaning of § 502(a)(3).
4 For example, a person who provides services to a plan is a "party in interest," 29 U. S. C. § l002(14)(B), and may not offer his services or engage in certain other transactions with the plan, § l106(a), for more than reasonable compensation, § l108(b)(2). See also § l023(d)(8) (annual reports must include certification by enrolled actuary); § l082(c)(3) (minimum funding standards for plan to be based on "reasonable" actuarial assumptions).
Petitioners maintain that the object of their suit is "appropriate equitable relief" under § 502(a)(3) (emphasis added). They do not, however, seek a remedy traditionally viewed as "equitable," such as injunction or restitution. (The Court of Appeals held that restitution was unavailable, see 948 F.2d, at 612, and petitioners have not challenged that.) Although they often dance around the word, what petitioners in fact seek is nothing other than compensatory damages-monetary relief for all losses their plan sustained as a result of the alleged breach of fiduciary duties. Money damages are, of course, the classic form of legal relief. Curtis v. Loether, 415 U. S. 189, 196 (1974); Teamsters v. Terry, 494 U. S. 558, 570-571 (1990); D. Dobbs, Remedies § 1.1, p. 3 (1973). And though we have never interpreted the precise phrase "other appropriate equitable relief," we have construed the similar language of Title VII of the Civil Rights Act of 1964 (before its 1991 amendments)-"any other equitable relief as the court deems appropriate," 42 U. S. C. § 2000e-5(g)-to preclude "awards for compensatory or punitive damages." United States v. Burke, 504 U. S. 229, 238 (1992).
5 The dissent expresses its certitude that "the statute clearly does not bar such a suit." Post, at 265, n. 1. That, of course, is not the issue. The issue is whether the statute affirmatively authorizes such a suit. To meet that requirement, it is not enough to observe that "trust beneficiaries clearly had such a remedy [against nonfiduciaries who actively assist in the fiduciary's breach] at common law." Ibid. They had such a remedy because nonfiduciaries had a duty to the beneficiaries not to assist in the fiduciary's breach. A similar duty is set forth in ERISA; but as we have noted, only some common-law "nonfiduciaries" are made subject to it, namely, those who fall within ERISA's artificial definition of "fiduciary."
resembles an action at law for damages," the Solicitor General suggests, "such relief traditionally has been obtained in courts of equity" and therefore "is, by definition, 'equitable relief.'" Brief for United States as Amicus Curiae 13-14. It is true that, at common law, the courts of equity had exclusive jurisdiction over virtually all actions by beneficiaries for breach of trust. See Lessee of Smith v. McCann, 24 How. 398, 407 (1861); 3 Scott & Fratcher § 197, p. 188.6 It is also true that money damages were available in those courts against the trustee, see United States v. Mitchell, 463 U. S. 206, 226 (1983); G. Bogert & G. Bogert, Law of Trusts and Trustees § 701, p. 198 (rev. 2d ed. 1982) (hereinafter Bogert & Bogert), and against third persons who knowingly participated in the trustee's breach, see Seminole Nation v. United States, 316 U. S. 286, 296-297 (1942); Scott, Participation in a Breach of Trust, 34 Harv. L. Rev. 454 (1921).
6 The only exceptions were actions at law to obtain payment of money or transfer of chattels immediately and unconditionally due the beneficiary, see 3 Scott & Fratcher § 198-and even then the courts were divided over whether equivalent actions could also be brought in equity, see id., § 198.3.
ing becomes, perhaps, increasingly unlikely; but it remains a question of interpretation in each case which meaning is intended.
7 The dissent argues that it would limit the relief by rendering punitive damages unavailable. Post, at 270-272. The notion that concern about punitive damages motivated Congress is a classic example of projecting current attitudes upon the helpless past. Unlike the availability of money damages, which always has been a central concern of courts and legislatures in fashioning causes of action, the availability of punitive damages is a major issue today, but was not in 1974, when ERISA was enacted. See Pacific Mut. Life Ins. Co. v. Haslip, 499 U. S. 1, 61-62 (1991) (O'CONNOR, J., dissenting); P. Huber, Liability 127 (1988); Ellis, Fairness and Efficiency in the Law of Punitive Damages, 56 S. Cal. L. Rev. 1, 2-3 (1982). That is particularly so for breach-of-trust cases. The 1988 edition of Scott & Fratcher cites no pre-ERISA case on the issue of punitive damages, see 3 Scott & Fratcher § 205, p. 239, n. 2; the 1982 edition of Bogert & Bogert cites two, see Bogert & Bogert § 862, p. 41, n. 12. The 1992 supplements to these treatises, however, each cite more than a dozen cases on the issue from the 1980's.
