Court Opinion

ID: 9430151
Source: CourtListenerOpinion
Date Created: 2023-08-02 23:29:04.807333+00
Date Added: 2024-06-11T17:23:23.344924
License: Public Domain

Justice Brennan,
with whom Justice White, Justice Marshall, and Justice Blackmun join, concurring in the judgment.
Section 502(a) of the Employee Retirement Income Security Act of 1974 (ERISA), 29 U. S. C. § 1132(a), provides a wide array of measures to employee-benefit plan participants and beneficiaries by which they may enforce their rights under ERISA and under the terms of their plans. A partici*149pant or beneficiary may file a civil action, for example, (1) “to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan,” § 502(a)(1)(B); (2) “for appropriate relief under section 409,” § 502(a)(2); and (3) “to enjoin any act or practice which violates any provision of this title or the terms of the plan, or . . .to obtain other appropriate equitable relief. . .to redress such violations,” § 502(a)(3) (emphasis added).1
This case presents a single, narrow question: whether the §409 “appropriate relief” referred to in § 502(a)(2) includes individual recovery by a participant or beneficiary of extra-contractual damages for breach of fiduciary duty. The Court of Appeals for the Ninth Circuit held that, because §409 broadly authorizes “such other equitable or remedial relief as the court may deem appropriate,”2 participants and benefi*150ciaries may recover such damages under that section. 722 F. 2d 482, 488-489 (1983). I agree with the Court’s decision today that §409 is more fairly read in context as providing “remedies that would protect the entire plan” rather than individuals, ante, at 142, and that participants and beneficiaries accordingly must look elsewhere in ERISA for personal relief. Indeed, since § 502(a)(3) already provides participants and beneficiaries with “other appropriate equitable relief. . . to redress [ERISA] violations,” there is no reason to construe §409 expansively in order to bring these individuals under the penumbra of “equitable or remedial relief.”
This does not resolve, of course, whether and to what extent extracontractual damages are available under § 502(a)(3). This question was not addressed by the courts below and was not briefed by the parties and amici. Thus the Court properly emphasizes that “we have no occasion to consider whether any other provision of ERISA authorizes recovery of extracontractual damages.” Ante, at 139, n. 5. Accordingly, we save for another day the questions (1) to what extent a fiduciary’s mishandling of a claim might constitute an actionable breach of the fiduciary duties set forth in § 404(a), and (2) the nature and extent of the “appropriate equitable relief... to redress” such violations under § 502(a)(3).
There is dicta in the Court’s opinion, however, that could be construed as sweeping more broadly than the narrow ground of resolution set forth above. Although the Court *151takes care to limit the binding effect of its decision to the terms of §4093 its opinion at some points seems to speak generally of whether fiduciaries ever may be held personally liable to beneficiaries for extracontractual damages.4 Moreover, some of the Court’s remarks are simply incompatible with the structure, legislative history, and purposes of ERISA. The Court’s ambiguous discussion is certainly subject to different readings, and in any event is without controlling significance beyond the question of relief under §409. I write separately to outline what I believe is the proper approach for courts to take in construing ERISA’s provisions and to emphasize the issues left open under today’s decision.

