Document: 508 U.S. 581 113 S.Ct. 2252 124 L.Ed.2d 522 LOCAL 144 NURSING HOME PENSION FUND, et al., Petitioners,v.Nicholas DEMISAY al. No. 91-610. Argued Jan. 11, 1993. Decided June 14, Syllabus * For several years, respondent employers had made contributions to two trust funds (collectively, Greater Funds) on behalf of their employees. In 1984, however, the ended participation in Funds and agreed, collective-bargaining agreements with relevant union, establish a new set Southern Funds). To help finance change between funds, other respondents brought an action compel petitioners, trustees, transfer that portion Funds' reserves attributable respondents' past contributions. Respondents asserted right relief under, inter alia, § 302 Labor Management Relations Act, 1947, which prohibits payments from union representatives, §§ 302(a) (b), but affords exception under 302(c)(5) for employee fund if certain conditions are met, including be "established . sole exclusive benefit employees," "held purpose paying" benefits. Respondents' theory was that, unless employers' were transferred, would fail meet 302(c)(5)'s thus suffer "structural defect" could remedied by federal courts pursuant power conferred 302(e) "restrain violations this section." The District Court granted petitioners' motion summary judgment, finding no such Funds, Appeals reversed remanded shape appropriate remedy. Held: A court does not have authority issue injunctions against or its trustees requiring administered manner described 302(c)(5). Section provides district jurisdiction "to restrain section," violation occurs when prohibited (b) made. forth describes character allowed, leaving it originally state law, now law Employee Retirement Income Security Act 1974, determine breaches occurred how they may remedied. Language Arroyo v. United States, 359 419, 426-427, 79 864, 868-869, 3 915, NLRB Amax Coal Co., 453 322, 331, 101 2789, 2795, 69 672, is perhaps susceptible contrary reading pure dicta. Pp. ____. 935 F.2d 528, (CA2 1991), remanded. SCALIA, J., delivered opinion Court, REHNQUIST, C.J., O'CONNOR, KENNEDY, SOUTER, THOMAS, JJ., joined. STEVENS, filed concurring WHITE BLACKMUN, Henry Rose, Washington, DC, petitioners. Ronald E. Richman, New York City, respondents. Justice SCALIA Court. 1 This case presents question whether injunction 1947 (LMRA), 61 Stat. 157, as amended, 29 U.S.C. 186 (1988 ed. Supp. III), multiemployer assets established who broke away first fund. 2 include group until 1981, members bargaining association, Health Care Facilities Association, Inc. (Greater Employer Association). Two funds—the Local Nursing Home Pension Fund City Home—Local Welfare Funds)—were Association Hotel, Hospital, Allied Services Employees Union, Service International AFL-CIO (Local 144). Prior employees accordance terms negotiated 144. executed independent initial required continuing employer those concluded 1984 provided establishment Residential (Southern At approximately same time, Funds. 4 negotiating "primary concern" make sure shift cause lose 530 1991). address concern, guaranteed recognize all credited service time earned and, more generally, any benefits result withdrawal See 710 F.Supp. 58, 60-61 (SDNY 1989). That guarantee obviously created some peculiar liabilities example, nine years would, after just one year service, acquire vested rights pension 10-year vesting requirement Funds—even though received only employee. id., at 61, n. 4. assumption these liabilities, did alter obligations parties agreements: They remained liable departing 5, 65; F.2d, 530-531. 5 cover general employers—joined Funds—brought fractional share 1974 (ERISA), 1001 seq. LMRA; latter claim here. 6 portions margin.1 describe claim, necessary sketch structure provision. Subsection (a) (or association employers, Association) from, making representative employees, employees' officials. Paragraph (b)(1) "reciprocal" subsection (a), 423, 867, 915 (1959), unlawful representatives receive (a). prohibitions paragraph drawn broadly, prevent health welfare generally States Ryan, 350 299, 304-305, 76 400, 404-405, 100 L.Ed. 335 (1956); Goetz, Benefit Trusts 59 Nw.U.L.Rev. 719, 723-731 (1965). 