194 P. 2d 533 (1948). The two decisions upon which the dissent relies, Fleishman v. Krause, Lindsay & Nahstoll, 261 Ore. 505, 495 P. 2d 268 (1972), and Dixon v. Northwestern Nat. Bank of Minneapolis, 297 F. Supp. 485 (Minn. 1969), see post, at 271, held only that the breach-of-trust actions at issue could be brought at law, thus entitling the plaintiffs to a jury trial. While both decisions noted in passing that the plaintiffs sought punitive as well as compensatory damages, neither said that those damages could be obtained, much less that they could be obtained only at law.
The dissent's claim that the Courts of Appeals have adopted its theory that "equitable relief" was used in ERISA to exclude punitive damages, see post, at 272, n. 6, is also unfounded. The only opinion the dissent cites that permits punitive damages when an "equitable relief" limitation does not exist (viz., under § 502(a)(2), which permits not only "equitable," but also "remedial," relief) is Kuntz v. Reese, 760 F.2d 926 (CA9 1985). That opinion (a) was based on the Ninth Circuit precedent we subsequently reversed in Massachusetts Mut. Life Ins. Co. v. Russell, 473 U. S. 134 (1985), see Kuntz, supra, at 938; (b) was formally withdrawn after being vacated on other grounds, see 785 F.2d 1410 (per curiam), cert. denied, 479 U. S. 916 (1986); and (c) has never been relied upon again, even by the Ninth Circuit.
8We agree with the dissent, see post, at 269, n. 4, that the distinction between "equitable" and "remedial" relief is artless, but do not agree that we are therefore free to consider it meaningless. "Equitable" relief must mean something less than all relief. Congress has, it may be noted, used the same language ("other equitable or remedial relief") elsewhere. See 5 U. S. C. § 8477(e)(1)(A).
with the PBGC, see §§ 1303(e)(1), 1451(a)(1).9 Neither option is acceptable. See Estate of Cowart v. Nicklos Drilling Co., 505 U. S. 469, 479 (1992); cf. Lorillard v. Pons, 434 U. S. 575, 583 (1978). The authority of courts to develop a "federal common law" under ERISA, see Firestone, 489 U. S., at 110, is not the authority to revise the text of the statute.
"the Secretary shall assess a civil penalty against such fiduciary or other person in an amount equal to 20 percent of the applicable recovery amount." 29 U. S. C. § 1132(l)(1) (1988 ed., Supp. III).
9 The dissent postulates that Congress used the "legal or equitable relief" language only where the cause of action it was authorizing lacked "any discernible analogue in the common law of trusts," as a means of indicating that the courts are "free to craft whatever relief is most appropriate." Post, at 268-269. That is demonstrably not so. Administrative accounting requirements like the ones enforced through 29 U. S. C. § 1024(a)(5)(C) (which uses the "legal or equitable" formulation) were not unheard-of before ERISA, see 2A Scott & Fratcher § 172, p. 456, and they have an "analogue" in the basic duty of trustees to keep and render accounts upon demand by the beneficiary, see id., § 172; Bogert & Bogert § 861, pp. 7-9. Moreover, in a 1986 amendment to the subchapter dealing with the PBGC, Congress created a cause of action to enforce the provisions governing termination of single-employer plans, using the same "other appropriate equitable relief" language as appears in § 502(a)(3). See 29 U. S. C. § 1370(a)(2). That cause of action no more reflects some common-law "analogue" than do those created by the other PBGC provisions referred to in text (which employ the "legal or equitable" formulation).
The Secretary may waive or reduce this penalty if he believes that "the fiduciary or other person will [otherwise] not be able to restore all losses to the plan without severe financial hardship." § 1132(l)(3)(B). "[A]pplicable recovery amount" is defined (in § 502(1)(2)(B)) as "any amount ... ordered by a court to be paid by such fiduciary or other person to a plan or its participants or beneficiaries in a judicial proceeding instituted by the Secretary under [§§ 502](a)(2) or (a)(5)." It will be recalled that the latter subsection, § 502(a)(5), authorizes relief in actions by the Secretary on the same terms ("appropriate equitable relief") as in the private-party actions authorized by § 502(a)(3). Petitioners argue that § 502(1) confirms that § 502(a)(5)-and hence, since it uses the same language, § 502(a)(3)-allows actions for damages, since otherwise there could be no "applicable recovery amount" against some "other person" than the fiduciary, and the Secretary would have no occasion to worry about whether any such "other person" would be able to "restore all losses to the plan" without financial hardship.
