Varity Corp. v. Howe

v. VARITY CORP. HOWE et al. 1, 1995 November Argued

No. 94-1471. March Decided Brеyer, J., Court, opinion Rehnquist, delivered the in which J., Stevens, Souter, Kennedy, C. Ginsburg, JJ., joined. J., Thomas, Scalia, filed a dissenting which O’Connor opinion, JJ., joined, post, p. 516.

Floyd Abrams the cause for With argued petitioner. Kavaler, J. B. Thomas Katherine him were on the briefs Sherman, Harrison, Jonathan and William J Koehn. H Richard Smith argued the cause for respondents. Swinton, on the brief were David Michael J With him Eason, and Robert J. Schmit. Kneedler

Deputy General Solicitor for the cause argued curiae States as amicus affirmance. the urging United Days, Richard on the brief were Solicitor General With him Feldman, Allen Williamson, Jr., H. Bress, R Thomas S. Flynn, D. Heimlich.* Mandel, Mark S. Judith J. Steven and Breyer the delivered Court. opinion Justice bene- a firm’s welfare A beneficiaries employee group Income Se- Retirement fit by Employee plan, protected were filed for the Chamber of amici curiae reversal urging *Briefs Roberts, Jr., Miller, John G. Evan by Commerce of United States Robert Bokat; by Co. et A. for Eastman Kodak al. and and Stephen N. Eccles. for American filed of amici curiae affirmance were urging Briefs Mary Ellen S. Saleznick and Steven Persons by

Association Retired by Lawyers Association Employment Signorille; and for the National Dean, Bruce, Lewis, Edgar Pauk. Ronald Jeffrey R. and Stephen States, and Southeast of amici curiae were filed for the Central Briefs Thomas C. by Fund Areas and and Pension Southwest Health Welfare of Securities Craig; and TerenceG. National Association Nyhan and for the Cuneo, Roddy, P. Jonathan W Kevin Attorneys by and Commercial Law Rossbacher, Clobes, and Steve Henry P. H. Bryan Hoffman, L. Stephen W Berman. (ERISA),

curity amended, as Act Stat. (1988ed.), seq. plan’s have their admin- 1001et sued U. S. C. employer. They also their claim that the istrator, who was trickery, through led them to withdraw from administrator, They among seek, and forfeit their benefits. things, essence, in reinstate each that, an order would other employer’s plan. particiрant ERISA as a of them judgment employees’ favor, in the lower courts entered agreed judgment. we review question conducting do lower review, In our deception employer, findings but of serious courts’ questions. legal First, the factual three instead consider (as courts), was the the lower determined circumstances “fiduciary” capacity an employer acting as ERISA deliberately significantly the beneficiar- misled when it misleading beneficiaries, the em- did Second, in ies? §404 fiduciary obligations that ERISA ployer violate Third, upon plan does imposes administrators? 502(a)(3) bring beneficiaries to authorize ERISA relief individual bene- one, that seeks lawsuit, such by an breach of harmed administrator’s ficiaries obligations? questions in the of these beneficiaries’

We answer each judgment of the Court favor, we therefore affirm the Appeals. I key trial, after as found the District Court facts, respond- following: and the other Howe, Charles include the Massey-Ferguson, equip- Inc., a farm ents, to work used subsidiary wholly of the manufacturer, and a owned ment (Since Varity Corporation. courts petitioner, lower egos,” Massey-Ferguson Varity and were “alter found that interchangeably.) employees These we shall refer to them Massey- participants in, of, all were beneficiaries Ferguson’s employee welfare benefit self-funded —an ERISA-protected plan Massey-Ferguson that itself adminis- Varity tered. In the became concerned that mid-1980’s, some of divisions were too much Massey-Ferguson’s losing business to deal with the money developed problem.

The business called Sun- Varity “Project —which to shine” —amounted placing many Varity’s money-losing in one basket. It called for a trans- eggs financially rickety divisions, fer of Massey-Ferguson’s money-losing along debts, created, other to a various newly separately incorpo- called Combines. The foresaw rated subsidiary Massey would fail. But it Combines Massey possibility business as failure, from viewed such Varity’s perspective, That is because than to a defeat. Massey closer to victory several of eliminate Varity’s failure would not only Combine’s would also eradicate vari- divisions, but it performing poorly Combines, transfer to would Massey ous debts Varity Varity’s in the absence of which, reorganization, have to divisions pay. might subsidiaries more profitable reorganiza- Varity hoped the obligations Among from the Massey- those were arising would eliminate tion and other to medical pay benefit promises Ferguson plan’s of Massey-Ferguson’s benefits employees nonpension bene- terminate those Rather than divisions. money-losing (as do), retained it had right fits directly could have fallout that the undesirable to avoid attempted divisions’ failing cancellation inducing accompanied re- and thereby voluntarily to switch employers employees them from its obligation provide lease Massey-Ferguson self-funded new, Massey substituting benefits (effectively for the former Massey-Ferguson benefit plan Combines so, a did employees Insofar Massey-Ferguson’s plan). eliminate —sim- failure would Combines Massey subsequent without distressing remaining and automatically, ply have would otherwise Massey-Ferguson employees —what those pay employees been obligation Massey-Ferguson’s their benefits. divisions to ac- failing

