Respondent, a claims examiner for petitioner insurance company
(petitioner), is a beneficiary under employee benefit plans
administered by petitioner and governed by the Employee Retirement
Income Security Act of 1974 (ERISA). In May, 1979, respondent
became disabled with a back ailment, and received plan benefits
until October 17, 1979, when petitioner's disability committee
terminated her benefits based on an orthopedic surgeon's report.
Respondent then requested review of that decision, and on March 11,
1980, the plan administrator reinstated her benefits based on
further medical reports, and retroactive benefits were paid in
full. But claiming that she had been injured by the improper
refusal to pay benefits from October 17, 1979, to March 11, 1980,
respondent sued petitioner in California Superior Court, alleging
various causes of action based on state law and on ERISA.
Petitioner removed the case to Federal District Court, which
granted petitioner's motion for summary judgment, holding,
inter alia, that ERISA barred any claims for
extracontractual damages arising out of the original denial of
respondent's claim for benefits. The Court of Appeals reversed in
pertinent part, holding that the 132 days that petitioner took to
process respondent's claim violated the plan fiduciary's obligation
to process claims in good faith and in a fair and diligent manner,
and that this violation gave rise to a cause of action for damages
under § 409(a) of ERISA that could be asserted by a plan
beneficiary pursuant to § 502(a)(2) authorizing civil enforcement
of ERISA. Section 409(a) provides that
"[a]ny person who is a fiduciary with respect to a plan who
breaches any of the responsibilities, obligations, or duties
imposed upon fiduciaries by this title shall be personally liable
to make good to such plan any losses to the plan resulting from
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."
Held: Section 409(a) does not provide a cause of action
for extracontractual damages to a beneficiary caused by improper or
untimely processing of benefit claims. Pp.
473 U. S.
139-148.
Page 473 U. S. 135
(a) The text of § 409(a) contains no express authority for an
award of such damages, and there is nothing in the text to support
the conclusion that a delay in processing a disputed claim gives
rise to a private cause of action for compensatory or punitive
relief. Rather, the text shows that Congress did not intend to
authorize any relief except for the plan itself. Not only is the
relevant fiduciary relationship characterized at the outset of §
409(a) as one "with respect to a plan," but the fiduciary's
potential personal liability is
"to make good
to such plan any losses
to the
plan . . . and to restore
to such plan any profits of
such fiduciary which have been made through use of assets
of
the plan."
Pp.
473 U. S.
139-144.
(b) Nor can a private cause of action for extra-contractual
damages be implied. While respondent is a member of the class for
whose benefit ERISA was enacted and, in view of the preemptive
effect of ERISA, there is no state law impediment to implying a
remedy, legislative intent and consistency with the legislative
scheme support the conclusion that Congress did not intend the
judiciary to imply such a cause of action. The civil enforcement
provisions of § 502(a) provide strong evidence that Congress did
not intend to authorize other remedies that it did not
incorporate expressly. Pp.
473 U. S. 145-148.
722 F.2d 482, reversed.
STEVENS, J., delivered the opinion of the Court, in which
BURGER, C.J., and POWELL, REHNQUIST, and O'CONNOR, JJ., joined.
BRENNAN, J., filed an opinion concurring in the judgment, in which
WHITE, MARSHALL, and BLACKMUN, JJ., joined,
post, p.
473 U. S.
148.
Page 473 U. S. 136
JUSTICE STEVENS delivered the opinion of the Court.
The question presented for decision is whether, under the
Employee Retirement Income Security Act of 1974 (ERISA), a
fiduciary to an employee benefit plan may be held personally liable
to a plan participant or beneficiary for extracontractual
compensatory or punitive damages caused by improper or untimely
processing of benefit claims.
Respondent Doris Russell, a claims examiner for petitioner
Massachusetts Mutual Life Insurance Company (hereafter petitioner),
is a beneficiary under two employee benefit plans administered by
petitioner for eligible employees. Both plans are funded from the
general assets of petitioner, and both are governed by ERISA.
In May, 1979, respondent became disabled with a back ailment.