ipation in a fiduciary's breach of duty, see supra, at 253-254, cofiduciaries expressly are, see § 405(a), so there are some "other person[s]" than fiduciaries-in-breach liable under § 502(1)(1)(B). These applications of § 502(1) give it meaning and scope without resort to the strange interpretation of "equitable relief" in § 502(a)(3) that petitioners propose. The Secretary's initial interpretation of § 502(1) accords with our view. The prologue of the proposed regulation implementing §502(l), to be codified at 29 CFR §2560.5021-1, states that when a court awards "equitable relief" -as opposed to "monetary damages" -a § 502(1) penalty will be assessed only if the award involves the transfer to the plan of money or property. 55 Fed. Reg. 25288, 25289, and n. 9 (1990).
In the last analysis, petitioners and the United States ask us to give a strained interpretation to § 502(a)(3) in order to achieve the "purpose of ERISA to protect plan participants and beneficiaries." Brief for Petitioners 31. They note, as we have, that before ERISA nonfiduciaries were generally liable under state trust law for damages resulting from knowing participation in a trustees's breach of duty, and they assert that such actions are now pre-empted by ERISA's broad pre-emption clause, § 514(a), 29 U. S. C. § 1144(a), see Ingersoll-Rand Co. v. McClendon, 498 U. S. 133, 139-140 (1990). Thus, they contend, our construction of § 502(a)(3) leaves beneficiaries like petitioners with less protection than existed before ERISA, contradicting ERISA's basic goal of "promot[ing] the interests of employees and their beneficiaries in employee benefit plans," Shaw v. Delta Air Lines, Inc., 463 U. S. 85, 90 (1983). See Firestone Tire & Rubber Co. v. Bruch, supra, at 114.
subsidiary goal of containing pension costs." Alessi v. Raybestos-Manhattan, Inc., 451 U. S. 504, 515 (1981); see also Russell, 473 U. S., at 148, n. 17. We will not attempt to adjust the balance between those competing goals that the text adopted by Congress has struck.
JUSTICE WHITE, with whom THE CHIEF JUSTICE, JusTICE STEVENS, and JUSTICE O'CONNOR join, dissenting.
The majority candidly acknowledges that it is plausible to interpret the phrase "appropriate equitable relief" as used in § 502(a)(3), 88 Stat. 891, 29 U. S. C. § 1132(a)(3), at least standing alone, as meaning that relief which was available in the courts of equity for a breach of trust. Ante, at 256. The majority also acknowledges that the relief petitioners seek here-a compensatory monetary award-was available in the equity courts under the common law of trusts, not only against trustees for breach of duty, but also against nonfiduciaries knowingly participating in a breach of trust, ante, at 256,261,262. Finally, there can be no dispute that ERISA was grounded in this common-law experience and that "we are [to be] guided by principles of trust law" in construing the terms of the statute. Firestone Tire & Rubber Co. v. Bruch, 489 U. S. 101, 111 (1989). Nevertheless, the majority today holds that in enacting ERISA Congress stripped ERISA trust beneficiaries of a remedy against trustees and third parties that they enjoyed in the equity courts under common law. Although it is assumed that a cause of action against a third party such as respondent is provided by ERISA, the remedies available are limited to the "traditional" equitable remedies, such as injunction and restitution, and do not include compensatory damages-"the classic form of legal relief." Ante, at 255 (emphasis in original).
Because I do not believe that the statutory language requires this result and because we have elsewhere recognized the anomaly of construing ERISA in a way that "would afford less protection to employees and their beneficiaries than they enjoyed before ERISA was enacted," Firestone, supra, at 114 (emphasis added), I must dissent.
Concerned that many pension plans were being corruptly or ineptly mismanaged and that American workers were losing their financial security in retirement as a result, Congress in 1974 enacted ERISA, "declar[ing] [it] to be the policy of [the statute] to protect ... the interests of participants in employee benefit plans and their beneficiaries, by requiring the disclosure and reporting to participants and beneficiaries of financial and other information with respect [to the plans], by establishing standards of conduct, responsibility, and obligation for fiduciaries of employee benefit plans, and by providing for appropriate remedies, sanctions, and ready access to the Federal courts." 29 U. S. C. § 1001(b).