302(c), exceptions prohibitions. Most significantly our purposes, (c)(5) excepts so long 7 cannot last quoted If do so, according respondents, will can 8 judgment. Though agreed "review challenge structurally deficient [§ 302(c)(5)'s] 'sole exclusive' standard," F.Supp., 62, found defect," since there allegation corruption further policies. Id., 64. reversed, holding "would 'structural defect' " transferred 534. It remedy guided principle fair reflecting [respondents' employees] should reallocated Funds." Ibid. We certiorari, 505 ----, 112 2990, 120 867 (1992). II 9 Both relied Second Circuit's earlier decision 50, Bakery Confectionery Workers 3, AFL-CIO, 733 229 (1984), held 'jurisdiction [section ] enforce fund's compliance statutory standards eliminating offensive features operation qualify exception.' 234 (quoting Associated Contractors Essex Cty., Laborers Int'l Union North America, 559 222, 225 (CA3 1977)). 50 below among large body conflicting cases bearing upon courts' powers supervise administration funds. number confers broad supervisory powers. See, e.g., Ponce Construction Trust California, 628 537, 541-542 (CA9 1980); Lewis Mill Ridge Coals, Inc., 298 552, 558 (CA6 1962). Others all. Ader Hughes, 570 303, 306 (CA10 1978); Bowers Ulpiano Casal, 393 421 (CA1 1968); Moses Ammond, 162 866, 871-872 1958). Still others acknowledged limited various respects. Riley MEBA Trust, 406, 412-413 1977); Knauss Gorman, 583 82, 86-87 1978). Our most recent area expressly reserved question. Mine Robinson, 455 562, 573, 12, 102 1226, 574, 71 419 (1982). 10 hold today provide By unmistakable language, "violation" substantive restrictions disobeyed, happens, fund, "pa[id], len[t], deliver[ed]" 302(a), "receive[d], accept[ed]" "request[ed], [or] demand[ed]" 302(b)(1). And relates, fact used (an unrestricted happens "for employees" qualify); rather "established," 302(c)(5), trust," 302(c)(5)(A).2 trustees' failure comply purposes breach contractual fiduciary subject them suit breach; 302.3 11 few academic commentators analogy 301 LMRA suggested has been create common governing labor contracts, see Textile Lincoln Mills Alabama, 353 448, 77 912, 972 (1957), too viewed authorizing development "a specialized administration." Developing Federal Law Plans, 55 Cornell L.Rev. 911, 930 (1970). One said, quoting Mills, U.S., 457, S.Ct., 918, "jurisdiction kind within 'penumbra express mandate' 302." Lugo Illumination Products Industry, 366 99, 103 (EDNY1973), approvingly Alvares Erickson, 514 156, 166 1975), cert. denied, 423 874, 96 143, 46 106 (1975). also Nedd 556 190, 203 1977), 434 1013, 98 727, 54 757 (1978). comparison 301(a) shows inapt. "violation contracts organization." 302(e), contrast, duties imposed fund"; rather, allows violations" 302, which, we explained, occur nonqualifying received. 12 text requires exempt prohibition, must "established" There nothing suggest ambitious establishing entire than merely describing As observed supra, 872, akin provision 401(a) Internal Revenue Code, 26 (in connection 501 III)) tax exemption employer-created as, "created [the employer's] beneficiaries." No contend govern trusts, reason reach conclusion 13 point statement 869, "[c]ontinuing explicitly enforceable civil proceedings 302(e)." 1233, (referring passage). "compliance" "made enforceable" prohibit entity established, trust, requisite purposes. But case, criminal prosecution 302(d), therefore dictum.4 Also dictum 672 (1981), later 570, 1231, "the purpose' ensure 'are legitimate actually specified contribute them. .' (Emphasis added.) obiter quotation line floor debate convert (1) exist obtain into (2) authorization obligations.5 14 Consistently general, view "sole benefit" trust" provisions neither creating nor imposing standard, simply obligation defined enforced Restatement (Second) 170(1) ERISA.6 Cf. Coal, 329-330, 2794. deny obligation. fiduciaries ERISA, so-called 1104(a)(1)(i), 1109(a) legal equitable remedies obligations. Since entities restraining future appropriate. 15 addition complaint ERISA claims, based ERISA's asset rules, 1414, above-mentioned duty provision, 1104. ruled both claims but, because ruling Neither remand, free consider 16 17 judgment consistent opinion. 