Source: http://openjurist.org/print/33359
Timestamp: 2015-10-04 09:28:05
Document Index: 558870348

Matched Legal Cases: ['§ 501', '§ 206', '§ 409', '§ 206', '§ 206', '§ 409', '§ 206', '§ 501', '§ 514', '§ 514', '§ 206', '§ 206', '§ 1001', '§ 501', '§ 501']

Home > 493 US 365 Guidry v. Sheet Metal Workers National Pension Fund
493 US 365 Guidry v. Sheet Metal Workers National Pension Fund 493 U.S. 365
110 S.Ct. 680
107 L.Ed.2d 782
Curtis GUIDRY, Petitionerv.SHEET METAL WORKERS NATIONAL PENSION FUND et al.
Petitioner Guidry, a former official of respondent union and trustee of one of respondent pension plans, pleaded guilty to embezzling funds from the union in violation of § 501(c) of the Labor-Management Reporting and Disclosure Act of 1959 (LMRDA). Since his union employment had made him eligible for benefits from respondent plans, he filed suit in the District Court against two of the plans when they determined that he had forfeited his right to benefits as a result of his criminal activity. The union intervened, joined the third plan as a party, and stipulated with Guidry to the entry of a money judgment in its favor. The court rejected the funds' contention that Guidry had forfeited his right to benefits. It ruled, however, that a constructive trust in the union's favor should be imposed on Guidry's pension benefits until the judgment was satisfied. Reading the Employee Retirement Income Security Act of 1974 (ERISA) in pari materia with, inter alia, the LMRDA—which seeks to combat union officials' corruption and to protect membership interests—the court concluded that a narrow exception to ERISA's prohibition on assignment or alienation of pension benefits, § 206(d)(1), is appropriate where "the viability of a union and the members' pension plans was damaged by the knavery of a union official." The Court of Appeals affirmed. Relying on ERISA § 409(a)—which makes a faithless plan fiduciary personally liable for losses to the plan resulting from his breach and subjects him to other appropriate equitable or remedial relief—the court concluded that § 206(d)(1) did not preclude the imposition of the constructive trust, deeming it unlikely that Congress intended to ignore equitable principles by protecting individuals such as Guidry from the consequences of their misconduct.
Held: The constructive trust violates ERISA's prohibition on assignment or alienation of pension benefits. Pp. 371-377.
(a) The constructive trust remedy is prohibited by § 206(d)(1) unless some exception to the general statutory ban is applicable. Cf. Mackey v. Lanier Collection Agency & Service, Inc., 486 U.S. 825, 836-837, 108 S.Ct. 2182, 2188-2189, 100 L.Ed.2d 836. P. 371-372.
(b) It is unnecessary to decide whether § 409(a)'s remedial provisions supersede § 206(d)(1)'s bar, since Guidry has not been found to have breached any fiduciary duty to the pension plans. Although his actions may have harmed the union's members who were fund beneficiaries, he was convicted of stealing money only from the union, and the funds and the union are distinct legal entities. Pp. 372-374.
(c) Assuming that LMRDA § 501 authorizes the imposition of a constructive trust when a union officer has breached his fiduciary duties, that authorization does not override ERISA's anti-alienation provision. Contrary to respondents' argument, the LMRDA will not be modified, impaired, or superseded in violation of ERISA § 514(d)'s saving clause if ERISA pension plans cannot be used to effectuate the LMRDA's remedial goals. A broad reading of § 514(d) would eviscerate § 206(d)'s protections by rendering § 206(d)(1) inapplicable whenever a judgment creditor relied on the remedial provisions of a federal statute. The two statutes are more persuasively reconciled by holding that the LMRDA determines what sort of judgment the aggrieved party may obtain while ERISA governs the narrow question whether that judgment may be collected through a particular means. Pp. 374-376.
BLACKMUN, J., delivered the opinion of the Court, in which REHNQUIST, C.J., and BRENNAN, WHITE, STEVENS, O'CONNOR, SCALIA, and KENNEDY, JJ., joined, and in all but Part II-C of which MARSHALL, J., joined.
Eldon E. Silverman, Denver, Colo., for petitioner.
Joseph M. Goldhammer, Denver, Colo., for respondents.
Petitioner Curtis Guidry pleaded guilty to embezzling funds from his union. The union obtained a judgment against him for $275,000. The District Court imposed a constructive trust on Guidry's pension benefits, and the United States Court of Appeals for the Tenth Circuit affirmed that judgment. Petitioner contends that the constructive trust violates the statutory prohibition on assignment or alienation of pension benefits imposed by the Employee Retirement Income Security Act of 1974 (ERISA), 88 Stat. 829, as amended, 29 U.S.C. § 1001 et seq. (1982 ed.).1
* From 1964 to 1981, petitioner Guidry was the chief executive officer of respondent Sheet Metal Workers International Association, Local 9 (Union). From 1977 to 1981 he was also a trustee of respondent Sheet Metal Workers Local No. 9 Pension Fund. Petitioner's employment made him eligible to receive benefits from three union pension funds.2
In 1981, the Department of Labor reviewed the Union's internal accounting procedures. That review demonstrated that Guidry had embezzled substantial sums of money from the Union. See App. 20. This led to petitioner's resignation. A subsequent audit indicated that over $998,000 was missing. Id., at 26. In 1982, petitioner pleaded guilty to embezzling more than $377,000 from the Union, in violation of § 501(c) of the Labor-Management Reporting and Disclosure Act of 1959 (LMRDA), 73 Stat. 536, 29 U.S.C. § 501
Justice MARSHALL joins all but Part II-C of this opinion. (c) (1982 ed.).3 Petitioner began serving a prison sentence. In April 1984, while still incarcerated, petitioner filed a complaint against two of the plans in the United States District Court for the District of Colorado, alleging that the plans had wrongfully refused to pay him the benefits to which he was entitled.4 The Union intervened, joined the third pension plan as a party, and asserted six claims against petitioner.5 On the first five claims, petitioner and the Union stipulated to the entry of a $275,000 judgment in the Union's favor. App. 52-58. Petitioner and the Union agreed to litigate the availability of the constructive trust remedy requested in the sixth claim. Id., at 58.
Petitioner previously had negotiated a settlement with the Local No. 9 Pension Fund. Id., at 44-46.6 The other two plans, however, contended that petitioner had forfeited his right to receive benefits as a result of his criminal misconduct. Id., at 47-50. In the alternative those plans contended that, if petitioner were found to have a right to benefits, those benefits should be paid to the Union rather than to Guidry. Ibid.
The District Court therefore was confronted with three different views regarding the disbursement of petitioner's pension benefits. Petitioner contended that the benefits should be paid to him. The two funds argued that the benefits had been forfeited. The Union asserted that th