Legal Document

517 U.S. 882116 S.Ct. 1783135 L.Ed.2d 153 LOCKHEED CORP. et al.v.SPINKCertiorari to the United States Court of Appeals for Ninth Circuit. No. 95-809. Supreme Argued April 22, 1996 Decided June 10, Syllabus* Because respondent Spink was 61 when petitioner Lockheed Corporation reemployed him in 1979, he excluded from participation Lockheed's retirement plan (Plan), as then permitted by Employee Retirement Income Security Act 1974 (ERISA). Section 9203(a)(1) Omnibus Budget Reconciliation 1986 (OBRA) repealed ERISA's age-based exclusion provision, and Section(s) 9201 9202 amended ERISA Age Discrimination Employment 1967 (ADEA), respectively, prohibit benefit accrual rules. To comply with OBRA, made other previously employees Plan members, but clear that they would not receive credit their pre-1988 service years. subsequently added two programs offering increased pension benefits who retire early exchange waiver any employment claims against Lockheed. Not wishing waive ADEA or claims, declined participate retired without earning extra benefits. He filed suit, alleging among things board directors members violated amending create programs, Committee implementing Plan, OBRA amendments required Spink's years be counted toward his The District dismissed complaint failure state a claim, reversed relevant part. In finding unlawful under 406(a)(1)(D)--which prohibits fiduciary causing engage transaction transfers assets to, involves use of, party interest--the court decided there no need address status fiduciary. It also found refusal amendments, which applied retroactively. Held: 1. 406 does prevent an employer conditioning receipt upon participants' claims. Pp. 4-13. (a) Unless plaintiff shows caused allegedly transaction, can 406(a)(1) violation warranting relief. Cf. Peacock v. Thomas, 516 U. S. ___, ___. Thus, erred asking whether existed this case before 406(a)(1)(D) violation. 5-6. (b) directors, sponsors, were acting fiduciaries Plan. Given definition applicability duties attending status, rule announced respect amendment welfare plans Curtiss-Wright Corp. Schoonejongen, 514 applies equally plans. employers sponsors adopt, modify, terminate plans, do act fiduciaries, id., are analogous settlors trust. 7-9. (c) is necessary decide Comittee acted because payment pursuant terms otherwise lawful ``transaction'' prohibited 406(a)(1)(D). That section direct include employer's And "transactions" provisions 406(a) generally involve uses potentially harmful plan. conditioned on performance participants cannot reasonably said share characteristic. 9-13. 2. 9202(a) apply retroactively require calculating Congress expressly provided, 9204(a)(1), effective beginning after January 1, 1988. Since amendments' temporal effect manifest statute's face, "there resort judicial default rules," Landgraf USI Film Products, Inc., 511 inquiry at end. 13-15. 60 F. 3d 616, remanded. J., delivered opinion Court, Rehnquist, C. Stevens, O'Connor, Scalia, Kennedy, Ginsburg, JJ., joined, all Part III-B Souter Breyer, joined. concurring part dissenting part, Souter, Justice Thomas Court. 1 case, we program release employment-related constitutes (ERISA), 88 Stat. 829, amended, 29 1001 seq. We determine 81 602, 621 seq., forbidding discrimination I. 2 Respondent Paul employed 1939 until 1950, left work one competitors. persuaded return. old resumed At time, Certain Salaried Individuals defined plan, over age hired. This ERISA. See 1052(a)(2)(B) (1982 ed.). 3 passed (OBRA), Pub. L. 99-509, 100 1874. provision ERISA, statute now flatly mandates "[n]o may exclude (on basis age) have attained specified age." 1052(a)(2). Sections 1973-1978, cessations accruals reductions rates. 1054(b)(1)(H)(i), 623(i)(1). 4 effort these new laws, ceased its prior practice December 25, As date, employees, including Spink, had been ineligible due time hiring became clear, however, it those rendered members. 5 When later faced streamline operations, provide financial incentives certain early. established both offered early, payable out Plan's surplus assets. Both condition might Though eligible did wish retired, doing so. 6 brought individual capacity behalf others similarly situated, several officers. Among things, alleged duty care provisions, 1104(a), 1106(a), programs. Relatedly, Committee, implemented board, same parts asserted count accrued For violations, sought monetary, declaratory, injunctive relief 502(a)(2) (3) civil enforcement 1132(a)(2), (3). moved dismiss granted motion. 