18 ordered. 19 whom BLACKMUN join, 20 violate 186(c)(5) ed., III). Because unnecessarily decides authorize injunctive even petitioners violated specific I join 21 explains, ante, ____, arose withdrew agreement then sought representing 531 necessary, reasoning retention contributed 533-534; certiorari review holding. Pet. Cert. i. 22 decide narrow ground presented: refusal trusts contributing] employer," "such families, dependents jointly similar payments, families dependents." extent previous already own "employees Hence, continue operate constraints required. 23 go contributors is, course, nature plan. Such plans precisely language pooling joint participating Segregation feasible contemplated. "An employer's solely worked alone." Concrete Pipe --- 2264, 2287, ---- (1993). Stinson Ironworkers Dist. Council Ohio Vicinity 869 1014, 1021-1022 (CA7 1989) (use requirement); British Motor Car Distributors, Ltd. San Francisco Automotive Industries Fund, 882 371, 377-378 (same). 24 short, agree appearing amicus curiae, refused proportional eschews straightforward rule decision, favor far broader approach, quite unanticipated submissions parties. Without argument either litigant, reaches out overrule decades deciding my view, reinvention unwise uninvited. 25 performs distinct functions scheme. First, "safe harbor" Second, sets on-going importance illustrated involved contribution lawful thereafter diverted use. payment held, transaction fell exception, receipt 302(b). 423-424, 867. available subsequently diverted. 868-867.1 majority repudiates understanding operation, reflected 570-572, 1231-1232, (1982), "pure dictum." Ante, led us easily dismissed. explained enacted conduct once designated 424-427, 867-869. 27 "Congress believed define specificity payable thereunder, substantial danger existed might employed perpetuate control officers, political personal gain. 92 Cong.Rec. 4892-4894, 4899, 5181, 5345-5346; S.Rep. 105, 80th Cong., 1st Sess., 52; 93 4678, 4746-4747. remove dangers, assure Congress considered proper expended established. Cox, Some Aspects [61 Harv.L.Rev. 274, 290 (1947) ]. Continuing 302(e). legislative history devoid suggestion defalcating accountable except way subsection." 868-869. (footnote omitted).2 stating 'the 1231 (internal marks omitted). actual use found, "amply supported history," 571, 1232, concern "funds private faithless leaders," 572, 1232. nn. 8-10, sources cited therein. turning vehicles kick-backs racketeering, "employer employees." 1232 (emphasis added).3 28 proposition basis never questioned before today, Appeals. true, notes, precise scope authorized controversy. read "unreasonable" "arbitrary capricious" administration. Phillips Alaska Hotel Restaurant 944 509, 515 1991); at, 1019.4 narrowly, remedying "violations basic structure, determined Congress, prudence fund." 421, 424 1968). present important every assumed may, minimum, commands.5 unanimous Robinson well-established law. rejected views empower impose nonstatutory "reasonableness" eligibility criteria agreement. 1233. left open authorizes enforcement traditional trustees. 12.6 difficulty, answer today. unequivocally stated: "establish plans," Brief Petitioners 10. argue violated; contrary, cite approval Bowers, "within requirements 302(c)(5)." original). Nor ever "exclusive satisfied finally establishment; understand require "(1) types benefits; contributing employers. ." added). 30 "It clear LMRA." Ibid.7 31 seems assume confronted choice "establishing law," hand, limiting acceptance other. makes clear, need direction; court. 