To persuade employees called benefit Varity and plan, cept change employer and talked to them about them together meeting special outlook, its financial Combines’ future business likely Massey their benefits. The and the security employee viability, (which remarks we shall discuss in of Varity’s greater thrust 499-501) detail infra, was that benefits employees’ if transferred Mas- remain secure they voluntarily would knew, however, was As reality Combines. Varity sey found that the District Court Mas- Indeed, different. very creation and from the of its day Combines was insolvent sey net worth hid a million by overvaluing it negative $46 its liabilities. and its assets underestimating em- 1,500 about Massey-Ferguson After the presentation, and assurances voluntarily agreed Varity’s accepted ployees tp also unilaterally assigned Massey the transfer. (Varity 4,000 it owed to some work- benefit Combines obligations to this re- who had retired from Massey-Ferguson prior ers or informing without permission requesting organization, for these employ- Unfortunately them of the assignment.) first loss $88 ended its ees, year Combines Massey under in a second million, receivership, and ended its year benefits. lost their Many nonpension which employees benefit with several retirees whose those employees (along and Combines had Massey Varity assigned obligations consider) we do not now brought whose claims others have been owed the benefits would lawsuit, they seeking had not trans- old, they their Massey-Ferguson plan, ferred Combines. Massey other found, trial, things, the District Court among

After fi- ERISA acting Massey-Ferguson, delib- beneficiaries duciaries, through had harmed plan’s court held that Varity Massey- erate deception. an violated ERISA-imposed thereby Ferguson benefit to administer Massey-Ferguson’s obligation beneficiaries” the interest participants “solely 404(a). The court added ERISA plan. 502(a)(3) the former employees gave Massey-Ferguson

495 right “appropriate equitable relief to ... redress” the deception individually. this harm that had caused them Among “appropriate eq- other remedies court considered Massey-Ferguson uitable relief” was an order that reinstate (which employees former into its own had continued employees provide Massey-Fergusoris benefits to of divisions). profitable The court also ordered certain mone- tary Appeals relief which is not at issue here. The Court the District in rele- dеterminations, later affirmed Court’s (CA8 1994). part. 36 F. 3d 746 vant primarily granted certiorari in this case because We disagreed proper interpre- Appeals about the have Courts 502(a)(3), provision District Court tation of ERISA in this the lawsuit and relief case. Some authorized held applied Appeals section, held that this when have Courts fiduciary obligation, does not authorize a claim of breach only instead authorizes individuals, but awards of relief (as, example, when a relief for suits to obtain capacity, seeking beneficiary representative to com- sues in a funds to the to return embezzled pel a dishonest Oregon Lithoprint 956 Inc., 46 F. 3d plan). McLeod v. (CA9 1995); Telephone and Tele- Bell v. Southern Simmons (CA11 1991). Ap- graph Other Courts Co.,940 F. 2d Eighth case, have not read peals, such as the Circuit any Bixler v. Central limitation into the statute. See such 3d Pennsylvania Fund, F. Health & Teamsters Welfare (CA3 1993); Power American Electric Anweiler v. (CA7 1993). Corp., 3 F. 3d 986 Service Varity Varity First, additional issues. has raised two liability imposes points relevant ERISA section out that the acting argues that it was only upon plan and it fiduciaries; plan fiduciary it de- employer when only and not as a as an argues that, event, employees. it Second, ceived its standard not violate its conduct did imposes. fairly scope all three issues to within We consider be questions Varity posed petition in its for certio- although respect rari, with to the workers who were by Varity, Varity’s petition, for as we construe deceived sufficiently question call into the District it does not Court’s holding fiduciary duty respect breached Massey-Ferguson obligations to the retirees whose benefit involuntarily assigned Massey had been Combines. questions turn mind, limitations in With these presented.

II employee pensions protects and other benefits (for rights, pension vested see ERISA providing insurance §4001 specifying in detail seq.), characteristics et certain §§201-211), (such pensions vest, and see when and how fiduciary applicable general by setting duties forth certain nonpension pension benefit management and of both apply interpret these case, we and In this plans. 404. See statutory fiduciary related and several general duties provisions. recognize duties draw doing that these so, we

In the law trusts, law of the common content from much of their plans ERISA’s enactment. governed before most benefit Areas Pension States, & Southwest Southeast Central See (1985) Inc., 559, 570 Transport, 472 U. S. Fund v. Central (“[RJather enumerating powers explicitly all than fiduciaries, invoked other of trustees and duties general scope of to define the common law of trusts Rep. authority 93-533, responsibility”); H. R. No. their (1973), History Employee Legislative 2 pp. 3-5, 11-13 (Committee Security Print Act of 1974 Income Retirement Labor of the Com- compiled on for the Senate Subcommittee Library by the of Con- Welfare Labor and Public mittee on (1976) pp. 2350-2352, 2358-2360 gress), 93-406, Ser. No. (hereinafter Hist.); Bogert Bogert, Law of Leg. & G. G. (rev. 1992). p. 2d ed. 255, 343 and Trustees Trusts however, We also that trust law does not tell recognize, all, entire After ERISA’s standards and story. procedural reflect a determination that protections partly congressional the common law trusts did not offer satisfac- completely §2(a). See ERISA also H. R. tory protection. Rep. 93-533, 3-5, 11-13, 2350-2352; No. Hist. supra, Leg. 2358-2360; 93-1280, 295, H. R. Conf. No. 302 (1974), Rep. pp. And, even with Hist. 4569. to the Leg. respect “ex- trust-like standards ERISA imposes, Congress courts will man rule that the pected] interpret prudent standards) (and in mind the the other fiduciary bearing spe- id., benefit cial nature and purpose employee plans,” a 'federal 4569, as common 302, 3 Hist. they “develop Leg. law of obligations ERISA-regulated rights ” Bruch, Firestone Tire & Rubber Co. v. U. S. plans.’ Dedeaux, Pilot Ins. Co. (1989) 110-111 v. (quoting Life (1987)). 41, 56 481 U. S. that the law of trusts often will we believe

