Lead Opinion
delivered the opinion of the Court.
The question presented is whether § 502(a)(3) of the Employee Retirement Income Security Act of 1974 (ERISA), 88 Stat. 891, 29 U. S. C. § 1132(a)(3) (1994 ed.), authorizes this action by petitioners to enforce a reimbursement provision of an ERISA plan.
Respondent Janette Knudson was rendered quadriplegic by a car accident in June 1992. Because her then-husband, respondent Eric Knudson, was employed by petitioner Earth Systems, Inc., Janette was covered by the Health and Welfare Plan for Employees and Dependents of Earth Systems, Inc. (Plan). The Plan covered $411,157.11 of Janette’s medical expenses, of which all except $75,000 was paid by petitioner Great-West Life & Annuity Insurance Co. pursuant to a “stop-loss” insurance agreement with the Plan.
The Plan includes a reimbursement provision that is the basis for the present lawsuit. This provides that the Plan shall have “the right to recover from the [beneficiary] any payment for benefits” paid by the Plan that the beneficiary is entitled to recover from a third party. App. 58. Specifically, the Plan has “a first lien upon any recovery, whether by settlement, judgment or otherwise,” that the beneficiary receives from the third party, not to exceed “the amount of benefits paid [by the Plan] . . . [or] the amount received by the [beneficiary] for such medical treatment. . . .” Id,., at 58-59. If the beneficiary recovers from a third party and fails to reimburse the Plan, “then he will be personally liable to [the Plan] ... up to the amount of the first lien.” Id., at 59. Pursuant to an agreement between the Plan and Great-West, the Plan “assigned] to Great-West all of its rights to make, litigate, negotiate, settle, compromise, release or waive” any claim under the reimbursement provision. Id., at 45.
In late 1993, the Knudsons filed a tort action in California state court seeking to recover from Hyundai Motor Company, the manufacturer of the car they were riding in at the time of the accident, and other alleged tortfeasors. The parties to that action negotiated a $650,000 settlement, a notice of which was mailed to Great-West. This allocated $256,745.30 to a Special Needs Trust under Cal. Prob. Code Ann. §3611 (West 1991 and Supp. 1993) to provide for
The day before the hearing scheduled for judicial approval of the settlement, Great-West, calling itself a defendant and asserting that the state-court action involved federal claims related to ERISA, filed in the United States District Court for the Central District of California a notice of removal pursuant to 28 U. S. C. § 1441 (1994 ed.). That court concluded that Great-West was not a defendant and could not remove the case, and therefore remanded to the state court, which approved the settlement. The state court’s order provided that the defendants would pay the settlement amount allocated to the Special Needs Trust directly to the trust, and the remaining amounts to respondents’ attorney, who, in turn, would tender checks to Medi-Cal and Great-West.
Great-West, however, never cashed the check it received from respondents’ attorney. Instead, at the same time that Great-West sought to remove the state-law tort action, it filed this action in the same federal court (the United States District Court for the Central District of California), seeking injunctive and declaratory relief under § 502(a)(3) to enforce the reimbursement provision of the Plan by requiring the Knudsons to pay the Plan $411,157.11 of any proceeds recovered from third parties. Great-West subsequently filed an amended complaint adding Earth Systems and the Plan as plaintiffs and seeking a temporary restraining order against continuation of the state-court proceedings for approval of the settlement. The District Court denied the temporary restraining order, a ruling that petitioners did not appeal. After the state court approved the settlement and the money was disbursed, the District Court granted summary judgment to the Knudsons. It held that the language of the Plan limited its right of reimbursement to the amount received by
II
We have observed repeatedly that ERISA is a “ ‘comprehensive and reticulated statute,’ the product of a decade of congressional study of the Nation’s private employee benefit system.” Mertens v. Hewitt Associates,
Section 502(a)(3) authorizes a civil action:
“by a participant, beneficiary, or fiduciary (A) to enjoin any act or practice which violates . . . 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 . . . the terms of the plan.” 29 U. S. C. § 1132(a)(3) (1994 ed.).