Fiduciary Duties in Claims Administration

There is language in the Court’s opinion that might be read as suggesting that the fiduciary duties imposed by ERISA on plan administrators for the most part run only to the plan itself, as opposed to individual beneficiaries. See ante, at 142-144. The Court apparently thinks there might be some significance in the fact that an administrator’s fiduciary duties “are described in Part 4 of Title 1 of the Act . . . whereas the statutory provisions relating to claim procedures are found in Part 5.” Ante, at 143. Accordingly, the Court seems to believe that the duties and remedies associated with claims processing might be restricted to those explicitly spelled out in §§ 502(a)(1)(B) and 503. Ante, at 142-144.
To the extent the Court suggests that administrators might not be fully subject to strict fiduciary duties to participants and beneficiaries in the processing of their claims and *152to traditional trust-law remedies for breaches of those duties, I could not more strongly disagree. As the Court acknowledges in a footnote, ante, at 142, n. 9, § 404(a) sets forth the governing standard that “a fiduciary shall discharge his duties with respect to a plan solely in the interest of the participants and beneficiaries and — (A) for the exclusive purpose of: (i) providing benefits to participants and their beneficiaries.”5 That section also provides that, in carrying out these duties, a fiduciary shall exercise “the care, skill, prudence, and diligence” of a “prudent man acting in like capacity.” The legislative history demonstrates that Congress intended by § 404(a) to incorporate the fiduciary standards of trust law into ERISA,6 and it is black-letter trust law that fiduciaries *153owe strict duties running directly to beneficiaries in the administration and payment of trust benefits.7 The legislative history also shows that Congress intended these fiduciary standards to govern the ERISA claims-administration process.8
Moreover, the Court’s suggestion concerning the distinction between Parts 4 and 5 of Title I is thoroughly unconvincing. Section 502(a)(3) authorizes the award of “appropriate equitable relief” directly to a participant or beneficiary to “redress” “any act or practice which violates any provision of this title or the terms of the plan.”9 This section and *154§404(a)’s fiduciary-duty standards both appear in Title I, which is entitled “PROTECTION OF EMPLOYEE BENEFIT RIGHTS.” A beneficiary therefore may obtain “appropriate equitable relief” whenever an administrator breaches the fiduciary duties set forth in § 404(a).10 Accordingly, an administrator’s claims-processing duties and a beneficiary’s corresponding remedies are not at all necessarily limited to the terms of §§ 502(a)(1)(B) and 503. In light of the Court’s narrow holding, see ante, at 139, n. 5, further consideration of these important issues remains open for another day when the disposition of a controversy might really turn on them.