Consequently, of, determine the outcome will not inform, but necessarily in- duties. In sоme ERISA’s an effort to fiduciary interpret after which trust law will offer stances, only starting point, extent, to what whether, to ask or courts must on go statute, its structure, its or purposes require language And, in trust from common-law requirements. departing con- to take account so, courts have competing may doing em- as desire to offer such Congress’ purposes, gressional benefits, on the one for their enhanced protection ployees create a its desire not to hand, and, other, system on the ex- costs, or is so that administrative litigation complex welfare from offering unduly discourage employers penses, §2 with first ERISA benefit Compare plans place. 73, 78-81 v. 514 U. S. Schoonejongen, Curtiss-Wright Corp. Associates, (1995), and Mertens v. Hewitt 248, 508 U. 262- S. (1993). when We have followed this approach interpreting, here before us. applying, statutory provisions

A Varity’s begin question We with the status. says “person part, that a In relevant statute plan,” subject respect to a and therefore ERISA fi- any duciary that he or she “exercises duties, “to the extent” discretionary discretionary authority respecting or control discretionary authority management” plan, or “has discretionary responsibility in the administration” of the or §3(21)(A). plan. ERISA plan’s employer admin-

Varity and the benefit was both an (em- §3(16) Compare permits. as ERISA istrator, the default administra- ployer circumstances, is, in some tor) 329-330 Co., U. S. v. Amax Coal with NLRB (1981)(common prohibits from hold- fiduciaries law trusts bene- with trust ing positions conflict interest that create (same). ficiaries); Bogert Bogert, supra, 543, & Varity’s activities involved obviously, business But, not all of Varity argues that management administration. or Massey-Ferguson workers with its it communicated when Massey it not adminis- transferring Combines, was about acting only in plan; rather, was its tering managing it employer not as a administrator. capacity an as misrepre- however, that when Court, held The District Varity employee made, regarding benefits were sentations “fiduciary,” “employer,” wearing well as its hat. its was give reviewing legal to the conclusion, deference In compar- recognizing findings Court, factual of the District understanding specific advantage context in ative believe that this case occurred. We which the events of (which challenge) findings does not ade- these factual Varity holding quately support was the District Court’s “discretionary authority” respecting plan’s exercising “management” ‍‌‌​​‌​‌​‌​‌‌​‌​​​​‌​​​‌​​​​​​​‌‌‌​​‌‌​​‌‌​​​​‌​​‍when it made these mis- or “administration” legal independently representations, holding which we have reviewed. following:

The relevant factual circumstances include the spring Varity employees In of 1986, summoned the money-losing Massey-Ferguson’s meeting divisions to a headquarters Massey-Ferguson’s corporate for a 30-minute presentation. employees videotaped The saw a 90-second message Varity president Porter, from Ivan a vice and Mr. Massey newly appointed president. They Combines’ also (a) several-page, compar- received four documents: detailed employee Massey- between the benefits offered ison (b) Ferguson Massey Combines; and those offered (c) question-and-answer transcript sheet; of the Porter (d) acceptance videotape; with an and a cover letter form. employee Each of these documents discussed benefits and briefly general plans, terms, benefit some others length and in detail:

(a) side-by-side longest document, The benefits com- fairly description parison, detailed of the benefit contained a object plans. the em- transfer, Its was to show after says, ployees’ benefits would remain same. It for exam- x-ray ple, Massey-Ferguson’s plan, “[diagnostic that, under laboratory expenses paid will be on the basis of reason- сustomary App. charges able and for such services.” 70. It Massey repeats describing then the same sentence Com- laboratory “[diagnostic x-ray expenses” benefits. bines’ way. Ibid. It about 20 different benefits in this describes (b) eight questions question-and- and answers on the answer sheet include three that relate to welfare benefits or pension plan to the ERISA also administered: happens my pension, benefits, etc.? 3. What “Q. you [Massey “A. 3. When transfer to MCC Com- programmes pay bines], levels and benefit will remain seniority unchanged. pen- will no There be loss sionable service. you expect 4. Do the terms and conditions of

“Q. employment change? Employment 4. conditions in the future will de-

“A. ability Massey pend Corpora- on our make Combines necessary changes if a success and are considered tion they appropriate, will be or made. protected pensions 8. Are the MCC?

“Q. by Responsibility pension benefits earned “A. 8. Massey Corpora- employees transferring to Combines Massey by Corpora- being Combines tion is assumed tion Pension Plan. Massey Ferguson Pen- held in assets which are

“The as determined actuar- benefits Plan to fund such sion Massey being to the transferred calculations, are ial and assets Corporation Such benefits Plan. Combines protect legislation that protected same will be Plan. Massey Ferguson Pension a result change pension benefits as be no “There will Corporation.” Massey Combines your transfer Id., 75-77.

(c) videotape message re- transcript 90-second question-and-answer in the peated the information much of viability: Massey adding Combines’ about assurances sheet, Massey restructuring Combines created financial “This necessary to en- provide the funds Corporation and will con- viability. that with the I believe sure its future Massey you make help support we can tinued business Corporation the kind of successful Combines enterprise want to work for. we all which “____When your employment the Mas- you transfer pro- pay sey Corporation, levels and benefit Combines unchanged. will no loss of grams There be will remain Employment condi- seniority pensionable service. or depend on the success of tions the future will changes Corporation be Massey should Combines necessary, they appropriate will be made.... deemed “Finally, despite depression persists the in which the economy,I North American am excited about the future Corporation.” Massey Id., of Combines at 80.

