Document: 489 U.S. 101 109 S.Ct. 948 103 L.Ed.2d 80 FIRESTONE TIRE AND RUBBER COMPANY, et al., Petitionersv.Richard BRUCH, etc., al. No. 87-1054. Argued Nov. 30, 1988. Decided Feb. 21, 1989. Syllabus Petitioner Firestone Tire & Rubber Co. (Firestone) maintained, and was the plan administrator fiduciary of, a termination pay two other unfunded employee benefit plans governed by Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1001 seq. After sold its Plastics Division to Occidental Petroleum (Occidental), respondents, employees who were rehired Occidental, sought severance benefits under plan, but denied their requests on ground that there had not been "reduction in work force" would authorize plan's terms. Several respondents also information about all three pursuant 1024(b)(4)'s disclosure requirements, those no longer "participants" entitled ERISA. Respondents then brought suit for 1132(a)(1)(B) damages §§ 1132(a)(1)(A) (c)(1)(B) based Firestone's breach statutory obligation. The Federal District Court granted summary judgment Firestone, holding company satisfied duty as because decision arbitrary or capricious, it obligation they within meaning 1002(7) at time requested information. Appeals reversed remanded, denials should be subject de novo judicial review rather than capricious standard where employer is itself an since deference unwarranted situation given lack assurance impartiality employer's part. held right extends both people are claim be, not, so entitled. Held: 1. De appropriate reviewing denial respondents. Pp. 108-115. (a) standard—which developed Labor Management Relations Act, 1947 (LMRA) adopted some federal courts actions light ERISA's failure provide section—should imported into ERISA wholesale basis. raison d'etre LMRA standard—the need jurisdictional basis suits against joint labor-management pension trustees whose decisions expressly made reviewable LMRA—is present ERISA, which explicitly authorizes fiduciaries administrators remedy violations, including breaches compliance with plans. Without this analogy, principles offer support adoption insofar concerned. 108-110. (b) Principles law trusts—which must guide determination language legislative history Court's interpreting statute establish challenged reviewed unless gives discretionary authority determine eligibility construe terms, cases deferential appropriate. latter exception cannot aid evidence has power uncertain terms determinations deference. argument interpretation inherently belied settled trust whereby agreements without deferring either party's interpretation. Moreover, provisions define one "exercises any authority," give him control over operation administration, require he "full fair review" interpreted empower exercise his manner. Adopting afford beneficiaries less protection received pre-ERISA cases, applied plans, result Congress could have intended stated purpose "promot[ing] interest beneficiaries." fact that, after passage, failed act upon bill amend 1132 does indicate congressional approval most courts, bill's demise may resulted from events having nothing do Congress' views relative merits standards, subsequent form hazardous inferring intent earlier one. assertion impose higher administrative litigation costs thereby discourage employers creating contravention spirit likewise unpersuasive, foreclose parties agreeing narrower review, threat increased sufficient outweigh reasons standard. Those concern guided Appeals, applies regardless whether issue funded operating conflict interest. If discretion such official, however, weighed factor determining abuse discretion. 110-115. 2. A "participant" 1024(b)(4) disclose 1132(c)(1)(B) include person merely claims benefit. Appeals' contrary strays far language, say "claimants" disclosure; begs question "participant"; renders definition superfluous. Rather, "any former . become eligible" naturally read mean in, reasonably expected currently covered employment, reasonable expectation returning employment colorable vested benefits. claimant (1) will prevail benefits, (2) requirements fulfilled future order "may eligible." This view attributes conventional meanings phrase clearly encompasses simply apply neither nor enacting provisions—ensuring individual participant knows exactly stands—will thwarted natural reading "participant," rational faced possibility $100-a-day penalties likely opt if doubt participant, especially required producing Department regulations. Since did attempt respect information, remand. 115-118. 