Judicial Construction of ERISA

Russell argues that a private right of action for beneficiaries and participants should be read into § 409. Because the Court has concluded that Congress’ intent and ERISA’s overall structure restrict the scope of §409 to recovery on behalf of a plan, ante, at 139-142, such a private right is squarely barred under the standards set forth in Cort v. Ash, 422 U. S. 66, 78 (1975).11
*155In disposing of this relatively straightforward issue, the Court makes some observations about the role of courts generally in construing and enforcing ERISA. The Court suggests, for example, that Congress “crafted” ERISA with “carefully integrated” remedies so as to create an “interlocking, interrelated, and interdependent remedial scheme” that courts should not “tamper with.” Ante, at 146, 147.
The Court’s discussion, I say respectfully, is both unnecessary and to some extent completely erroneous. The Court may or may not be correct as a general matter with respect to implying private rights of action under ERISA; as the respondent has sought such an implied right only under §409,12 we of course cannot purport to resolve this question in the many other contexts in which it might arise under the statute. Moreover, the Court’s remarks about the constrictive judicial role in enforcing ERISA’s remedial scheme are inaccurate insofar as Congress provided in § 502(a)(3) that beneficiaries could recover, in addition to the remedies explicitly set forth in that section, “other appropriate equitable relief ... to redress” ERISA violations. Congress already had instructed that beneficiaries could recover benefits, obtain broad injunctive and declaratory relief for their own personal benefit or for the benefit of their plans, and secure attorney’s fees, so this additional provision can only be read precisely as authorizing federal courts to “fine-tune” ERISA’s remedial scheme. Thus while it may well be that courts generally may not find implied private remedies in ERISA, the Court’s remarks have little bearing on how courts are to go about construing the private remedy that Congress explicitly provided in § 502(a)(8).
*156The legislative history demonstrates that Congress intended federal courts to develop federal common law in fashioning the additional “appropriate equitable relief.” In presenting the Conference Report to the full Senate, for example, Senator Javits, ranking minority member of the Senate Committee on Labor and Public Welfare and one of the two principal Senate sponsors of ERISA, stated that “[i]t is also intended that a body of Federal substantive law will be developed by the courts to deal with issues involving rights and obligations under private welfare and pension plans.”13 Senator Williams, the Committee’s Chairman and the Act’s other principal Senate sponsor, similarly emphasized that suits involving beneficiaries’ rights “will be regarded as arising under the laws of the United States, in similar fashion to those brought under section 301 of the Labor Management Relations Act.”14 Section 301, of course, “authorizes federal courts to fashion a body of federal law” in the context of collective-bargaining agreements, to be derived by “looking at the policy of the legislation and fashioning a remedy that will effectuate that policy.” Textile Workers v. Lincoln Mills, 353 U. S. 448, 451, 457 (1957).15 ERISA’s legislative history also demonstrates beyond question that Congress intended to engraft trust-law principles onto the enforcement *157scheme, see n. 6, supra, and a fundamental concept of trust law is that courts “will give to the beneficiaries of a trust such remedies as are necessary for the protection of their interests.”16 Thus ERISA was not so “carefully integrated” and “crafted” as to preclude further judicial delineation of appropriate rights and remedies; far from barring such a process, the statute explicitly directs that courts shall undertake it.
The Court today expressly reserves the question whether extracontractual damages might be one form of “other appropriate relief” under § 502(a)(3). Ante, at 139, n. 5. I believe that, in resolving this and other questions concerning appropriate relief under ERISA, courts should begin by ascertaining the extent to which trust and pension law as developed by state and federal courts provide for recovery by the beneficiary above and beyond the benefits that have been withheld;17 this is the logical first step, given that Congress intended to incorporate trust law into ERISA’s equitable remedies.18 If a requested form of additional relief is *158available under state trust law, courts should next consider whether allowance of such relief would significantly conflict with some other aspect of the ERISA scheme. In addition, courts must always bear in mind the ultimate consideration whether allowance or disallowance of particular relief would best effectuate the underlying purposes of ERISA — enforcement of strict fiduciary standards of care in the administration of all aspects of pension plans and promotion of the best interests of participants and beneficiaries. See supra, at 152-153.
I concur in the judgment of the Court.

 Section 502(a), 88 Stat. 891, 29 U. S. C. § 1132(a), provides in full:
“A civil action may be brought—
“(1) by a participant or beneficiary—
“(A) for the relief provided for in subsection (e) of this section, or
“(B) to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan;
“(2) by the Secretary, or by a participant, beneficiary or fiduciary for appropriate relief under section 409;
“(3) by a participant, beneficiary, or fiduciary (A) to enjoin any act or practice which violates any provision of this title 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 this title or the terms of the plan;
“(4) by the Secretary, or by a participant, or beneficiary for appropriate relief in the case of a violation of [section] 105(c);
“(5) except as otherwise provided in subsection (b), by the Secretary (A) to enjoin any act or practice which violates any provision of this title, or (b) to obtain other appropriate equitable relief (i) to redress such violation or (ii) to enforce any provision of this title; or
“(6) by the Secretary to collect any civil penalty under subsection (i).”

 Section 409, 88 Stat. 886, 29 U. S. C. § 1109, provides:
“(a) Any person who is a fiduciary with respect to a plan who breaches any of the responsibilities, obligations, or duties imposed upon fiduciaries *150by this title shall be personally liable to make good to such plan any losses to the plan resulting from each such breach, and to restore to such plan any profits of such fiduciary which have been made through use of assets of the plan by the fiduciary, and shall be subject to such other equitable or remedial relief as the court may deem appropriate, including removal of such fiduciary. A fiduciary may also be removed for a violation of section 411 of this Act.
“(b) No fiduciary shall be liable with respect to a breach of fiduciary duty under this title if such breach was committed before he became a fiduciary or after he ceased to be a fiduciary.”