110; see also H. R. Rep. No. 93-533, supra, at 11; S. Rep. No. 93-127, p. 29 (1973); 120 Congo Rec. 29928, 29932 (1974) (statement of Sen. Williams).
1 As an initial matter, the majority expresses some uncertainty about whether § 502(a)(3) affords a cause of action and any sort of remedy against nonfiduciaries who participate in a fiduciary's breach of duty under the statute. See ante, at 253-254. In my view, however, the statute clearly does not bar such a suit. Section 502(a)(3) gives a cause of action to any participant, beneficiary, or fiduciary of an ERISA-governed plan "to redress ... violations" of the statute. There can be no dispute that when an ERISA fiduciary breaches his or her duty of care in managing the plan, there has been a violation of the statute. See 29 U. S. C. § 1104. The only question then is whether the remedies provided by § 502(a)(3) "to redress such [a] violatio[n]" must stop with the breaching fiduciary or may extend to nonfiduciaries who actively assist in the fiduciary's breach. Section 502(a)(3) does not expressly provide for such a limitation and it does not seem appropriate to import one given that trust beneficiaries clearly had such a remedy at common law, see ante, at 256, 261, 262, and that ERISA is grounded in that common law and was intended, above all, to protect the interests of beneficiaries.
Moreover, the amendment of the statute in 1989, adding § 502(1), seems clearly to reflect Congress' understanding that ERISA provides such a remedy. As the majority notes, see ante, at 259, § 502(1) empowers the Secretary of Labor to assess a civil penalty against nonfiduciaries who "knowing[ly] participat[e]" in a fiduciary's breach of trust. 29 U. S. C. § 1132(l)(1)(B) (1988 ed., Supp. III). The subsection further provides that this penalty shall be "equal to 20 percent of the applicable recovery amount" obtained from the nonfiduciary in a proceeding under § 502(a)(5), which provides a cause of action to the Secretary that parallels that provided to beneficiaries under § 502(a)(3). §§ 1132(l)(1) and (2); see also ante, at 260. This provision clearly contemplates that some remedy may be had under § 502(a)(5)-and, by necessary implication, under § 502(a)(3)-against nonfiduciaries for "knowing participation" in a fiduciary's "breach of fiduciary responsibilit[ies]." § 1132(l)(1). Given that this understanding accords with well-established common-law trust principles undergirding ERISA and that it is also compatible with the language of § 502(a)(3), I see no basis for doubting the validity of petitioners' cause of action.
the courts of equity were the predominant forum for beneficiaries' claims arising from a breach of trust. These courts were not, however, the exclusive forum. In some instances, there was jurisdiction both in law and in equity and it was generally (although not universally) acknowledged that the beneficiary could elect between his or her legal and equitable remedies. See Clews v. Jamieson, 182 U. S. 461, 480-481 (1901); G. Bogert & G. Bogert, Law of Trusts and Trustees §870, pp.l0l-l07 (2d rev. ed.1982); 3 A. Scott & W. Fratcher, Law of Trusts § 198, pp.194-203 (4th ed.1988); J. Hill, Trustees *518-*519; Annot., Remedy at Law Available to Beneficiary of Trust as Exclusive of Remedy in Equity, 171 A. L. R. 429 (1947). Indeed, the Restatement of Trusts sets out in separate, successive sections the "legal" and "equitable" remedies available to beneficiaries under the common law of trusts. See Restatement (Second) of Trusts §§ 198, 199 (1959).
The traditional "equitable remedies" available to a trust beneficiary included compensatory damages. Equity "endeavor[ed] as far as possible to replace the parties in the same situation as they would have been in, if no breach of trust had been committed." Hill, supra, at *522; see also J. Tiffany & E. Bullard, Law of Trusts and Trustees 585586 (1862) (defendant is chargeable with any losses caused to trust or with any profits trust might have earned absent the breach). This included, where necessary, the payment of a monetary award to make the victims of the breach whole. Clews v. Jamieson, supra, at 479-480; Hill, supra, at *522; Bogert & Bogert, supra, § 862; see also United States v. Mitchell, 463 U. S. 206, 226 (1983); Massachusetts Mut. Life Ins. Co. v. Russell, 473 U. S. 134, 154, n. 10 (1985) (Brennan, J., concurring in judgment).
both fiduciaries and participating nonfiduciaries. Construing the statute in this manner also avoids the anomaly of interpreting ERISA so as to leave those Congress set out to protect-the participants in ERISA-governed plans and their beneficiaries-with "less protection ... than they enjoyed before ERISA was enacted." Firestone, 489 U. S., at 114.2 Indeed, this is precisely how four Justices of this Court read § 502(a)(3)'s reference to "appropriate equitable relief" in Russell. See 473 U. S., at 154, and n. 10 (Brennan, J., joined by WHITE, Marshall, and BLACKMUN, JJ., concurring in judgment).