(d) paragraphs, repeated in five letter, The cover short verbatim these benefit-related assurances: accept you employee Massey

“To us as an enable to Corporation process and continue Combines to to the complete you, require you payment of benefits to we that and this the information below return letter .... Massey you accept employment with Com-

“When pay programs Corporation, and will levels benefit bines seniority unchanged. There will be no loss of remain Employment in pensionable the or service. conditions Massey depend ability to make Com- will on our future changes Corporation if are success, a and consid- bines they necessary appropriate, will be made. ered company, very optimistic has all that our new are “We challenges the new bright future, and are excited facing all of us.. . . uninterrupted to continuation ensure

“In order signed accept- please your pay benefits, return this and employment. Id., at .. .” 82-83. ance of determined, material, the District Court record Given this meeting, considerable key to a matter, the that as factual them described benefits, for the documents extent, about was similarity past and future explained between detail, in they employees plans principle, assured in praсtice. benefits to receive similar continue would conveyed message to that the concluded basic District Court Massey-Ferguson transferring from employees was that significantly undermine the not Massey would Combines security given facts, view And, their benefits. legal correct Court reached the District believe part, namely, spoke, significant conclusion, capacity as administrator. Varity’s To whether actions fall within statu- decide interpret “fiduciary” tory must acts, we stat- definition of fiduciary activity scope dis- utory limit the terms which plan “management” “administration.” cretionary acts of §3(21)(A). self-defining, and These words are clearly nor out- activity falls within here neither issue understanding The dis- of these words. common side dictionary interpretive assistance. to the sent looks help in Though sometimes post, dictionaries at 528-529. important here look it more matters, we believe such years, given to terms has which, over law, common legal mean- “fiduciary” trust “administration” such to normally presume, meant refer. ing which, to Darden, U. S. Co.v. 503 g., Mut. Ins. e. Nationwide See, (1992). understanding of fidu- ordinary trust law The 322 to as an adminis- is that act ciary a trust of “administration” pow- imposed, or exercise perform is the duties trator to conferred, trust documents. See Restatement ers § (Second) (1957); § 2d, 76 Trusts 321 Am. Jur. of Trusts 164 404(a). (1992). of trusts also under- law Cf. powers implicitly to confer “such stands a trust document carrying necessary appropriate for the out of the (cid:127)as are Fratcher, purposes” & W. Law of the trust. A. Scott (4th 1988). Bogert Bogert, p. & 186, ed. See also Trusts §551, 41; States, of Trusts and Trustees Central Law likely Conveying about the future S., at 570. information U. thereby permitting an plan beneficiaries make benefits, participation, continued would seem informed choice about carrying “appropriate” an power out an exercise of to be specifically plan important purposе. ERISA itself all, After give infor- requires beneficiaries certain administrators 104(b)(1), §§ plan. g., See, about the e. ERISA mation 105(a). part of administrative administrators, And as their frequently responsibilities, than the offer beneficiaries more requires exam- minimum information that the statute —for meaning- ple, answering questions about the beneficiaries’ plan easily so the terms of a that those beneficiaries can more plan’s To offer obtain the benefits. beneficiaries detailed help plan information in order to them decide whether to essentially plan plan- is kind of with the same remain (Second) Agency activity. Cf. Restatement related 229(1)(1957) activity (determining an is whether within the examining part by employment” whether it “scope of . . . authorized”). general as “of the nature same reveals, letter, Mr. Porter’s far as the record Moreover, as came from those within videotape, other documents and the authority as fiduciaries to communicate firm had who Varity not that it does claim author- plan beneficiaries. meeting connected with the special individuals, ized 402(b)(2) speak as administrators. documents, (a may “procedure under the for the describe operation adminis- responsibilities allocation plan”). tration

Finally, employees, in the found circumstances reasonable thought have was Court, could District employer capacity communicating in its as with them both capacity em- administrator. Reasonable consciously distinguished between might not have ployees they have that the em- But would known two the roles. expert plan’s and had knowl- ployer was their administrator plan edge their worked. The central conclusion about how secure”) strength (“your well have drawn are could benefits expertise, could and one reason- from their awareness that importance ably employer, aware of the that the believe matter, so intended. in that the factual context which conclude, therefore, We plan-related combined with the made, the statements were activity, by engaged plan- in had nature of the those who provide authority together sup- related to do sufficient so, Varity legal port that for the District Court’s conclusion was acting fiduciary. as a

Varity contrary arguments. Varity First, raises three ar- gues engaged plan it was not administration because specific provisions ERISA, neither the disclosure nor the specific App. required instruments, 5-26, of the terms make these But that does not mean it to statements. making engaging them, administration in as was suggest. post, at 531-532, the dissent to seems (or trust) administration than n. 12. There is more to by specific imposed complying simply duties statutory regime; it the ac- also includes documents achieving “ordinary natural means” of are tivities that supra, Bogert, “objective” plan. Bogert & fiduciary duty primary of the function Indeed, at 41-52. discretionary powers which exercise of constrain the by imposed specificduty trust no other are controlled duty ap- legal regime. If the instrument or the already nothing controlled than activities plied to more purpose. legal serve no specific duties, it would other the statements Varity says it made that when Second, Mas about statements Court—the worried the-District most speaking have been sey “bright must future”—it Combines’ (and fiduciary), about for statements employer not as virtually nothing subsidiary’s future have financial a new argument plans. But this administering benefit do with finely. ulti too meeting’s parses communications convey “your are benefits message Varity intended mate — upon repeated depended part assurances secure”— part upon de “unchanged,” in would remain benefits upon part assurances comparison benefits, and in tailed Vanity’s “bright” Massey future. finаncial about Combines’ upon un necessarily each have focused would not workers pri separately, because what derlying supporting statement primarily interested marily what them, and interested conclu ultimate Court, was the truthfulness District not ad transferring Massey Combines would sion that of And, affect the their benefits. versely security (see supra, at 499-501), statements context Varity’s present to an act of about of benefits amounted the security plan communicated its That Varity intentionally administration. (some linked set of statements conclusion a closely through the via benefits, others concerning concerning directly plan this conclusion. does not of the change bility corporation) post, 529-531, hold, the dissent We as do suggests, because it made state- acted a fiduciary that simply Varity condition or because “an its financial ments about expected out to have an adverse turn[ed] business decision ordinary Post, Instead, we 539. accept on the plan.” impact drawn, inferences and factual found, facts undisputed intentionally connected Court, District Varity namely, health to financial about Combines’ its statements Massey benefits, so that the future of it made about statements benefits was about the of security communication intended to Pet. Cert. See rendered materially misleading. App. intentional we hold that 65, 68. And 64a-65a, making ¶ ¶ benefits in con- the future of about plan representations text is act of administration. an plan to amend an decision