She received plan benefits until October 17, 1979, when, based on
the report of an orthopedic surgeon, petitioner's disability
committee terminated her benefits. On October 22, 1979, she
requested internal review of that decision and, on November 27,
1979, submitted a report from her own psychiatrist indicating that
she suffered from a psychosomatic disability with physical
manifestations, rather than an orthopedic illness. After an
examination by a second psychiatrist on February 15, 1980, had
confirmed that respondent was temporarily disabled, the plan
administrator reinstated her benefits on March 11, 1980. Two days
later, retroactive benefits were paid in full. [
Footnote 1]
Although respondent has been paid all benefits to which she is
contractually entitled, she claims to have been injured by the
improper refusal to pay benefits from October 17, 1979, when her
benefits were terminated, to March 11, 1980, when her eligibility
was restored. Among other allegations, she asserts that the
fiduciaries administering petitioner's employee benefit plans are
high-ranking company officials who
Page 473 U. S. 137
(1) ignored readily available medical evidence documenting
respondent's disability, (2) applied unwarrantedly strict
eligibility standards, and (3) deliberately took 132 days to
process her claim, in violation of regulations promulgated by the
Secretary of Labor. [
Footnote
2] The interruption of benefit payments allegedly forced
respondent's disabled husband to cash out his retirement savings
which, in turn, aggravated the psychological condition that caused
respondent's back ailment. Accordingly, she sued petitioner in the
California Superior Court pleading various causes of action based
on state law and on ERISA.
Petitioner removed the case to the United States District Court
for the Central District of California, and moved for summary
judgment. The District Court granted the motion, holding that the
state law claims were preempted by ERISA and that
"ERISA bars any claims for extra-contractual damages and
punitive damages arising out of the original denial of plaintiff's
claims for benefits under the Salary Continuance Plan and the
subsequent review thereof."
App. to Pet. for Cert. 29a.
On appeal, the United States Court of Appeals for the Ninth
Circuit affirmed in part and reversed in part. 722 F.2d 482 (1983).
Although it agreed with the District Court that respondent's state
law causes of action were preempted by ERISA, it held that her
complaint alleged a cause of action under ERISA.
See id.
at 487-492. The court reasoned that the 132 days [
Footnote 3] petitioner took to process
respondent's claim violated the fiduciary's obligation to process
claims in good faith and in a fair and diligent manner.
Id. at
Page 473 U. S. 138
488. The court concluded that this violation gave rise to a
cause of action under § 409(a) that could be asserted by a plan
beneficiary pursuant to § 502(a)(2).
Id. at 489-490. It
read the authorization in § 409(a) of "such other equitable or
remedial relief as the court may deem appropriate" as giving it
"wide discretion as to the damages to be awarded," including
compensatory and punitive damages.
Id. at 490-491.
According to the Court of Appeals, the award of compensatory
damages shall "remedy the wrong and make the aggrieved individual
whole," which meant not merely contractual damages for loss of plan
benefits, but relief
"that will compensate the injured party for all losses and
injuries sustained as a direct and proximate cause of the breach of
fiduciary duty,"
including "damages for mental or emotional distress."
Id. at 490. Moreover, the liability under § 409(a) "is
against the fiduciary personally, not the plan."
Id. at
490, n. 8.
The Court of Appeals also held that punitive damages could be
recovered under § 409(a), although it decided that such an award is
permitted only if the fiduciary "acted with actual malice or wanton
indifference to the rights of a participant or beneficiary."
Id. at 492. The court believed that this result was
supported by the text of § 409(a) and by the congressional purpose
to provide broad remedies to redress and prevent violations of the
Act.
We granted certiorari, 469 U.S. 816 (1984), to review both the
compensatory and punitive components of the Court of Appeals'
holding that § 409 authorizes recovery of extracontractual damages.
[
Footnote 4] Respondent defends
the judgment of the Court of Appeals both on its reasoning that §
409 provides an express basis for extracontractual damages, as well
as by arguing that, in any event, such a private remedy should be
inferred under the analysis employed in
Cort v. Ash,
422 U. S. 66,
473 U. S. 78
(1975). We reject both arguments.