 See, e. g., ante, at 138 (“We granted certiorari... to review both the compensatory and punitive components of the Court of Appeals’ holding that § 409 authorizes recovery of extracontractual damages”); ante, at 138, n. 4; ante, at 144 (“[Wje do not find in § 409 express authority for an award of extracontractual damages to a beneficiary”); ante, at 148.

 See, e. g., ante, at 136, 142-144, 146-148.

 Section 404(a), 88 Stat. 877, as amended, 94 Stat. 1296, 29 U. S. C. § 1104(a), provides in relevant part:
“(1) ... [A] fiduciary shall discharge his duties with respect to a plan solely in the interest of the participants and beneficiaries and—
“(A) for the exclusive purpose of: (i) providing benefits to participants and their beneficiaries; and (ii) defraying reasonable expenses of administering the plan;
“(B) with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent man acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims;
“(C) by diversifying the investments of the plan so as to minimize the risk of large losses, unless under the circumstances it is clearly prudent not to do so; and
“(D) in accordance with the documents and instruments governing the plan insofar as such documents and instruments are consistent with the provisions of this title or title IV.”

 See, e. g., H. R. Rep. No. 93-533, p. 11 (1973) (“The fiduciary responsibility section, in essence, codifies and makes applicable to . . . fiduciaries certain principles developed in the evolution of the law of trusts”); id., at 13:
“The principles of fiduciary conduct are adopted from existing trust law, but with modifications appropriate for employee benefit plans. These salient principles place a twofold duty on every fiduciary: to act in his relationship to the plan’s fund as a prudent man in a similar situation and under like conditions would act, and to act consistently with the principles of *153administering the trust for the exclusive purposes previously enumerated, and in accordance with the documents and instruments governing the fund unless they are inconsistent with the fiduciary principles of the section.”
See also S. Rep. No. 93-127, pp. 28-29 (1973); H. R. Conf. Rep. No. 93-1280, p. 303 (1974) (“[T]he assets of the employee benefit plan are to be held for the exclusive benefit of participants and beneficiaries”); 120 Cong. Rec. 29932 (1974) (remarks of Sen. Williams); Central States Pension Fund v. Central Transport, Inc., 472 U. S. 559, 570 (1985) (“Congress invoked the common law of trusts to define the general scope of [fiduciary] authority and responsibility”); NLRB v. Amax Coal Co., 453 U. S. 322, 329 (1981) (“Where Congress uses terms that have accumulated settled meaning under either equity or the common law, a court must infer, unless the statute otherwise dictates, that Congress means to incorporate the established meaning of these terms”); Leigh v. Engle, 727 F. 2d 113, 122 (CA7 1984); Donovan v. Mazzola, 716 F. 2d 1226, 1231 (CA9 1983); Sinai Hospital of Baltimore, Inc. v. National Benefit Fund For Hospital & Health Care Employees, 697 F. 2d 562, 565-566 (CA4 1982); Donovan v. Bierwirth, 680 F. 2d 263, 271 (CA2), cert. denied, 459 U. S. 1069 (1982).

 See, e. g., Restatement (Second) of Trusts §182 (1959); G. Bogert & G. Bogert, Law of Trusts § 109 (1973).

 See, e. g., 120 Cong. Rec. 29929 (1974) (remarks of Sen. Williams) (emphasis added) (ERISA imposes “strict fiduciary obligations upon those who exercise management or control over the assets or administration of an employee pension or welfare plan”); H. R. Conf. Rep. No. 93-1280, at 301, and n. 1 (re procedures for delegating fiduciary duties, including “allocation or delegation of duties with respect to payment of benefits”).

 The Conference Report emphasized that participants and beneficiaries were entitled under § 502 not only to “recover benefits due under the plan” *154and to “clarify rights to receive future benefits under the plan,” but also to obtain other “relief from breach of fiduciary duty.” Id., at 326-327. See also 120 Cong. Rec. 29933 (1974) (remarks of Sen. Williams) (beneficiaries entitled to recover benefits “as well as to obtain redress of fiduciary violations”).