As we explained in Mertens, “ ‘[e]quitable’ relief must mean something less than all relief.”
Here, petitioners seek, in essence, to impose personal liability on respondents for a contractual obligation to pay money — relief that was not typically available in equity. “A claim for money due and owing under a contract is ‘quintessentially an action at law.’” Wal-Mart Stores, Inc. v. Wells,
Nevertheless, petitioners, along with their amicus the United States, struggle to characterize the relief sought as “equitable” under the standard set by Mertens. We are not persuaded.
A
First, petitioners argue that they are entitled to relief under § 502(a)(3)(A) because they seek “to enjoin a[n] act or practice” — respondents’ failure to reimburse the Plan— “which violates . . . the terms of the plan.” But an injunction to compel the payment of money past due under a con
B
Second, petitioners argue that their suit is authorized by § 502(a)(3)(B) because they seek restitution, which they characterize as a form of equitable relief. However, not all relief falling under the rubric of restitution is available in equity. In the days of the divided bench, restitution was available in certain cases at law, and in certain others in equity. See, e.g., 1 Dobbs §1.2, at 11; id,., §4.1(1), at 556; id., §4.1(3), at 564-565; id., §§ 42-4.3, at 570-624; 5 Corbin §1102, at 550; Muir, ERISA Remedies: Chimera or Congressional Compromise?, 81 Iowa L. Rev. 1, 36-37 (1995); Redish, Seventh Amendment Right to Jury Trial: A Study in the Irrationality
In cases in which the plaintiff “could not assert title or right to possession of particular property, but in which nevertheless he might be able to show just grounds for recovering money to pay for some benefit the defendant had received from him,” the plaintiff had a right to restitution at law through an action derived from the common-law writ of assumpsit. 1 Dobbs § 4.2(1), at 571. See also Muir, supra, at 37. In such cases, the plaintiff’s claim was considered legal because he sought “to obtain a judgment imposing a merely personal liability upon the defendant to pay a sum of money.” Restatement of Restitution § 160, Comment a, pp. 641-642 (1936). Such claims were viewed essentially as actions at law for breach of contract (whether the contract was actual or implied).
In contrast, a plaintiff could seek restitution in equity, ordinarily in the form of a constructive trust or an equitable lien, where money or property identified as belonging in good conscience to the plaintiff could clearly be traced to particular funds or property in the defendant’s possession. See 1 Dobbs § 4.3(1), at 587-588; Restatement of Restitution, supra, § 160, Comment a, at 641-642; 1 G. Palmer, Law of Restitution § 1.4, p. 17; § 3.7, p. 262 (1978). A court of equity could then order a defendant to transfer title (in the case of the constructive trust) or to give a security interest (in the case of the equitable lien) to a plaintiff who was, in the eyes of equity, the true owner. But where “the property [sought to be recovered] or its proceeds have been dissipated so that no product remains, [the plaintiff’s] claim is only that of a general creditor,” and the plaintiff “cannot enforce a con
Here, the funds to which petitioners claim an entitlement under the Plan’s reimbursement provision — the proceeds from the settlement of respondents’ tort action — are not in respondents’ possession. As the order of the state court approving the settlement makes clear, the disbursements from the settlement were paid by two checks, one made payable to the Special Needs Trust and the other to respondents’ attorney (who, after deducting his own fees and costs, placed the remaining funds in a client trust account from which he tendered checks to respondents’ other creditors, Great-West and Medi-Cal). The basis for petitioners’ claim is not that respondents hold particular funds that, in good conscience, belong to petitioners, but that petitioners are contractually entitled to some funds for benefits that they conferred. The kind of restitution that petitioners seek, therefore, is not equitable — the imposition of a constructive trust or equitable lien on particular property — but legal — the imposition of personal liability for the benefits that they conferred upon respondents.