Page 473 U. S. 139
I
As its caption implies, § 409(a) establishes "LIABILITY FOR
BREACH OF FIDUCIARY DUTY." [
Footnote 5] Specifically, it 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 by 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. [
Footnote 6]"
88 Stat. 886, 29 U.S.C. § 1109(a).
Sections 501 and 502 authorize, respectively, criminal and civil
enforcement of the Act. While the former section provides for
criminal penalties against any person who willfully violates any of
the reporting and disclosure requirements of the Act, [
Footnote 7] the latter section
identifies six types of civil actions
Page 473 U. S. 140
that may be brought by various parties. Most relevant to our
inquiry is § 502(a), which provides in part:
"A civil action may be brought -- "
"(1) by a participant or beneficiary -- "
"(A) for the relief provided for in subsection (c) 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. . . ."
88 Stat. 891, 29 U.S.C. § 1132(a).
There can be no disagreement with the Court of Appeals'
conclusion that § 502(a)(2) authorizes a beneficiary to bring an
action against a fiduciary who has violated § 409. Petitioner
contends, however, that recovery for a violation of § 409 inures to
the benefit of the plan as a whole. We find this contention
supported by the text of § 409, by the statutory provisions
defining the duties of a fiduciary, and by the provisions defining
the rights of a beneficiary.
The Court of Appeals' opinion focused on the reference in § 409
to "such other equitable or remedial relief as the court may deem
appropriate." But when the entire section is examined, the emphasis
on the relationship between the fiduciary and the plan as an entity
becomes apparent. Thus, not only is the relevant fiduciary
relationship characterized at the outset as one "with respect to a
plan," but the potential personal liability of the fiduciary is
"to make good
to such plan any losses
to the
plan . . . and to restore
to such plan any profits of
such fiduciary which have been made through use of assets
of
the plan. . . . [
Footnote
8] "
Page 473 U. S. 141
To read directly from the opening clause of § 409(a), which
identifies the proscribed acts, to the "catchall" remedy phrase at
the end -- skipping over the intervening language establishing
remedies benefiting, in the first instance, solely
Page 473 U. S. 142
the plan -- would divorce the phrase being construed from its
context and construct an entirely new class of relief available to
entities other than the plan.
Cf. FMC v. Seatrain Lines,
Inc., 411 U. S. 726,
411 U. S. 734
(1973);
United States v. Jones, 131 U. S.
1,
131 U. S. 19
(1889). This "blue pencil" method of statutory interpretation --
omitting all words not part of the clauses deemed pertinent to the
task at hand -- impermissibly ignores the relevant context in which
statutory language subsists.
See Jarecki v. G. D. Searle &
Co., 367 U. S. 303,
367 U. S. 307
(1961). In this case, this mode of interpretation would render
superfluous the preceding clauses providing relief singularly to
the plan, and would slight the language following after the phrase
"such other equitable or remedial relief." Congress specified that
this remedial phrase includes "removal of such fiduciary" -- an
example of the kind of "plan-related" relief provided by the more
specific clauses it succeeds. A fair contextual reading of the
statute makes it abundantly clear that its draftsmen were primarily
concerned with the possible misuse of plan assets, and with
remedies that would protect the entire plan, rather than with the
rights of an individual beneficiary. [
Footnote 9]
It is, of course, true that the fiduciary obligations of plan
administrators are to serve the interest of participants and
beneficiaries and, specifically, to provide them with the benefits
authorized by the plan. But the principal statutory duties imposed
on the trustees relate to the proper management, administration,
and investment of fund assets, the maintenance of proper records,
the disclosure of specified information,
Page 473 U. S. 143
and the avoidance of conflicts of interest. [
Footnote 10] Those duties are described in
Part 4 of Title 1 of the Act, which is entitled "FIDUCIARY
RESPONSIBILITY,"
see §§ 401-414, 88 Stat. 874-890, 29
U.S.C. §§ 1101-1114, whereas the statutory provisions relating to
claim procedures are found in Part 5, dealing with "ADMINISTRATION
AND ENFORCEMENT." §§ 502(a), 503, 88 Stat. 891, 893, 29 U.S.C. §§
1132(a), 1133. The only section that concerns review of a claim
that has been denied -- § 503 -- merely specifies that every plan
shall comply with certain regulations promulgated by the Secretary
of Labor. [
Footnote 11]
Page 473 U. S. 144
The Secretary's regulations contemplate that a decision
"shall be made promptly, and shall not ordinarily be made later
than 60 days after the plan's receipt of a request for review,
unless special circumstances . . . require an extension of time for
processing, in which case a decision shall be rendered as soon as
possible, but not later than 120 days after receipt of a request
for review."