2 Section 514(a) of ERISA pre-empts "any and all State laws insofar as they may now or hereafter relate to any employee benefit plan" governed by ERISA. 29 U. S. C. § 1144(a). Although the majority stops short of deciding the pre-emption implications of its holding, see ante, at 261, it is difficult to imagine how any common-law remedy for the harm alleged here-participation in a breach of fiduciary duty concerning an ERISAgoverned plan-could have survived enactment of ERISA's" 'deliberately expansive'" pre-emption provision, Ingersoll-Rand Co. v. McClendon, 498 U. S. 133, 138 (1990) (citation omitted).
in which to give "appropriate equitable relief" a limiting effect, the majority feels compelled to read the phrase as encompassing only "those categories of relief that were typically available" in the broad run of equity cases, without regard to the particular equitable remedies available in trust cases. See ante, at 256 (emphasis in original). This would include injunction and restitution, for example, but not money damages. See ibid. As I see it, however, the words "appropriate equitable relief" are no more than descriptive and simply refer to all remedies available in equity under the common law of trusts, whether or not they were or are the exclusive remedies for breach of trust.
3 The majority claims to find a common-law analogue for an action under § 104(a)(5)(C), likening an action by the Secretary of Labor to enforce ERISA's administrative filing requirements to a common-law action against a trustee for failure to keep and render accounts. Ante, at 259, n. 9. The analogy seems to me a long reach. The common-law duty of trustees to account to beneficiaries for all transactions made on behalf of the trust bears, at best, only slight resemblance to the ERISA-created duty of plan administrators to file with the Secretary of Labor specified annual reports, plan descriptions, and summary plan descriptions. See 29 U. S. C. § 1024(a)(1). So, too, the fact that some States-by statutehave required trustees to render an accounting to state courts, see 2A A. Scott & W. Fratcher, Law of Trusts § 172, p. 456 (4th ed. 1988), cited ante, at 259, n. 9, fails to establish a common-law analogue for actions by the Secretary under § 104(a)(5)(C).
4 Moreover, if the text of the statute reflects Congress' careful differentiation between "legal" and "equitable" relief, as the majority posits, it presumably must also reflect a careful differentiation between "equitable" and "remedial" relief and, for that matter, between "legal" and "remedial" relief. See 29 U. S. C. § 1l09(a) (breaching fiduciary "shall be subject to such other equitable or remedial relief as the court may deem appropriate"). What limiting principle Congress could have intended to convey by this latter term I cannot readily imagine. "Remedial," after all, simply means "intended as a remedy," Webster's Ninth New Collegiate Dictionary 996 (1983), and "relief" is commonly understood to be a synonym for "remedy," id., at 995. At the very least, Congress' apparent imprecision in this regard undermines my confidence in the strong inferences drawn by the majority from Congress' varying phraseology concerning relief under ERISA.
Extracontractual and Punitive Damages After Massachusetts Mutual Life Insurance Co. v. Russell, 71 Cornell L.
(1975); Superior Constr. Co. v. Elmo, 204 Md. 1, 16, 104 A. 2d 581, 583 (1954); Given v. United Fuel Gas Co., 84 W. Va. 301,306, 99 S. E. 476, 478 (1919); Orkin Exterminating Co. of South Florida v. Truly Nolen, Inc., 117 So. 2d 419, 422-423 (Fla. App. 1960); D. Dobbs, Remedies § 3.9, pp. 211-212 (1973). Thus, even "where, in equitable actions, it becomes necessary to award damages, only compensatory damages should be allowed." Karns v. Allen, 135 Wis. 48, 58, 115 N. W. 357, 361 (1908); see also Coca-Cola Co. v. Dixi-Cola Laboratories, 155 F.2d 59, 63 (CA4), cert. denied, 329 U. S. 773 (1946); United States v. Bernard, 202 F.7d 8, 732 (CA9 1913); 1 T. Sedgwick, Measure of Damages § 371, p. 531 (8th ed. 1891).