Admittedly, our cases have not previously drawn this fine distinction between restitution at law and restitution in equity, but neither have they involved an issue to which the
Likewise, in Harris Trust and Sav. Bank v. Salomon Smith Barney Inc.,
Justice Ginsburg’s dissent finds it dispositive that some restitutionary remedies were typically available in equity. In her view, the touchstone for distinguishing legal from equitable relief is the “substance of the relief requested,” post, at 228 — and since the “substantive” relief of restitution is typically available in equity, it is, she concludes, available under § 502(a)(3). It is doubtful, to begin with, that “restitution” — or at least restitution defined broadly enough to embrace those forms of restitution available at law — pertains to the substance of the relief rather than to the legal theory under which it is awarded. The “substance” of a money judgment is a compelled transfer of money; a money judgment/or restitution could be thought to identify a particular type of relief (rather than merely the theory on which relief is awarded) only if one were to limit restitution to the return of identifiable funds (or property) belonging to the plaintiff and held by the defendant — that is, to limit restitution to the form of restitution traditionally available in equity.
In any event, Justice Ginsburg’s approach, which looks only to the nature of the relief and not to the conditions that equity attached to its provision, logically leads to the same untenable conclusion reached by Justice Stevens’s dissent — which is that § 502(a)(3)(A)’s explicit authorization of injunction, which it identifies as a form of equitable relief, permits (what equity would never permit) an injunction against failure to pay a simple indebtedness — or, for that matter, an injunction against failure to pay punitive damages. The problem with that conclusion, of course, is that it renders the statute’s limitation of relief to “[injunction] . . . or other appropriate equitable relief” utterly pointless. It
Justice Stevens finds it “difficult... to understand why Congress would not have wanted to provide recourse in federal court for the plan violation disclosed by the record in this ease,” post, at 223. It is, however, not our job to find reasons for what Congress has plainly done; and it is our job to avoid rendering what Congress has plainly done (here,
Respecting Congress’s choice to limit the relief available under § 502(a)(3) to “equitable relief” requires us to recognize the difference between legal and equitable forms of restitution.
Third, the United States, as petitioners’ amicus, argues that the common law of trusts provides petitioners with equitable remedies that allow them to bring this action under § 502(a)(3). Analogizing respondents to beneficiaries of a trust, the United States argues that a trustee could bring a suit to enforce an agreement by a beneficiary to pay money into a trust or to repay an advance made from the trust. See Brief for United States as Amicus Curiae 17-19 (citing Restatement (Second) of Trusts §§252, 255 (1959) (hereinafter Restatement of Trusts)). These trust remedies are simply inapposite. In Mertens, we rejected the claim that the special equity-court powers applicable to trusts define the reach of § 502(a)(3). Instead, we held that the term “equitable relief” in § 502(a)(3) must refer to “those categories of relief that were typically available in equity . . . .”
I — » I — I
In the end, petitioners ask us to interpret § 502(a)(3) so as to prevent them “from being deprived of any remedy under circumstances where such a result clearly would be inconsistent with a primary purpose of ERISA,” namely, the enforcement of the terms of a plan. See Brief for Petitioners 30-31. We note, though it is not necessary to our decision, that there may have been other means for petitioners to obtain the essentially legal relief that they seek. We express no opinion as to whether petitioners could have intervened in the state-court tort action brought by respondents or whether a direct action by petitioners against respondents asserting state-law claims such as breach of contract would have been pre-empted by ERISA. Nor do we decide whether petitioners could have obtained equitable relief against respondents’ attorney and the trustee of the Special Needs Trust, since petitioners did not appeal the District Court’s denial of their motion to amend their complaint to add these individuals as codefendants.
We need not decide these issues because, as we explained in Mertens, “[e]ven assuming ... that petitioners are correct about the pre-emption of previously available state-court actions” or the lack of other means to obtain relief, “vague notions of a statute’s ‘basic purpose’ are nonetheless inadequate to overcome the words of its text regarding the specific issue under consideration.”
It is so ordered.