Third, says Varity employer’s do) an (as is not act had the a right terminate plan Curtiss-Wright Corp., S.,U. administration. plan information asks, it could then, conveying How at 78-81. adminis- an act be likelihood of termination plan about the or terminating it be true that amending While tration? may trust) (or plan common-law is beyond power plan an act (or trustee)— therefore, cannot be and, administrator not fol- does or “administration” —it “management” plan future about the statements likely low that making As administration. is also the scope beyond have, often com- administrators above, explained to communicate with exercise, discretionary authority monly future of benefits. beneficiaries about the 506

B question Varity’s deception The second violated —whether fiduciary ERISA-imposed obligations brief, for a af- —calls requires “fiduciary” answer. ERISA firmative to “dis- respect plan solely charge with to a in the his duties interest 404(a). participants beneficiaries.” of the and ERISA To significantly deceiving participate knowingly plan’s in employer money in order to save the at the ben- beneficiaries “solely expense is not to act the interest of the eficiaries’ As participants held, and beneficiaries.” other courts have duty loyalty by “[l]ying with the owed all is inconsistent 404(a)(1) ERISA,” codified in section fiduciaries and Co., Ins. Yards Co. v. Penn Mut. Peoria Union Stock Life 1983). (CA7 States, also 472 320, 2d Central 698 F. (ERISA duty includes common- at 570-571 S.,U. Bogert, Bogert duty loyalty); Law of Trusts & law requires (duty loyalty trustee 543, at 218-219 Trustees beneficiaries); 2A & fairly honestly Scott to deal (same); pp. 311-312 Restate- of Trusts Fratcher, Law (same). (Second) the breach Because of Trusts ment below, we uphold duty the decision is sufficient of this have fiduciaries question whether not reach the need on their fiduciary duty information any disclose truthful employee inquiries. response initiative, or own apply we are to recognize, above, as mentioned We special na- “bearing mind the standards common-lawtrust plans.” employee H. R. Conf. benefit purpose of ture and Leg. find But we can Rep. Hist. 4569. 93-1280,at No. otherwise, adequate in the statute here, basis no Varity, acting might as a interpretation special insulate fiduciary, consequences legal of the kind conduct from the (intentional liability misrepresentation) that often creates among strangers. even possible Varity suggests, are of one reason aware,

We departure ordinary principles. In for a from trust law ar- guing remedies for breaches of obli- about ERISA’s gation, Varity says Congress intended ERISA’s fidu- ciary protect only standards to integrity the financial plan, not individual says Varity, intent, beneficiaries. This Congress provide shown the fact that did not remedies for individuals harmed breaches; such rather, limited relief to remedies that would benefit argument fails, itself. This however, because, in our view, provide ‍‌‌​​‌​‌​‌​‌‌​‌​​​​‌​​​‌​​​​​​​‌‌‌​​‌‌​​‌‌​​​​‌​​‍did remedies for individual beneficiaries by fiduciary duty, harmed breaches of as we shall next discuss.

C remaining question before us is whether or not the provision invoked, remedial of that the beneficiaries ERISA §502(a)(3), ERISA authorizes this lawsuit for individual re- lief. That subsection is the third of six subsections con- (as provision tained within Enforcement” it ERISA’s “Civil lawsuit): at the stood times relevant to this (a) may brought— A “Sec. 502. civil action be “(1) by participant beneficiary— a or

“(A) (c) provided for the relief for in subsection [providing liquidated damages this section for for failure provide request], certain information on or “(B) to recover benefits due to him under the terms plan, rights of his to enforce his under the terms of the plan, clarify rights or to his to future benefits under the plan; terms of the

“(2) by Secretary, by beneficiary participant, or appropriate relief or for under section 409 “Liability Fiduciary Duty”]; [entitled for Breach of “(3) (A) by participant, beneficiary, or enjoin any practice any provision act or which violates (B) plan, this title or the terms or to obtain of other (i) appropriate equitable to redress such relief (ii) any provisions violations or this title enforce plan; or the terms “(4) by Secretary, participant, by or or benefi- ciary appropriate relief in the case of a violation 105(c) [requiring registration of certain disclosure tax statements];

“(5) (b), except provided in as otherwise subsection (A) any Secretary enjoin practice or which act (B) any provision title, violates of this or to obtain other (i) equitable appropriate relief to redress such violation (ii) provision any or title; to enforce of this “(6) penalty Secretary civil to collect (i).” 502(a), 891, 29 88 Stat. under subsection added). (1988ed.) 1132(a) (emphasis U. S. C. subsection, which the third Court held that The District and the relief this suit italicized, authorized have satisfy plaintiffs most of that the concedes awarded. plaintiffs namely, are requirements, that the provision’s suing they “beneficiaries,” that are and plan “participants” or 404(a), a violation “equitable” relief to “redress” for agree, Varity not “provision title.” does a of this which is “ap- equitable is relief that however, that this lawsuit seeks a support conclusion, makes propriate.” In of this four-step argument: complicated, 502(a)’s says second subsection Step One: Section plaintiff may bring appropriate relief under action “for civil 409.” section 409(a), turn, reads:

Step Two: Section Fiduciary Duty “Liability for Breach (a) respect Any person who is 409. Sec. obliga- any responsibilities, plan of the breaches to a who upon this title imposed fiduciaries tions, duties good any plan personally to such liable to make shall be resulting breach, plan each from such losses to any profits of such to restore to such through use have made of assets which been subject fiduciary, equi- to such other and shall be table or remedial as the court deem may appro- relief (Em- removal such priate, ...” including fiduciary. added.) phasis

Step Three: In Mut. Russell, Massachusetts Ins. v. Co. Life 473 U. this (1985), S. Court to the above- pointed §409 and concluded this italicized section language (and (2)) subsection did remedial not companion provision, for authorize the suit punitive plaintiff’s compensatory who had an administrator de- wrongfully damages against of her benefit claim. first two italicized layed payment §409’s were show that “draftsmen said, the Court phrases, assets, concerned with the misuse of possible primarily plan, the entire rather that would and with remedies protect Id., an individual than with the beneficiary.” rights that, in this added). The added con- Court 142 (emphasis (“other or remedial text, the last italicized equitable phrase relief”) relief not does “authorize except Id., at 144. itself.” Russell, as well as ERISA’s

Step Four: lan- In light the third cannot structure, one read and purposes, guage, including (as us) (the before “ap- subsection subsection individual, action for kind of action —an very propriate”) ex- this found Congress relief —that Court rather than plan, however, (2). cluded It in subsection point, Rus- have We reexamined must with Varity. disagree sell, as well structure, as the relevant statutory language, the beneficiar- And, view, in our they support purpose. statute, ies’ view of Varity’s. second

First, Russell discusses §502(a)’s subsection, not its third that the found subsection, and Court language second (§409) that the section a statutory limiting appears third, cross-references. Russell’s subsection, plain- not subsection, id., the third disavowed reliance on tiff expressly she was 139, 5, because compensatory at n. seeking perhaps (3) and subsection authorizes only and “eq- punitive damages Mertens, 256-258, and S., uitable” relief. See 508 U. damages “equitable (compensatory punitive are not n. 8 409(a) (3)); meaning of subsection relief” within relief”) (emphasis (authorizing equitable “other or remedial added). complicating factor Further, involved a not Russell (subsection provision present here, remedial in that another (1)) injury already provided specific of relief for the sort benefits), (wrongful denial of but said plaintiff had suffered damages, recovery “nothing or of extrаcontractual about delay possible consequences of in the adminis- about the disputed supra, Russell, processing claim.” of a trators’ lead us to concludethat Russell does 144. These differences explicitly, of implicitly the outcome control, either or case before us. (3)’s Varity. language does not favor

Second, subsection (3) “appropriate equitable relief” of subsection The words — any provision practice which violates “act or to “redress” relief enough to individual for cover title”—are broad Varity argues fiduciary obligation. the title breach of Fiduciary Duty” “Liability Breach §409 —means — (2)) (and companion, cover all such its subsection that 409 says. provision liability. title or the that is not what the But suggests contrary. language in the statute And other 502(1), pen- a certain civil calculates added Section by alty percentage a court be the sum “ordered participants by paid to a such ... (5) (5). is identi- Subsection subsection beneficiaries” (3), by except it suits authorizes cal subsection participants Secretary, and beneficiaries. than rather 502(a)(5). 502(a)(3) provision, Compare new This the sort instances which therefore, seems foresee (5) implication, provided and, both subsection relief (3), “participants include an award subsection would “plan,” beneficiaries,” for breach of fidu- rather than to ciary obligation. Varity support. the statute’s structure offers little

Third, specifically cross-reference) §409 (through fiduciary its to breaches of duty, refers, while the third as a kind of “catch sub.section argues all Title One violations. And it that a all,” to ERISA namely statutory specificgoverns construction, “the canon of (fidu specific general,” more means that the second over breach) general ciary subsection makes the more third (catchall) fiduciary inapplicable to claims of subsection simply “rules construction, however, are breach. Canons “help sometimes courts determine the of thumb” which will meaning legislation.” Connecticut Nat. Bank v. Ger (1992). apply properly To a canon main, 503 U. S. rationale. This Court has under one must understand its (“the specific governs general”) .present canon stood applying general provision warning against a when as a spe a more doing limitations created so would undermine g., Airlines, provision. e. Morales v. Trans World See, cific (1992);HCSC-Laundry v. United 374,384-385 Inc., 504U. S. (1981); v. Trans Fourco Glass Co. 1, 6, 8 States, 450 U. S. (1957). Corp., Yet, in 222,228-229 353 U. S. mirra Products why intended one believe that should case, specific in 409 as a limitation? remedies reflecting special a contrary, 409 as one can read To the management without asset about congressional concern contain section to Congress intended that finding also every kind of of remedies set the exclusive fiduciary has makes clear that all, After breach. managing to, and in addition obligations than, other 3(21)(A) “ex “fiduciary” who (defining as one assets. See manage respecting discretionary authority . . . ercises disposi management respecting plan or . . . of such ment added). assets”) example, as the (emphasis For tion of engages post, administrator concedes, dissent discretionary making determination act when in a under the benefits is entitled a claimant whether about 404(a)(1)(D); Dept. of documents. terms of (1995) §2509.75-8 75-8,29 CFR Interpretive Bulletin Labor, (“[A] who has the final to authorize plan employee authority or disallow benefit in where a exists payments dispute cases as . . . would be a interpretation plan provisions Reynolds Moore v. Metals Co.Retirement Pro fiduciary”); Sogen- Birmingham gram, (CA6 v. 454, 1984); 2d 457 740 F. Plan, Corp. Intern. Retirement Swiss 521-522 718 F. 2d Russell, 1983). in (CA2 out And, as Court pointed for remedy S., specifically provides U. at to the with interpretation of fiduciary duty respect breaches claims, one that and the documents payment of plan of the second subsection cross- the framework outside runs directly injured and one that §409, referenced Firestone, 489 U. S., 502(a)(1)(B). also beneficiary. conclude that provided we not should 108. Why sorts of breaches of other other for yet other remedies yet section? remedial another, “catchall” obligation overall structure. § 502’s is consistent Such reading focus upon specific six subsections of that section’s Four e., informa- i. of benefits areas, denial the first (wrongful related plan’s the second tion), (fiduciary obligations (tax fourth registration), financial integrity), of the other two sub- (civil The language sixth penalties). “catchalls,” two fifth, creates third and the sections, for relief” “any” statutory equitable “appropriate providing that these “catchall” pro- This structure suggests violation. net, equitable act as offering visions safety appropriate §502 does not caused violations relief for injuries ar- And, contrary Varity’s elsewhere remedy. adequately that con- there is history nothing legislative gument, 93-127, See S. No. p. flicts with this Rep. interpretation. version of enforce- (1973), 1 Hist. 621 Senate (describing Leg. intended to both Secretary ment “provide provisions for and beneficiaries with broad remedies and participants H. R. [ERISA]”); violations of Rep. redressing preventing House version 93-533, 17,2 No. Hist. Leg. (describing terms). in identical purposes