The majority denigrates this traditional rule by citing to Professor Dobbs' 1973 treatise on remedies. That treatise noted a "modern" trend among some courts (on the eve of ERISA's enactment) to allow punitive damages in equity cases, but it also noted that the majority rule remained otherwise. Moreover, the trend Professor Dobbs identified was driven in large part by the "modern" merger of law and equity and by the consequent belief that there is no longer any reason to disallow "legal" remedies in what traditionally were "equitable" actions. See ante, at 258, n. 8. Accordingly, the majority's observation in no way undermines the validity of the traditional rule-well ensconsed at the time of ERISA's enactmentthat punitive damages were not an appropriate equitable remedy, even in trust cases.
Rev. 1014, 1029-1030 (1986); see also D. Dobbs, Remedies § 3.9, pp. 211-212 (1973), a number of courts in more recent decades have drawn upon their "legal" powers to award punitive damages even in cases that historically could have been brought only in equity. While acknowledging the traditional bar against such relief in equity, these courts have concluded that the merger of law and equity authorizes modern courts to draw upon both legal and equitable powers in crafting an appropriate remedy for a breach of trust. See 1. H. P. Corp. v. 210 Central Park South Corp., 16 App. Div. 2d 461, 464-466, 228 N. Y. S. 2d 883, 887-888 (1962), aff'd, 12 N. Y. 2d 329, 189 N. E. 2d 812 (1963); Gould v. Starr, 558 S. W. 2d 755, 771 (Mo. App. 1977), cert. denied, 436 U. S. 905 (1978); Citizens & Southern Nat. Bank v. Haskins, 254 Ga. 131,136-137,327 S. E. 2d 192, 199 (1985); see also New Jersey Division, Horsemen's Benevolent Protective Assn. v. New Jersey Racing Comm'n, 251 N. J. Super. 589, 605, 598 A. 2d 1243, 1251 (1991) (present-day Chancery Division can "afford the full range of equitable and legal remedies for breach of trust," including punitive damages); cf. Charles v. Epperson & Co., 137 N. W. 2d 605, 618 (Iowa 1965).
1465 (CA5 1986), cert. denied, 479 U. S. 1034 (1987); Powell v. Chesapeake & Potomac Telephone Co. of Virginia, 780 F.2d 419,424 (CA4 1985), cert. denied, 476 U. S. 1170 (1986). With respect to § 502(a)(2), however, under which a beneficiary may claim both "equitable" and "remedial" relief, see 29 U. S. C. § 1132(a)(2) (allowing "for appropriate relief under section 1109 of this title"), the courts are split over whether punitive damages may be recovered. Compare Kuntz v. Reese, 760 F.2d 926, 938 (CA9 1985) (allowing such a recovery), vacated on other grounds, 785 F.2d 1410, cert. denied, 479 U. S. 916 (1986), with Sommers Drug Stores, supra, at 1463 (disallowing such a recovery); see also Cox v. Eichler, 765 F. Supp. 601, 610-611 (ND Cal. 1990) (punitive damages available under § 502(a)(2) but not under § 502(a)(3)). This Court in Russell expressly reserved judgment on whether punitive damages might be recovered on behalf of an ERISA-governed plan under § 502(a)(2). Massachusetts Mut. Life Ins. Co. v. Russell, 473 U. S. 134, 144, n. 12 (1985).
7The majority faults "[t]he notion that concern about punitive damages motivated Congress" in drafting ERISA on the grounds that the availability of punitive damages was not "a major issue" in 1974. Ante, at 257, n.7. Neither, of course, is there anything to suggest that the availability of compensatory damages was a "major issue" in 1974, although the majority does not hesitate to attribute this concern to the 93d Congress. In any event, it seems to me considerably less fanciful to suppose that Congress was motivated by a desire to limit the availability of punitive damages than that it was moved by a desire to take from the statute's intended beneficiaries their traditional and possibly their only means of makewhole relief.
insufficient grounds. The text of the statute supports a reading of § 502(a)(3) that would permit a court to award compensatory monetary relief where necessary to make an ERISA beneficiary whole for a breach of trust. Such a reading would accord with the established equitable remedies available under the common law of trusts, to which Congress has directed us in construing ERISA, and with Congress' primary goal in enacting the statute, the protection of beneficiaries' financial security against corrupt or inept plan mismanagement. Finally, such a reading would avoid the perverse and, in this case, entirely needless result of construing ERISA so as to deprive beneficiaries of remedies they enjoyed prior to the statute's enactment. For these reasons, I respectfully dissent.

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