Notes
At oral argument, petitioners’ counsel argued that the injunction specifically authorized by § 502(a)(3)(A) need not be a form of equitable relief. Petitioners’ brief, however, conceded that the reference in § 502(a)(3)(B) to “other appropriate equitable relief” suggests that the relief authorized in § 502(a)(3)(A) “to enjoin any act or practice which violates ... the terms of [a] plan” is, itself, “appropriate equitable relief.” See Brief for Petitioners 15, n. 6 (emphasis added). In any event, injunction is inherently an equitable remedy, see, e. g., Reich v. Continental Casualty Co.,
There is a limited exception for an accounting for profits, a form of equitable restitution that is not at issue in this case. If, for example, a plaintiff is entitled to a constructive trust on particular property held by the defendant, he may also recover profits produced by the defendant’s use of that property, even if he cannot identify a particular res containing the profits sought to be recovered. See 1 Dobbs §4.3(1), at 588; id., § 4.3(5), at 608. Petitioners do not claim the profits (if any) produced by the proceeds from the state-court settlement, and are not entitled to the constructive trust in those proceeds that would support such a claim.
A Westlaw search discloses that the term “equitable relief” appears in 77 provisions of the United States Code.
In support of its argument that Congress intended all restitution to be “equitable relief” under § 502(a)(3), Justice Ginsburg’s dissent asserts that Congress has treated backpay, “a type of restitution,” post, at 230, as equitable for purposes of Title VII of the Civil Rights Act of 1964. The authorities of this Court cited for the proposition that backpay is a type of restitution are Curtis v. Loether,
Congress “treated [backpay] as equitable” in Title VII, post, at 230 (opinion of Ginsburg, J.), only in the narrow sense that it allowed backpay to be awarded together with equitable relief:
“[T]he court may ... order such affirmative action as may be appropriate, which may include, but is not limited to, reinstatement or hiring of employees, with or without back pay ... , or any other equitable relief as the court deems appropriate.” 42 U. S. C. § 2000e-5(g)(l) (1994 ed.) (emphasis added).
If the referent of “other equitable relief” were “back pay,” it could be said, in a sense relevant here, that Congress “treated” backpay as equitable relief. In fact, however, the referent is “reinstatement or hiring of employees,” which is modified by the phrase “with or without back pay.” Curtis recognized that courts of appeals had treated Title VII backpay as
The statement in Terry on which JUSTICE Ginsburg relies — that “Congress specifically characterized backpay under Title VII as a form of ‘equitable relief,'” 494 U. S., at 572 — is plainly inaccurate unless it is understood to mean that Title VII backpay was “specifically” made part of an equitable remedy. That is the only sense which the Terry discussion requires, and is reinforced by the immediately following citation of the portion of Curtis that called Title VII backpay “an integral part of an equitable remedy,” Curtis, supra, at 197. See Terry, supra, at 572. The restitution sought here by Great-West is not that, but a freestanding claim for money damages. Title VII has nothing to do with this case.
Varity Corp. v. Howe,
Dissenting Opinion
dissenting.
In her lucid dissent, which I join, Justice Ginsburg has explained why it is fanciful to assume that in 1974 Congress
I read the word “other” in § 502(a)(3)(B) as having been intended to enlarge, not contract, a federal judge’s remedial authority. Consequently, and contrary to the Court’s view in Mertens v. Hewitt Associates,
Nevertheless, Mertens is the law, and an inquiry under § 502(a)(3)(B) now entails an analysis of what relief would have been “typically available in equity.”
I respectfully dissent.
See, e. g., Correctional Services Corp. v. Malesko, ante, p. 75 (Stevens, J., dissenting); Alexander v. Sandoval,
See, e. g., Bivens v. Six Unknown Fed. Narcotics Agents,
In a response to this dissent that echoes Tennyson’s poem about the Light Brigade — “Theirs not to reason why, Theirs but to do and die” — the Court states that it is “not our job to find reasons for what Congress has plainly done,” ante, at 217. Congress, of course, has the power to enact unreasonable laws. Nevertheless, instead of blind obedience to what at first blush appears to be such a law, I think it both prudent and respectful to pause to ask why Congress would do so.