29 CFR § 2560.5031(h)(1)(i) (1984). Nothing in the regulations
or in the statute, however, expressly provides for a recovery from
either the plan itself or from its administrators if greater time
is required to determine the merits of an application for benefits.
Rather, the regulations merely state that a claim may be treated as
having been denied after the 60- or 120-day period has elapsed.
See § 2560.503-1(h)(4) ("If the decision on review is not
furnished within such time, the claim shall be
deemed
denied on review" (emphasis added)). This provision therefore
enables a claimant to bring a civil action to have the merits of
his application determined, just as he may bring an action to
challenge an outright denial of benefits. Significantly, the
statutory provision explicitly authorizing a beneficiary to bring
an action to enforce his rights under the plan -- § 502(a)(1)(B),
quoted
supra, at
473 U. S. 140
-- says nothing about the recovery of extracontractual damages, or
about the possible consequences of delay in the plan
administrators' processing of a disputed claim. Thus, there really
is nothing at all in the statutory text to support the conclusion
that such a delay gives rise to a private right of action for
compensatory or punitive relief. And the entire text of § 409
persuades us that Congress did not intend that section to authorize
any relief except for the plan itself. In short, unlike the Court
of Appeals, we do not find in § 409 express authority for an award
of extracontractual damages to a beneficiary. [
Footnote 12]
Page 473 U. S. 145
II
Relying on the four-factor analysis employed by the Court in
Cort v. Ash, 422 U.S. at
422 U. S. 78,
[
Footnote 13] respondent
argues that a private right of action for extracontractual damages
should be implied even if it is not expressly authorized by ERISA.
Two of the four Cort factors unquestionably support respondent's
claim: respondent is a member of the class for whose benefit the
statute was enacted and, in view of the preemptive effect of ERISA,
there is no state law impediment to implying a remedy. But the two
other factors -- legislative intent and consistency with the
legislative scheme -- point in the opposite direction. And
"unless this congressional intent can be inferred from the
language of the statute, the statutory structure, or some other
source, the essential predicate for implication of a private remedy
simply does not exist."
Northwest Airlines, Inc. v. Transport Workers,
451 U. S. 77,
451 U. S. 94
(1981). "The federal judiciary will not engraft a remedy on a
statute, no matter how salutary, that Congress did not intend to
provide."
California v. Sierra Club, 451 U.
S. 287,
451 U. S.
297(1981).
The voluminous legislative history of the Act contradicts
respondent's position. It is true that an early version of the
Page 473 U. S. 146
statute contained a provision for "legal or equitable" relief
that was described in both the Senate and House Committee Reports
as authorizing "the full range of legal and equitable remedies
available in both state and federal courts." H.R.Rep. No. 93-533,
p. 17 (1973), 2 Leg.Hist. 2364; S.Rep. No. 93-127, p. 35 (1973), 1
Leg.Hist. 621. But that language appeared in Committee Reports
describing a version of the bill before the debate on the floor and
before the Senate-House Conference Committee had finalized the
operative language. [
Footnote
14] In the bill passed by the House of Representatives and
ultimately adopted by the Conference Committee, the reference to
legal relief was deleted. The language relied on by respondent and
by the Court of Appeals below, therefore, is of little help in
understanding whether Congress intended to make fiduciaries
personally liable to beneficiaries for extracontractual
damages.
The six carefully integrated civil enforcement provisions found
in § 502(a) of the statute as finally enacted, however, provide
strong evidence that Congress did not intend to authorize other
remedies that it simply forgot to incorporate expressly. The
assumption of inadvertent omission is rendered especially suspect
upon close consideration of ERISA's interlocking, interrelated, and
interdependent remedial scheme, which is in turn part of a
"comprehensive and reticulated statute."
Nachman Corp. v.
Pension Benefit Guaranty Corporation, 446 U.