616 (1995). held 7 Circuit 406(a)(1)(D), 1106(a)(1)(D), interest interest. reasoned constituted "purchase" significant 3d, 624. Id., 623, n. 5. addition, agreed refusing 1988 determining so holding, 620, issued writ certiorari, ___ (1996), reverse. II. 8 Nothing requires establish employee Nor mandate what kind must if choose such Shaw Delta Air Lines, 463 85, 91 (1983); Alessi Raybestos-Manhattan, 451 504, (1981). does, seek ensure will empty-handed once guaranteed them Nachman Pension Benefit Guaranty Corporation, 446 359 (1980), enacted "wanted . mak[e] sure worker has promised retirement--and fulfilled whatever conditions obtain vested benefit--he actually it." 375. Accordingly, tries "make possible fund [will] adequate" meet expected payments. Ibid. 9 increase chances able honor commitments--that is, guard possibility bankrupt funds--Congress incorporated key measures into Act. 302 sets minimum annual funding levels covered see 1082(a), 1082(b), creates tax liens favor met, 1082(f). 404 409 impose respectively management existing trust funds, along liability breach duty, fiduciaries. 1109(a). Finally, involving kinds business deals. 1106. last feature issue today. 10 "to bar categorically [is] likely injure plan." Commissioner Keystone Consol. Industries, 508 152, 160 (1993). mandates, "[a] shall cause knows should know indirect transfer interest, 1106(a)(1)(D).1 question here prevents following reasons, hold not. III. 11 regulates conduct placing transactions outside scope authority. violates rules set forth 406(a)(1), renders personally liable losses incurred ill-gotten profits, equitable remedial deemed appropriate court. But order sustain transgression 406(a), show transaction.2 make showing, warrant provisions. __, __ (1996) (slip op., 3-4) ("Section 502(a)(3) `does not, all, authorize "appropriate relief" large, only purpose "redress[ing any] violations enforc[ing] provisions" ERISA'") (quoting Mertens Hewitt Associates, 248, 253 (1993)). 406(a)(1)(D).3 A. 12 first allegation breached adopted establishing alter fall category (1995), "[e]mployers free reason plans." 4) (citing Adams Avondale 905 2d 943, 947 (CA6 1990)). undertake actions, S., ___), trust, Johnson Georgia-Pacific Corp., 19 1184, 1188 (CA7 1994). 13 rooted text 1002(21)(A) (quoted 2, supra). Second observed, "only fulfilling functions, exercise discretionary authority control administration," person become 3(21)(A). Siskind Sperry Program, Unisys, 47 498, 505 "[B]ecause [the] functions [in fiduciary] design, amend being subject review." recently recognized very point, noting "it true terminating `management' `administration.'" Varity Howe, (1995) 15). noted above, fact much Curtiss-Wright, least 14 why extended Indeed, compelling reasons cases most Courts done.4 makes distinction between persons exercising speaks simply "fiduciary plan," 1002(21)(A), "management" "administration" "such ibid. defines "plan" either both. 1002(3). Likewise, phrased general equal force See, e.g., 1104(a) (specifying plan"). (ERISA "sets various uniform standards, concerning responsibility, plans"). attend think regarding capacity--including settlor-fiduciary distinction--should alike. 15 settlor 406(a)'s requirement met. While portions govern see, 1054(g) (amendment decrease benefits); 1085b (if adoption results underfunding sponsor post security amount deficiency), trigger B. 16 rules, holding making requisite status. us paid according engaged 17 "transaction" "constitutes 1106(a)(1)(D). reads where received interest--in employer--is merely "natural inciden[t] administration Brief 10. Lockheed, hand, maintains administrator's beneficiaries plan5 wholly Reply Petitioners agree 18 administrator. surrounding suggest sense used term 406(a). forbids engaging "sale," "exchange," "leasing" property, 1106(a)(1)(A); "lending money" "extension credit," 1106(a)(1)(B); "furnishing goods, services, facilities," 1106(a)(1)(C); "acquisition real property," 1106(a)(1)(E), 1108(b) (listing similar types "transactions"). These commercial bargains present special risk struck insiders, presumably arms-length. 