 Trust-law remedies are equitable in nature, and include provision of monetary damages. See, e. g., G. Bogert & G. Bogert, Law of Trusts and Trustees § 862 (2d ed. 1982) (hereinafter Bogert & Bogert, Trusts and Trustees); Restatement (Second) of Trusts §§ 199, 205 (1959). Thus while a given form of monetary relief may be unavailable under ERISA for other reasons, see infra, at 157-158, it cannot be withheld simply because a beneficiary’s remedies under ERISA are denominated “equitable.” See also Restatement (Second) of Torts §874, Comment b (1979) (“Violation of Fiduciary Duty”) (although “[t]he remedy of a beneficiary against a defaulting or negligent trustee is ordinarily in equity,” the beneficiary is entitled to all redress “for harm caused by the breach of a duty arising from the relation”).

 An implied action for personal recovery is specifically barred under the second and third factors set forth in Cort v. Ash: “is there any indication of *155legislative intent, explicit or implicit, either to create such a remedy or to deny one?,” and “is it consistent with the underlying purposes of the legislative scheme to imply such a remedy for the plaintiff?” 422 U. S., at 78.

 “Section [502] specifically allows beneficiaries to sue under Section [409]. However, even if it did not, a private right of action for participants and beneficiaries could be read into Section [409].” Brief for Respondent 14; see also id., at 2.

 120 Cong. Rec. 29942 (1974).

 Id., at 29933. See also H. R. Conf. Rep. No. 93-1280, at 327 (“All such actions in Federal or State courts are to be regarded as arising under the laws of the United States in similar fashion to those brought under Section 301 of the Labor-Management Relations Act of 1947”).

 See also National Society of Professional Engineers v. United States, 435 U. S. 679, 688 (1978) (footnote omitted): “Congress ... did not intend the text of the Sherman Act to delineate the full meaning of the statute or its application in concrete situations. The legislative history makes it perfectly clear that it expected the courts to give shape to the statute’s broad mandate by drawing on common-law tradition. The Rule of Reason, with its origins in common-law precedents long antedating the Sherman Act, has served that purpose.” It seems to me that ERISA, with its incorporation of trust law, deserves a similarly generous and flexible construction.

 3 A. Scott, Law of Trusts § 199, p. 1638 (1967). See also Restatement (Second) of Trusts § 205, and Comment a (1959) (beneficiary entitled to a remedy “which will put him in the position in which he would have been if the trustee had not committed the breach of trust”); Bogert & Bogert, Trusts and Trustees § 862.

 The absence of such relief under traditional trust law is not necessarily dispositive, however, because “in enacting ERISA Congress made more exacting the requirements of the common law of trusts relating to employee benefit trust funds.” Donovan v. Mazzola, 716 F. 2d, at 1231 (emphasis added); see also Sinai Hospital of Baltimore, Inc. v. National Benefit Fund for Hospital & Health Care Employees, 697 F. 2d, at 565-566.

 “Where the courts are required themselves to fashion a federal rule of decision, the source of that law must be federal and uniform. Yet, state law where compatible with national policy may be resorted to and adopted as a federal rule of decision. . . . Here, of course, there is little federal law to which the court may turn for guidance. State regulation of insurance, pensions, and other such programs, however, provides a pre-existing source of experience and experiment in an area in which there is, as yet, only federal inexperience. Much of what the states have thus far devel*158oped, particularly in the insurance field, is statutory. In certain areas of public concern, the state legislatures have been quite active in enacting comprehensive regulatory schemes, and state statutory sources of law will no doubt play a major role in the development of a federal common law under ERISA, particularly in defining rights under employee benefit plans.” Wayne Chemical, Inc. v. Columbus Agency Service Corp., 426 F. Supp. 316, 325 (ND Ind.), modified on other grounds, 567 F. 2d 692 (CA7 1977).