S. 359,
446 U. S. 361
(1980). If in this case, for example, the plan administrator had
adhered to his initial determination that respondent was not
entitled to disability benefits under the plan, respondent would
have had a panoply of remedial devices at her disposal. To recover
the
Page 473 U. S. 147
benefits due her, she could have filed an action pursuant to §
502(a)(1)(B) to recover accrued benefits, to obtain a declaratory
judgment that she is entitled to benefits under the provisions of
the plan contract, and to enjoin the plan administrator from
improperly refusing to pay benefits in the future. If the plan
administrator's refusal to pay contractually authorized benefits
had been willful and part of a larger systematic breach of
fiduciary obligations, respondent in this hypothetical could have
asked for removal of the fiduciary pursuant to §§ 502(a)(2) and
409. Finally, in answer to a possible concern that attorney's fees
might present a barrier to maintenance of suits for small claims,
thereby risking underenforcement of beneficiaries' statutory
rights, it should be noted that ERISA authorizes the award of
attorney's fees.
See § 502(g), 88 Stat. 892, as amended,
29 U.S.C. § 1132(g)(1).
We are reluctant to tamper with an enforcement scheme crafted
with such evident care as the one in ERISA. As we stated in
Transamerica Mortgage Advisors, Inc. v. Lewis,
444 U. S. 11,
444 U. S. 19
(1979): "[W]here a statute expressly provides a particular remedy
or remedies, a court must be chary of reading others into it."
See also Touche Ross & Co. v. Redington, 442 U.
S. 560,
442 U. S.
571-574 (1979).
"The presumption that a remedy was deliberately omitted from a
statute is strongest when Congress has enacted a comprehensive
legislative scheme including an integrated system of procedures for
enforcement."
Northwest Airlines, Inc. v. Transport Workers, 451 U.S.
at
451 U. S. 97.
[
Footnote 15]
Page 473 U. S. 148
In contrast to the repeatedly emphasized purpose to protect
contractually defined benefits, [
Footnote 16] there is a stark absence -- in the statute
itself and in its legislative history -- of any reference to an
intention to authorize the recovery of extracontractual damages.
[
Footnote 17] Because
"neither the statute nor the legislative history reveals a
congressional intent to create a private right of action . . . we
need not carry the
Cort v. Ash inquiry further."
Northwest Airlines, Inc. v. Transport Workers, 451 U.S.
at
451 U. S. 94, n.
31.
III
Thus, the relevant text of ERISA, the structure of the entire
statute, and its legislative history all support the conclusion
that, in § 409(a), Congress did not provide, and did not intend the
judiciary to imply, a cause of action for extracontractual damages
caused by improper or untimely processing of benefit claims.
The judgment of the Court of Appeals is therefore
Reversed.
[
Footnote 1]
Respondent later qualified for permanent disability benefits
which have been regularly paid.
[
Footnote 2]
The regulations, which are authorized by §§ 503, 505, 88 Stat.
893-894, 29 U.S.C. §§ 1133, 1135, appear at 29 CFR § 2560.503-1(h)
(1984). We discuss them
infra at
473 U. S. 144,
and n. 11.
[
Footnote 3]
Petitioner argues that the review period should be measured from
November 27, 1979, when respondent submitted her medical evidence,
rather than from October 22, 1979, the date she requested review,
but for purposes of our decision, we accept respondent's position
on this point.
[
Footnote 4]
Respondent did not file a cross-petition, and therefore has not
questioned the Court of Appeals' holding that her state law causes
of action are preempted by ERISA.
[
Footnote 5]
Because respondent relies entirely on 409(a), and expressly
disclaims reliance on § 502(a)(3), we have no occasion to consider
whether any other provision of ERISA authorizes recovery of
extracontractual damages. Tr. Oral Arg. 31-32.
[
Footnote 6]
Section 411 prohibits any person who has been convicted of
certain enumerated offenses from serving as an administrator or
fiduciary of a regulated plan.
See 88 Stat. 887, 29 U.S.C.
§ 1111.
[
Footnote 7]
Section 501 reads as follows:
"Any person who willfully violates any portion of part 1 of this
subtitle, or any regulation or order issued under any such
provision, shall upon conviction be fined not more than $5,000 or
imprisoned not more than one year, or both; except that in the case
of such violation by a person not an individual, the fine imposed
upon such person shall be a fine not exceeding $100,000."
88 Stat. 891, 29 U.S.C. § 1131. Part 1 of the subtitle, which
consists of §§ 101-111, imposes elaborate reporting and disclosure
requirements on plan administrators.