Dissenting Opinion
with whom Justice Stevens, Justice Souter, and Justice Breyer join, dissenting.
Today’s holding, the majority declares, is compelled by “Congress’s choice to limit the relief available under § 502(a)(3).” Ante, at 218. In the Court’s view, Congress’ placement of the word “equitable” in that provision signaled an intent to exhume the “fine distinction[s]” borne of the “days of the divided bench,” ante, at 212,214; to treat as dis-positive an ancient classification unrelated to the substance of the relief sought; and to obstruct the general goals of ERISA by relegating to state court (or to no court at all) an array of suits involving the interpretation of employee health plan provisions. Because it is plain that Congress made no such “choice,” I dissent.
I
The Court purports to resolve this case by determining the “nature of the relief” Great-West seeks. Ante, at 215. The opinion’s analysis, however, trains on the question, deemed subsidiary, whether the disputed claim could have been brought in an equity court “[i]n the days of the divided bench.” Ante, at 212-216 (inquiring whether the claim is akin to “an action derived from the common-law writ of as-sumpsit” that would have been brought at law, or instead resembles a claim for return of particular assets that would “lie in equity”). To answer that question, the Court scrutinizes the form of the claim and contrasts its features with the technical requirements that once governed the jurisdictional divide between the premerger courts. Finding no clear match on the equitable side of the line, the Court concludes that Great-West’s claim is beyond the scope of § 502(a)(3) and therefore outside federal jurisdiction.
The rarified rules underlying this rigid and time-bound conception of the term “equity” were hardly at the fingertips of those who enacted § 502(a)(3). By 1974, when ERISA became law, the “days of the divided bench” were a fading memory, for that era had ended nearly 40 years earlier with
It is thus fanciful to attribute to Members of the 93d Congress familiarity with those “needless and obsolete distinctions,” 4 Wright & Miller, supra, § 1041, at 131, much less a deliberate “choice” to resurrect and import them wholesale into the modern regulatory scheme laid out in ERISA. “[T]here is nothing to suggest that ERISA’s drafters wanted to embed their work in a time warp.” Health Cost Controls of Ill. v. Washington,
That Congress did not intend to strap § 502(a)(3) with the anachronistic rules on which the majority relies is corroborated by the anomalous results to which the supposed legislative “choice” leads. Although the Court recognizes that it need not decide the issue, see ante, at 220, its opinion surely contemplates that a constructive trust claim would lie; hence, the outcome of this case would be different if Great-West had sued the trustee of the Special Needs Trust, who has “possession” of the requested funds, instead of the Knudsons, who do not. See ante, at 214 (constructive trust unavailable because “the funds to whieh petitioners claim an entitlement... are not in respondents’ possession”). Under
The procedural history of this case highlights the anomaly of upholding a judgment neither party supports,
The majority’s avowed obedience to Congress’ “choice” is further belied by the conflict between the Court’s holding and Congress’ stated goals in enacting ERISA. After today, ERISA plans and fiduciaries unable to fit their suits within the confines the Court’s opinion constructs are barred from a federal forum; they may seek enforcement of reimbursement provisions like the one here at issue only in state court. Many such suits may be precluded by antisubrogation laws, see Brief for Maryland HMO Subrogation Plaintiffs as Amici Curiae 4-5, n. 2, others may be preempted by ERISA itself, and those that survive may produce diverse and potentially contradictory interpretations of the disputed plan terms. „ ,
We have recognized that Congress sought through ERISA “to establish a uniform administrative scheme” and to ensure that plan provisions would be enforced in federal court, free of “the threat of conflicting or inconsistent State and local regulation.” Fort Halifax Packing Co. v. Coyne,
It is particularly ironic that the majority acts in the name of equity as it sacrifices congressional intent and statutory purpose to archaic and unyielding doctrine. “Equity eschews mechanical rules; it depends on flexibility.” Holmberg v. Armbrecht,
H-1 HH