828 F.2d 134 (CA 3 1987), affirmed part, remanded. O'CONNOR, J., delivered opinion unanimous Parts I II, Part III, REHNQUIST, C.J., BRENNAN, WHITE, MARSHALL, BLACKMUN, STEVENS, KENNEDY, JJ., joined, except SCALIA, J. filed concurring part judgment, post, p. 119. Martin Wald, Philadelphia, Pa., petitioners. David M. Silberman, Washington, D.C., respondent. Christopher Wright, United States, amicus curiae, supporting special leave Court. Justice O'CONNOR 1 case presents questions concerning 88 Stat. 829, amended, First, we address Second, persons obtain 2 * Late 1980, petitioner Company sold, going concerns, five plants composing (Occidental). Most approximately 500 salaried continued same positions interruption rates pay. At sale, maintained welfare employees: retirement stock purchase plan. sole source funding established separate funds out All "employee plans" (albeit different ways) By law, administrator, 1002(16)(A)(ii), fiduciary, 1002(21)(A), each these "unfunded" sale Division, aware therefore set up procedure, 1133, complied reporting obligations, 1021-1031, Respondents, six In relevant provides follows: 4 "If your service discontinued prior you eligible released reduction force physically mentally unable perform job. 5 "The amount receive depend period credited service." 6 regarding certain provisions. See 1024(b)(4), 1025(a). constitute addition, concluded 7 class action behalf "former, salaried, non-union worked comprised Firestone." Complaint ¶ 9, App. 94. 1132(a)(1), "civil beneficiary [of plan] (A) relief provided [§ 1132(c) ], [and] (B) recover due plan." Count complaint, alleged constituted &Par; 23-44, 98-104. VII, breached obligations 87-94, 104-106. 8 motion judgment. 640 F.Supp. 519 (ED Pa.1986). With I, capricious. Id., 521-526. although imposes respond written only participants beneficiaries. Under type 1002(7). "a designated thereunder." 1002(8). "beneficiaries" Firestone. F.Supp., 534. 9 grant Counts VII. (CA3 1987). acknowledged 138 (citing cases). It noted, softened bias adverse 138-140. See, e.g., Jung v. FMC Corp., 755 708, 711-712 (CA9 1985) (where "the avoids very considerable outlay [by employer], court consider applying review," "[l]ess trustee's decision"). deny review. reasoned situations employer. F.2d, 137-145. request "most sensibly extend[s] not." 153. Because legal standards granting favor remanded further proceedings consistent opinion. 10 We certiorari, 485 986, 108 1288, 99 498 (1988), resolve conflicts among Courts term now affirm reverse remand proceedings. II 11 panoply remedial devices" Massachusetts Mutual Life Ins. Russell, 473 134, 146, 105 3085, 3092, 87 96 (1985). Respondents' asserting 1132(a)(1)(B). That provision allows enforce rights declaratory entitlement contract. discussion follows limited challenging interpretations. express A. 12 Although "comprehensive reticulated statute," Nachman Corp. Pension Benefit Guaranty 446 359, 361, 100 1723, 1726, 64 354 (1980), determinations. To fill gap, 61 157, 186(c), (LMRA). Struble New Jersey Brewery Employees' Welfare Trust Fund, 732 325, 333 1984); Bayles Central Southeast Southwest Areas 602 97, 99-100, n. (CA5 1979). general incorporate much see NLRB Amax Coal Co., 453 322, 332, 2789, 2795-2796, 69 672 (1981), like LMRA, loyalty administrators, argues actions. Brief Petitioners 13-14. comparison shows importation unwarranted. 13 186(c) unions jointly contributions "for exclusive families dependents." trustees. and, more importantly, means jurisdiction Van Boxel Journal Trust, 836 1048, 1052 (CA7 1987) ("[W]hen effect denying application unreasonably, came said, arbitrarily capriciously, hold 'structured' employees, violated ] )." Comment, Arbitrary Capricious Standard ERISA: Its Origins Application, 23 Duquesne L.Rev. 1033, 1037-1039 Unlike 1132(a), 1132(f). generally Pilot Dedeaux, 481 41, 52-57, 107 1549, 1555-1558, 95 39 (1987) (describing scope 1132(a)). Thus, trustees—is Note, Judicial Review Fiduciary Claim Denials An Alternative Test, 71 Cornell 994, 40 (1986). B 14 abounds terminology law. ("participant"), 1002(8) ("beneficiary"), 1002(21)(A) ("fiduciary"), 1103(a) ("trustee"), 1104 ("fiduciary duties"). confirms Act's responsibility provisions, 1101-1114, "codif[y] mak[e] applicable [ERISA] evolution trusts." H.R.Rep. 93-533, (1973), U.S.Code Cong. Admin.News 1974, pp. 4639, 4649. Given history, develop "federal common ERISA-regulated plans." supra, 56, S.Ct., 1558. Franchise Tax Board Construction Laborers Vacation 463 1, 24, 26, 2841, 2854, 77 420 (1983) (" '[A] body substantive deal issues involving private plans' ") (quoting 129 Cong.Rec. 29942 (1974) (remarks Sen. Javits)). 1132(a)(1)(B), Fund Transport, Inc., 472 559, 570, 2833, 2840, 86 447 15 make when trustee exercises powers. Restatement (Second) Trusts 187 (1959) ("[w]here conferred power, prevent discretion"). G. Bogert Bogert, Law Trustees 560, 193-208 (2d rev. ed. 1980). disputed doubtful circumstances disturbed reasonable. 