See 88 Stat. 840-851,
29 U.S.C. §§ 1021-1031.
[
Footnote 8]
The Committee Reports also emphasize the fiduciary's personal
liability for losses
to the plan. See
H.R.Conf.Rep. No. 93-1280, p. 320 (1974), reprinted in 3
Subcommittee on Labor and Public Welfare of the Senate Committee on
Labor and Public Welfare, 94th Cong., 2d Sess., Legislative History
of the Employee Retirement Income Security Act of 1974, p. 4587
(Comm. print 1976) (hereinafter Leg.Hist.); S.Rep. No. 93-383, pp.
8, 32, 105 (1973), 1 Leg.Hist. 1076, 1100, 1173; S.Rep. No. 93-127,
p. 33 (1973), 1 Leg.Hist. 619.
The floor debate also reveals that the crucible of congressional
concern was misuse and mismanagement of plan assets by plan
administrators, and that ERISA was designed to prevent these abuses
in the future.
See 120 Cong.Rec. 29932 (1974) ("[T]he
legislation imposes strict fiduciary obligations on those who have
discretion or responsibility respecting the management, handling,
or disposition of pension or welfare plan assets") (remarks of Sen.
Williams), reprinted in 3 Leg.Hist. 4743; 120 Cong.Rec. 29951
(1974) ("This bill will establish judicially enforceable standards
to insure honest, faithful, and competent management of pension and
welfare funds") (remarks of Sen. Bentsen), reprinted in 3 Leg.Hist.
4795; 120 Cong.Rec. 29954 (1974) ("[I]nstances have arisen in which
pension funds have been used improperly by plan managers and
fiduciaries. . . . [T]his bill contains measures designed to reduce
substantially the potentialities for abuse") (remarks of Sen.
Nelson), reprinted in 3 Leg.Hist. 4803; 120 Cong.Rec. 29957 (1974)
("In addition, frequently the pension funds themselves are abused
by those responsible for their management who manipulate them for
their own purposes or make poor investments with them") (remarks of
Sen. Ribicoff), reprinted in 3 Leg.Hist. 4811; 120 Cong.Rec. 29957
(1974) ("[M]isuse, manipulation, and poor management of pension
trust funds are all too frequent") (remarks of Sen. Ribicoff),
reprinted in 3 Leg.Hist. 4812; 120 Cong.Rec. 29961 (1974) ("This
legislation . . . sets fiduciary standards to insure that pension
funds are not mismanaged") (remarks of Sen. Clark), reprinted in 3
Leg.Hist. 4823; 120 Cong.Rec. 29194 (1974) (ERISA contains
"provisions to insure fair handling of a worker's money") (remarks
of Rep. Biaggi), reprinted in 3 Leg.Hist. 4661; 120 Cong.Rec.
29196-29197 (1974) ("These standards . . . will prevent abuses . .
. by those dealing with plans") (remarks of Rep. Dent), reprinted
in 3 Leg.Hist. 4668; 120 Cong.Rec. 29206 (1974) (ERISA imposes
"fiduciary and disclosure standards to guard against fraud and
abuse of pension funds") (remarks of Rep. Brademas), reprinted in 3
Leg.Hist. 4694.
[
Footnote 9]
Consistent with this objective, § 502(a)(2), the enforcement
provision for § 409, authorizes suits by four classes of party
plaintiffs: the Secretary of Labor, participants, beneficiaries,
and fiduciaries. Inclusion of the Secretary of Labor is indicative
of Congress' intent that actions for breach of fiduciary duty be
brought in a representative capacity on behalf of the plan as a
whole. Indeed, the common interest shared by all four classes is in
the financial integrity of the plan.
[
Footnote 10]
Accordingly, ERISA establishes duties of loyalty and care for
fiduciaries. With regard to loyalty, the principal provision is §
406, which in general prohibits self-dealing and sales or exchanges
between the plan, on the one hand, and "parties in interest" and
"disqualified persons," on the other.
See 88 Stat.
879-880, 29 U.S.C. § 1106. In the same vein, § 408(c)(2) prohibits
compensating fiduciaries who are full-time employees of unions or
employers. 88 Stat. 885, 29 U.S.C. § 1108(c)(2).
With regard to the duty of care, § 404, among other obligations,
imposes a "prudent person" standard by which to measure
fiduciaries' investment decisions and disposition of assets.
See 88 Stat. 877, 29 U.S.C. § 1104(a)(1)(B). Section 404
also mandates 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."