Unprepared to agree that Congress chose to infuse § 502(a)(3) with the recondite distinctions on which the majority relies, I would accord a different meaning to the term “equitable.” Consistent with what Congress likely intended and with our decision in Mertens, I would look to the substance of the relief requested and ask whether relief of that character was “typically available in equity.” Mertens,
As the majority appears to admit, see ante, at 214, our cases have invariably described restitutionary relief as “equitable” without even mentioning, much less dwelling upon, the ancient classifications on which today’s holding rests. See, e. g., Tull v. United States,
More important, if one’s concern is to follow the Legislature’s will, Congress itself has treated as equitable a type of restitution substantially similar to the relief Great-West seeks here. Congress placed in Title VII of the Civil Rights Act of 1964 the instruction that, to redress violations of the Act, courts may award, inter alia, “appropriate ... equitable relief,” including “reinstatement or hiring of employees, with or without back pay.” 42 U. S. C. §20G0e-5(g)(l) (1994 ed.). Interpreting this provision, we have recognized that backpay is “a form of restitution,” Curtis,
My.objection to the inquiry the Court today adopts in spite of Mertens does not turn on “the difficulty of th[e] task,” ante, at 217. To be sure, I question the Court’s confidence in the ability of “the standard works” to “make the answer clear”; the Court does not indicate what rule prevails, for example, when those works conflict, as they do on key points, compare Restatement of Restitution § 160, Comment e, p. 645 (1936) (constructive trust over money available only where transfer procured by abuse of fiduciary relation or where legal remedy inadequate), with 1 Dobbs, Law of Remedies §4.3(2), at 595, 597 (limitation of constructive trust to “mis-dealings by fiduciaries” a “misconception”; adequacy of legal remedy “seems irrelevant”). And courts have recognized that this Court’s preferred method is indeed “difficult to apply,” Ross v. Bernhard,
Even if the Court’s chosen texts always yielded a quick and plain answer, however, I would think it no less implausible that Congress intended to make controlling the doctrine those texts describe. See supra, at 224-228. Our reliance on that doctrine in the context of the Seventh Amendment and Judiciary Act of 1789, see ante, at 217, underscores the incongruity of applying it here. It may be arguable that “preserving” the meaning of those founding-era provisions requires courts to determine which tribunal would have entertained a particular claim in 18th-century England. See
That the import of the term “equity” might depend on context does not signify a “rolling revision of its content,” ante, at 217, but rather a recognition that equity, characteristically, was and should remain an evolving and dynamic jurisprudence, see Grupo Mexicano,
Thus, there is no reason to ask what court would have entertained Great-West’s claim “[i]n the days of the divided bench,” ante, at 212, and no need to engage in the antiquar
* * *
Today’s decision needlessly obscures the meaning and complicates the application of § 502(a)(3). The Court’s interpretation of that provision embroils federal courts in “recondite controversies better left to legal historians,” Terry,
In the District Court, both parties sought decision on the amount Great-West was entitled to recoup under the Plan’s provision for recovery of benefits paid, and the court resolved that issue in the Knudsons’ favor. The Ninth Circuit, however, refused to review the District Court’s resolution of that question, holding instead that federal courts are without authority to grant any relief to parties in Great-West’s situation. Because neither party defended that ruling in this Court, Motion to Dismiss as Improvidently Granted I, we appointed an amicus curiae to argue in support of the Ninth Circuit’s judgment. See
The Courts of Appeals have not aligned behind the Court’s theory that Congress treated Title VII backpay as equitable “only in the narrow sense that” such relief is an “integral part” of the statutory remedy of reinstatement. Ante, at 218, n. 4. While some courts have employed the majority’s rationale, others have adopted the position the Court denies: that Title VII backpay is restitutionary and “therefore equitable,” ibid. See, e. g., EEOC v. Detroit Edison Co.,
Such a reading of § 2000e-5(g)(l) accords with our recognition in Teamsters v. Terry,