160. What identified thus common 160-161 (reasoning unencumbered property applying obligation fell within 406(a)(1)'s companion 26 4975, could "jeopardize ability pay benefits"). According Appeals, meaning created "significant benefit" concedes, "incidental" legitimate operation attracting retaining paying deferred compensation, settling avoiding strikes, providing compensation increasing wages, turnover, reducing likelihood lawsuits encouraging laid off depart voluntarily. 11. 20 how obtaining waivers meaningfully distinguished admittedly permissible objectives. Each involves, bottom, quid pro quo participant: promises some employee. By admission, ask continue employer, cross picket line, execution functionally different; like conditions, performs return Certainly, distinguishing valid invalid quo. "leaves th[e] question" content private parties creating [T]he parties, Government, level benefits").6 Furthermore, avoid litigation result laying enticing stands protect itself suits arising have.7 21 short, precise boundaries prohibition logically encompass: pays terms. read context becomes 406(a)(1). A standard allows agreements others, suggests, lacks 406(a)(1)(D); little guidance lower courts regardless benefits, constitute transaction.8 IV. 22 retroactively.9 Two Terms ago, proper approach retroactive (1994). stated "[w]hen implicates federal events court's task prescribed reach." 36). plainly delineated ADEA. 23 9204(a)(1) provides "[t]he sections 1988, hour year apply." 623 note. language compels conclusion prospective. began amendments; further, entitled protection amendments. using Where, here, 36), 24 Notwithstanding clarity believed application deny during based age, even though reasoned, reduce rate employee.10 620. includes specifically addresses statute, trumps inferences drawn substantive statute. Morales Trans World Airlines, 504 374, 384 (1992); Fourco Glass Co. Transmirra Products 353 222, 228-229 (1957). Even disregard express limitations more language, bear weight Appeals' construction. reduction total thing accrual; former final outcome calculation, whereas latter factors equation. 25 judgment reversed, remanded further proceedings consistent opinion. ordered. 27 djq whom joins, 28 I join Court's except "the transaction." Ante, 13. legal addressed difficult one, answer development courts, interested experienced highly technical, important matters views. follow suggestion Solicitor General reach case. * syllabus prepared Reporter Decisions convenience reader. Detroit Lumber Co., 200 321, 337. 408 enumerates specific exceptions prohibitions 406. 1108(b). argue pertain 3(21)(A) provides: "[A] extent (i) exercises respecting disposition assets, (ii) investment advice fee indirect, moneys responsibility so, (iii) 1002(21)(A). Instead pursuing inquiry, "party interest" 3(14)(C), "a benefitted impermissible ERISA." 316, proposition, relied statements 248 (1993), "ERISA contains imposing obligations nonfiduciaries," 253-254; 254, 406(a)), "[p]rofessional providers disgorge profits obtained through parties-in-interest 406," 262. Reich Stangl, 73 1027, 1031-1032 (CA10 1996), cert. pending, 95-1631; Landwehr DuPree, 72 726, 733-734 (CA9 1995); Compton, 57 270, 285 (CA3 1995). Insofar (which event dicta, since issue) established--which, discussed, showing question. necessarily wrong saying ERISA" (emphasis added); (CA2 Averhart US WEST Management 46 1480, 1488 1994); Fletcher Kroger 942 1137, 1139-1140 1991); Hozier Midwest Fasteners, 908 1155, 1160-1162 1990) cases); Sutton Weirton Steel Div. Nat. 724 406, 411 (CA4 1983), denied, 467 1205 (1984). notes, 13; 7, 4, claim resulted participation, funding, vesting requirements 1051-1061 (participation vesting); 1081-1086 (funding). law approves Older Workers Protection Act, 101-433, 104 983 (1990), establishes enforceability 626(f). Of course, particular applicable law, separate arrangement absent clearer indication than reluctant infer bars affirmatively sanctioned statutes. amicus suggests long employee's labor, Amicus Curiae 15-16. Government contradicts own examples gives instance, recognizes "[a]n incentive retirement." 20. themselves compensate services distinct leaving company sooner planned. help identifying If sham meant disguise involved kickback scheme, different us. cover illegal violative performed date." 9204(b), 1980. acknowledged fully complied admitting member day year. 1054(b)(1)(H)(i) (OBRA 9202(a)) (defined "if, ceased, employees's reduced, attainment age"); 623(i)(1)(A) 9201) (forbidding maintaining "requires permits cessation accrual, accrual").

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