169-171. Whether permissive mandatory depends trust." W. Fratcher, Scott 187, (4th 1988). Hence, century ago remarked "[w]hen existence, capable acting, equity interfere them instrument act." Nichols Eaton, 91 716, 724-725, L.Ed. 254 (1875) (emphasis added). U.S., 568, 2839 ("The trustees' documents access records here dispute significant weight, agreement 'any construction agreement's provisions] good faith shall binding Union, Employees, Employers' "). can seek shelter 24-25; Reply 7, 2; States Amicus Curiae 14-15, 11. 16 Finding standard, matter function. But point interpretations, belie contention. As contractual extent duties powers determined rules situation, attorney believes applicable, interpret them, himself attorney." 201, 221 protect obtaining instructions court. 162-168; Comment b (1959). Mason, 412 391, 399, 93 2202, 2208, 37 22 (1973). trusts created instruments "determined intention settlor inadmissible." 4, d 17 enactment Actions before contract final employee's claim— looking manifestations parties' intent. Conner Phoenix Steel 249 A.2d 866 (Del.1969); Atlantic Kitchens, 228 Ga. S.E.2d 824 (1972); Sigman Rudolph Wurlitzer 57 Ohio N.E.2d 878 (1937). 18 Despite pointing respondents', us claims. defines respecting management [a] disposition assets." 1002(21)(A)(i). "authority manage administration plan," 1102(a)(1), denials, 1133(2). From concludes empowered manner arbitrariness capriciousness. relied heavily characterize entirely control. Cf. Mine Workers America Health Funds Robinson, 455 562, 573-574, 102 1226, 1232-1233, 419 (1982) (common alter nondiscretionary agreement). 19 enacted "to promote interests plans," Shaw Delta Airlines, 85, 90, 2890, 2896, 490 (1983), contractually defined benefits," 148, 3093. (setting forth findings declarations policy ERISA). enjoyed enacted. Nevertheless, maintains passage indicates introduced providing H.R. 6226, 97th Cong., 2d Sess. (1982), reprinted Legislation: Hearings 1614 Sub-committee Labor-Management House Committee Education Labor, Sess., 60 (1983). never enacted, asserts conclude 19-20. think bit inaction carries day Though "instructive," proposed conclusive Bowsher Merck 460 824, 837, 12, 1587, 1595, 75 580 propriety more, ascribe acquiescence "[T]he one." Price, 361 304, 313, 326, 334 (1960). 20 amici assert contravene American Council Insurance Amici 10-11. even assumption seems encourage participants, wish Neither impartial decisionmaking, forecloses already explained. 21 aptly demonstrates, validity turn issue. Consistent rest our 143-146, distinguish between types focus motivations fiduciaries. purposes possible actual Of course, interest, "facto[r] discretion." III unsuccessfully reads shall, beneficiary, furnish copy latest updated description, annual report, terminal bargaining agreement, contract, operated. charge cover cost furnishing complete copies. Secretary Labor] regulation prescribe maximum preceding sentence." 24 When comply (1982 ed., Supp. IV), "[a]ny fails refuses subchapter court's personally liable $100 day." 25 87-95, centers found 1002(7): 26 'participant' employer, member organization, covers members benefit." 27 noted 1132(a)(1) "by beneficiary." illogical bring she " 'a civil someone beneficiary.' 152. went 1024(b)(4): "A one, entitling extend 28 "concede[d] expensive inefficient benefits—and permit withheld—if informed." Ibid. tried solve dilemma suggesting use award bad faith. There is, fundamental problem "participant": language. Indeed, admitted oral words [them]." Tr. Oral Arg. 40. view, "employees employment," Saladino I.L.G.W.U. National 754 473, 476 (CA2 1985), "have employment" claim" Kuntz Reese, 785 1410, 1411 (CA9) (per curiam), cert. denied, 479 916, 318, 291 future. "This 'may eligible.' fit [phrase] 476. 30 stands 1978, 4649—will "participant." Faced 1132(c)(1)(B), recovered. CFR 2520.104b-30(b) (the "charge assessed equal per page least acceptable reproduction, event exceed cents page"). 31 152-153. best left 32 For above, 33 So ordered. 34 join agree reasoning III. 35 holds eligible' benefits" because, reasons, raises "he benefits." Ante, 117. portion definition, refers "who obvious parallelism here: become" acquiring, future, characteristic "is" possesses. And find normal usage "being" consists "having prevailed Eligibility exists during brief formal payment yet adjudicated similarly, be. probabilities winning suit. properly read, embraces vested, (by reason current employment) potential vesting though not. 36 Applying fashion mean, guesses paying assessable obligation, IV). Since, sensible enough consult senseless take risk, giving produce precisely incentive

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