88 Stat. 877, 29 U.S.C. § 1104(a)(1).
[
Footnote 11]
Section 503 provides:
"In accordance with regulations of the Secretary, every employee
benefit plan shall -- "
"(1) provide adequate notice in writing to any participant or
beneficiary whose claim for benefits under the plan has been
denied, setting forth the specific reasons for such denial, written
in a manner calculated to be understood by the participant,
and"
"(2) afford a reasonable opportunity to any participant whose
claim for benefits has been denied for a full and fair review by
the appropriate named fiduciary of the decision denying the
claim."
88 Stat. 893, 29 U.S.C. § 1133. The Secretary of Labor's
rulemaking power is contained in § 505, 88 Stat. 894, 29 U.S.C. §
1135.
[
Footnote 12]
In light of this holding, we do not reach any question
concerning the extent to which § 409 may authorize recovery of
extracontractual compensatory or punitive damages from a fiduciary
by a
plan.
[
Footnote 13]
"In determining whether a private remedy is implicit in a
statute not expressly providing one, several factors are relevant.
First, is the plaintiff 'one of the class for whose
especial benefit the statute was enacted,'
Texas &
Pacific R. Co. v. Rigsby, 241 U. S. 33,
241 U. S.
39 (1916) (emphasis supplied) -- that is, does the
statute create a federal right in favor of the plaintiff? Second,
is there any indication of legislative intent, explicit or
implicit, either to create such a remedy or to deny one?
See,
e.g., National Railroad Passenger Corporation v. National Assn. of
Railroad Passengers, 414 U. S. 453,
414 U. S.
458,
414 U. S. 460 (1974)
(
Amtrak). Third, is it consistent with the underlying
purposes of the legislative scheme to imply such a remedy for the
plaintiff? . . . And finally, is the cause of action one
traditionally relegated to state law, in an area basically the
concern of the States, so that it would be inappropriate to infer a
cause of action based solely on federal law?"
Cort v. Ash, 422 U.S. at
422 U. S. 78
(citations omitted).
[
Footnote 14]
This provision, which was part of H.R. 2 as passed by the
Senate, provided for
"[c]ivil actions for appropriate relief, legal or equitable, to
redress or restrain a breach of any responsibility, obligation, or
duty of a fiduciary."
H.R. 2, § 693, 93d Cong., 2d Sess. (Mar. 4, 1974), 3 Leg.Hist.
3816. (It was also part of earlier bills.
See S. 4, § 603,
93d Cong., 1st Sess. (Apr. 18.1973), 1 Leg.Hist. 579;
see
also S. 1179, § 501(d) 93d Cong., 1st Sess. (Aug. 21, 1973), 1
Leg.Hist. 950.)
[
Footnote 15]
See Middlesex County Sewerage Authority v. National Sea
Clammers Assn., 453 U. S. 1,
453 U. S. 14-15
(1981);
Texas Industries, Inc. v. Radcliff Materials,
Inc., 451 U. S. 630,
451 U. S.
639-640 (1981);
California v. Sierra Club,
451 U. S. 287,
451 U. S. 295,
n. 6 (1981);
National Railroad Passenger Corporation v.
National Assn. of Railroad Passengers, 414 U.
S. 453,
414 U. S. 458
(1974);
Nashville Milk Co. v. Carnation Co., 355 U.
S. 373,
355 U. S.
375-376 (1958);
Switchmen v. National Mediation
Board, 320 U. S. 297,
320 U. S. 301
(1943);
Botany Worsted Mills v. United States,
278 U. S. 282,
278 U. S. 289
(1929).
[
Footnote 16]
See, e.g., Nachman Corp. v. Pension Benefit Guaranty
Corporation, 446 U. S. 359,
446 U. S.
374-375 (1980); 120 Cong.Rec. 29196 (1974), 3 Leg.Hist.
4665; 119 Cong.Rec. 30041 (1973), 2 Leg.Hist. 1633.
[
Footnote 17]
Indeed, Congress was concerned lest the cost of federal
standards discourage the growth of private pension plans.
See,
e.g., H.R.Rep. No. 93-533, 1, 9 (1973), 2 Leg.Hist. 2348,
2356; 120 Cong.Rec. 29949 (1974), 3 Leg.Hist. 4791; 120 Cong.Rec.