32 complying 302(c)(5)—if, instance, annual Red Cross—then enjoin improper diversion sensible why instead restricted enjoining (b). intended effectuated always given 302. Today's departure seriously undermines functioning statute. Court's uninvited unnecessary; radical doctrine judicial restraint. syllabus constitutes part prepared Reporter Decisions convenience reader. Detroit Lumber 200 321, 337, 282, 287, 499. part: "(a) shall pay, lend, deliver money thing value — his industry affecting commerce; "(2) organization, officer thereof, represents, seeks represent, admit membership, .; "(b)(1) person request, demand, receive, accept, payment, loan, delivery section. "(c) section applicable (5) respect paid employees], employer, dependents): Provided, (A) paying dependents, medical hospital care, pensions retirement death (B) detailed written (C) providing annuities separate therein annuities; "(e) Territories possessions jurisdiction, shown, 381 title (relating notice opposite party) section, without regard 52 title, chapter title." STEVENS asserts "uninvited," post, "quite parties" reached "[w]ithout litigant," ibid. so. Summary Argument brief began assertion prohibition." 7. subdivision elaborated point, arguing oversee plans." 8. next subdivision, entitled "Lower Courts Have Misconstrued Asserting Broad Jurisdiction over Regulation Plans," systematically criticized lower-court jurisprudence permitting regulation plans, almost Circuit. 11-18. concluded: "[T]he power, restructure regulate attacking raised here, amply discussed considerations it. evidently understood import argument. devoted topic "Federal Authority Remedy Violations Of Civil Cases." 17-19. response quotes passage different "disingenuous" characterize attack court's concludes "it perfectly longer 'held benefitting if, immediately deposit purpose." Post, 3. true "no longer" misappropriated (just form pensions), irrelevant. representative, "are satisfies (including purposes), applies (1959). official receiving begun diverting 422, 866. Indeed, evidence properly support inference [union official's] outset [contributions fund] use." Nevertheless, 302(c)." deemed purpose" purpose. criticizes relying "half" while disregarding "half," see, 1, adhere holding, disregard, dictum. While dispute dictum, he argues [that] dismissed." ____ disagree. (set concurrence, ____), "reasoning" consisted leaping correct premise, used, entirely unsupported conclusion, means limitation enforced. ipse dixit, reasoned conclusion—and, boot, dixit contradicted very pronounced. malfeasance liability nonetheless liability. STEVENS' concluding words restraint." refuted 2. His lack-of-restraint criticism principally directed, "departure [the] understanding" dicta cases—such excerpt (1982) (STEVENS, J.), topsy-turvy version was, anything, themselves—uninvited, unargued, unnecessary holdings—which insulted virtue; add injury insult precedential effect. Title 1104(a)(1) III) provides: "[A] discharge plan interest participants beneficiaries and—(A) of: (i) beneficiaries; (ii) defraying reasonable expenses administering plan." relies heavily half note here ibid.; reliance abuses supports conclusion. event, what diverted, When characterizes "leaping" "entirely conclusion," 4, ignores abundant Stewart's belabor (as today) undisputed, noted creates According majority, relate established; hence, fulfilled entirely, ever, establishment. Even question, depart majority; More important, clearly terms, demand basis. 302(c)(5)(B) (employees equally represented administration); 302(c)(5)(C) (payments trust). obvious 302(e)—a largely overlooked majority—is vehicle enforcing obligations, "broad jurisdiction" "restructure precisely, position take pages brief, ibid., collectively bargained term reasonableness 19; 18. disingenuous, say least, "attacking funds," 6, infra. 424, 529 251, 254-256 1976); Sheet Metal Workers' Jersey Gallagher, 960 1195, 1210 1992); Seafarers Plan Sturgis, 630 218, 220-221 (CA4 Johnson Franco, 727 442, 446-447 (CA5 1984); Sellers O'Connell, 701 575, 577 1983); 1019 1989); Holcomb Assn. St. Louis, 852 330, 332-335 (CA8 1988); 306-308 Central Florida Assn., NLRB, 664 489, 498 1981); Tool Co. Machinists Nat. 258 U.S.App.D.C. 309, 77, 811 651, 664, (1987). answers Petitioners, decided decision. Notwithstanding protestations 2, Had challenged Robinson—and constituted merit discrimination "unreasonable." words, framework post-Arroyo Whether label "dicta," appropriately applied proposition, interpretation statute accepted uniformly bar, judiciary, three decades, 1959. adhering settled rules undergirds doctrines stare decisis

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