Fourth, ERISA’s basic a reading favor provides plaintiffs third remedy. subsection that with a says it statute itself seeks protect. participants . . “to the interests of . . . . and . . by establishing beneficiaries ... standards conduct, obligation responsibility, and for fiduciaries . . . . and . . providing appropriate ready remedies ... and access 2(b). to the Federal courts.” ERISA 404(a), general objective, furtherance of re- Section discharge “solely quires to their duties the in- fiduciaries participants terest of the and beneficiaries.” Given these why imagine objectives, it want is hard to would fiduciary obligation of that harm indi- to immunize breaches remedy. injured by denying a beneficiaries viduals strong contrary argument supporting Varity find a Amici congressional subsidiary purpose important, need anin —the system. They say holding that a sensible administrative for fiduciary to permits individuals enforce obli- the Act directly to to them as individuals threatens gations owed thereby plans and dis- of welfare benefit increase cost offering courage employers a ad- them. Consider from ground pay surgery for on to ministrator’s decision coverage. plan’s present, courts At it falls outside the degree the ad- of deference to with a such decisions review gives the admin- provided “the ministrator, benefit authority discretionary eli- to determine istrator or plan.” terms of to construe the gibility for benefits amici, happen, ask will 115. But what supra, at Firestone, of “denial benefits” repackage his or her beneficiary can if a duty?” a Wouldn’t of claim for “breach claim as a forgo hold the they to deference have ask, then court, expected of fi- “rigid level of conduct” to the administrator not then be consequence, there would And, aas duciaries? hearing benefit “incompatible legal courts standards two beneficiary upon depending whether disputes” claim virtually simply benefits,” or a claimed “denial identical fiduciary duty?” “breach of See Brief for Chamber of they too, add, Consider, as Amicus Curiae 10. Commerce trying to decide whether certain medical review board necessary. proposed surgery medically Will the board’s “duty surgery-seeking loyalty” bene- of a to awareness inadequate countervailing, ficiary not risk attention to preserve important, to need to constrain costs in order but plan’s 11. Id,., funds? duty loyalty legally amici warn that enforcеable Thus, management beyond plan to individual that extends asset consequences. beneficiaries will risk these and other adverse interpret plan as re- tend to documents Administrators will trying preserve quiring payments instead to individuals supervise try nonexpert will too courts assets; guess, decisions closely, the often technical and second ordinary lawyers complicate will and, administrators; “fiduciary duty” by dressing up in cloth- them claims benefit they consequences, conclude, ing. need avoid these The Varity’s position. requires accept us to unlikely mate- raise seem to us concerns that amici fiduciary obli- First, however, reasons. for several rialize, seeking by relief for them- gation, beneficiaries enforceable necessarily payment nonpayment. over selves, does not favor preserve recognizes the need law of trusts common satisfy present, re- claims and future, as well as assets to impartial the interests of quires account of a trustee to take (Second) § 183 of Trusts all Restatement beneficiaries. See (same). duty (discussing impartiality); id., 232 of characterizing as a of a of benefits breach Second, denial duty necessarily change a the standard not does reviewing apply deci- court when administrator’s would deny all, Firestone, After which authorized sion to benefits. gives ad- review when the itself deferential court discretionary authority, upon ministrator based its decision

515 govern the same common-lawtrust that doctrines standards (Second) of of conduct. See Restatement Trusts (“Where upon discretion conferred the trustee with respect power, subject to the exercise of a its exercise is not except prevent an court, to control abuse (as discretion”) quoted Firestone, S., of his U. trustee 111). at equitable “appropriate” re- statute authorizes

Third, the fashioning “appro- expect courts, that We should lief. “special keep priate” equitable will in mind nature relief, respect plans,” employee and will purpose benefit of remedies “policy in the inclusion of certain reflected choices Co., S., Ins. Pilot U. of others.” the exclusion Life 147; S., Mertens, 508 U. Russell, S., also U. at 54. See expect Thus, that where we should at 263-264. beneficiary’sinjury, adequate provided relief for elsewhere equitable likely relief, for further be no need there will “appropriate.” normally not be would case such relief which supra, at 144. Russell, Cf. plaintiffs in case case here. The that is not the

But they because proceed subsection not under could first Massey-Ferguson and, longer no members were [them] terms of under the due therefore, no “benefits had 502(a)(1)(B). proceed They not could plan.” [the] § provision, tied because the second subsection remedy beneficiaries. for individual provide does rely subsec- on the third They must supra, at 144. Russell, not aware remedy all. are We they no have tion remedy would purpose denial any ERISA-related remedy is consist- granting a Rather, believe serve. pur- statute, Act’s language literal ent with the law. poses, pre-existing trust Appeals is judgment the Court reasons, the

For these

Affirmed. 516 whom Justice O’Connor and Thomas, with

Justice Justice Scalia dissenting. join, Russell, Ins. Massachusetts Mut. Co. v. 473 U. S.