29210-29211 (1974), 3 Leg.Hist. 4706-4707.
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 participant
Page 473 U. S. 149
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 sch violations,"
§ 502(a)(3) (emphasis added). [
Footnote
2/1]
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 extracontractual
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," [
Footnote 2/2]
participants and beneficiaries
Page 473 U. S. 150
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
473 U. S. 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
473 U. S. 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
Page 473 U. S. 151
takes care to limit the binding effect of its decision to the
terms of § 409, [
Footnote 2/3] its
opinion at some points seems to speak generally of whether
fiduciaries ever may be held personally liable to beneficiaries for
extracontractual damages. [
Footnote
2/4] 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
473 U. S.
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
473 U. S. 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
473 U. S.
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
Page 473 U. S. 152
to traditional trust law remedies for breaches of those duties,
I could not more strongly disagree. As the Court acknowledges in a
footnote,
ante at
473 U. S. 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. [
Footnote 2/5]"
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, [
Footnote 2/6] and it is black-letter trust law that
fiduciaries
Page 473 U. S. 153
owe strict duties running directly to beneficiaries in the
administration and payment of trust benefits. [
Footnote 2/7] The legislative history also shows
that Congress intended these fiduciary standards to govern the
ERISA claims administration process. [
Footnote 2/8]
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." [
Footnote
2/9] This section and
Page 473 U. S. 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). [
Footnote 2/10]
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
473 U. S. 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
473 U. S.
139-142, such a private right is squarely barred under
the standards set forth in
Cort v. Ash, 422 U. S.
66,
422 U. S. 78
(1975). [
Footnote 2/11]
Page 473 U. S. 155
In disposing of this relatively straightforward issue, the Court
makes some observations about the role of courts generally in
construing and enforcing ERISA. T he 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
473 U. S. 146,
473 U. S.
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, [
Footnote 2/12] 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)(3).
Page 473 U. S. 156
The 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.
[
Footnote 2/13]"
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. [
Footnote 2/14]"
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,
353 U. S. 451,
353 U. S. 457
(1957). [
Footnote 2/15] ERISA's
legislative history also demonstrates beyond question that Congress
intended to engraft trust law principles onto the enforcement
Page 473 U. S. 157
scheme,
see n.
473
U.S. 134fn2/6|>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." [
Footnote 2/16] 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
473 U. S. 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; [
Footnote 2/17] this is the logical first
step, given that Congress intended to incorporate trust law into
ERISA's equitable remedies. [
Footnote
2/18] If a requested form of additional relief is
Page 473 U. S. 158
available 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
473 U. S.
152-153.
I concur in the judgment of the Court.
[
Footnote 2/1]
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 (c) 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)."
[
Footnote 2/2]
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 by 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."
[
Footnote 2/3]
See, e.g., ante at
473 U. S. 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
473 U. S. 138,
n. 4;
ante at
473 U. S. 144
("[W]e do not find in § 409 express authority for an award of
extracontractual damages to a beneficiary");
ante at
473 U. S.
148.
[
Footnote 2/4]
See, e.g., ante at
473 U. S. 136,
473 U. S.
142-144,
473 U. S.
146-148.
[
Footnote 2/5]
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."
[
Footnote 2/6]
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 administering
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. 931280, 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,
472 U. S. 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,
453 U. S. 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).
[
Footnote 2/7]
See, e.g., Restatement (Second) of Trusts § 182 (1959);
G. Bogert & G. Bogert, Law of Trusts § 109 (1973).
[
Footnote 2/8]
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").
[
Footnote 2/9]
The Conference Report emphasized that participants and
beneficiaries were entitled under § 502 not only to "recover
benefits due under the plan" and 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").
[
Footnote 2/10]
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
473 U. S.
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").
[
Footnote 2/11]
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 legislative 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
422 U. S.
78.
[
Footnote 2/12]
"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.
[
Footnote 2/13]
120 Cong.Rec. 29942 (1974).
[
Footnote 2/14]
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").
[
Footnote 2/15]
See also National Society of Professional Engineers v.
United States, 435 U. S. 679,
435 U. S. 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.
[
Footnote 2/16]
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.
[
Footnote 2/17]
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 Employee, 697 F.2d at
565-566.
[
Footnote 2/18]
"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 preexisting 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
developed, 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).