In Life breach under (1985), held that actions for 134 fiduciary (1988 1132(a)(2) ed.), 1109, §§409 §§ 29 C. 502(a)(2), U. S. Retirement Income Security Employee provisions Act) (ERISA civil or for Act of 1974 specifically designed duties, in a must “be brought repre- enforcement a whole.” 473 on behalf as sentative capacity 502(a)(3), that 142, The holds U. n. 9. Court S., today catchall remedial 1132(a)(3), provision S. C. U. the individual relief 502(a)(2), follows provides directly be unavailable under that we found to breach 502(a)(2). with text cannot be This squared holding to reach it ERISA, repudiation requires structure in Russell. The also finds Court of our of much reasoning to fiduciary obligations was subject na- of a because it activity “plan-related engaged to be con- reasonably perceived ture” plan participants Ante, fiduciary. in the ducted capacity employer’s no first, statutory has basis This like the 503. holding, at odds are fundamentally Because these holdings text. I enacted respect- scheme by Congress, statutory dissent. fully

I A observed, and retic- is, we have ‘comprehensive “ERISA decade of statute,’ congressional ulated product benefit system.” of the Nation’s employee private study Associates, (1993) Mertens Hewitt S. v. 508 U. (quot- Guaranty Corpora- Corp. v. Pension Nachman ing Benefit tion, (1980)). Act “an enormously U. S. resolved innumerable dis- statute that detailed complex all interests —not between competing putes powerful 517 plaintiffs.” potential favor of S., 508 U. at 262. Given “evident care” with which was crafted, we have tra- ditionally tamper [the] been “reluctant to with enforcement supra, Russell, scheme” embodied the statute. at 147. Accordingly, repeatedly by plan have declined invitations participants and beneficiaries to extend benefits and reme- by statutory specifically See, dies not authorized text. g., supra, (rejecting Mertens, e. claim af- at 262 that ERISA nonfiduciary knowingly against cause of action who fords a breach); fiduciary supra, Russell, at 145-148 participates in a implied private (declining an cause of invitation to create damages); v. Pilot Ins. Co. extracontractual action for Life (1987)(holding enforce- that civil Dedeaux, 481 U. S. 502(a) § supplemented is not be codified at scheme ment remedies). by state-law more care ERISA was crafted is the with which

Nowhere for the enforcement in the Act’s mechanism than evident provi- regulatory Act’s fiduciary Part 4 of duties. “Fiduciary Responsibility,” §§401-414, see entitled sions, de- assigns “a number of fiduciaries §§1101-1114, U. S. C. supra, at 251. responsibilities.” Mertens, duties tailed § liability provision, 409, which includes its own 4 also Part “Liability for Breach in Russell. Entitled we considered Duty,” Fiduciary provides: respect to a

“Any person who ais obligations, or any responsibilities, breaches who by subchapter upon shall imposed fiduciaries duties good losses make such personally liable to be re- breach, and to resulting such from each plan any profits which of such to such store through use of assets of made been have equitable subject to such other fiduciary, and shall be may appropriate, deem the court relief as or remedial 409(a), fiduciary.” codi- including removal of such (1988ed.). 1109(a) in 29 U. S. C. fied In order en- creates 409, however, liability. Section §409, created and obtain remedy force right 502(a)(2), one of ERISA’s suit must bring plaintiff Rus- civil enforcement provisions.” “carefully integrated supra, at sell, That section allows plan participants, 146. as well as fiduciaries, Secretary beneficiaries, relief” ... for to a “civil action Labor, appropriate bring enforcement currently § Of the nine provisions under 409. 502(a)(2) is the one that 502(a), § § specifically at codified for fiduciary duty. suit breach authorizes not to in this case chose proceed through The plaintiffs framework, constructed designed specifically this carefully action for claims of breach. a cause of to provide of fi- their claims breach Instead, brought plaintiffs 502(a)(3) Act, which claim § under they duciary duty 502(a)(3), for relief. Section alternative basis an provides (1988 1132(a)(3) ed.), § is a catchall in 29 U. C. as codified S. a civil action remedial that authorizes provision (A) or to ‍‌‌​​‌​‌​‌​‌‌​‌​​​​‌​​​‌​​​​​​​‌‌‌​​‌‌​​‌‌​​​​‌​​‍enjoin “by beneficiary, participant, which of this act or violates any practice any provision (B) or the terms of the or to obtain subchapter plan, (i) to other relief redress such appropriate equitable (ii) violations or to enforce of this sub- any provisions or the terms of the chapter plan.” are relief Since to redress a equitable respondents seeking §404, is a claimed violation of which in the same provision 502(a)(3) § § 502(a)(3), and since authorizes re- subchapter any for breach of in that covery re- provision subchapter, their claim of contend that breach spondents fiduciary duty 502(a)(3). § under the cognizable Re- plain language 502(a)(3) have textual if spondents plausible argument, is read without reference surrounding provisions our precedents. 502(a)(3)’s decision under

Respondents’ proceed catch- all 502(a)(2) §§409 of under instead was provision obvi- ously by our in motivated decision Russell. We held Rus- §409 recovery only by sell that authorizes “the anas entity,” recovery by at and does not S., 473 U. allow for participants. Id., at 139-144; id., individual see also (“Congress section did not intend that to authorize itself”). except respondents, relief for the how- plan; they ever, do not seek relief on behalf rather wish individually. question reserved the recover We whether 502(a)(3) might individuals be available for relief respondents rightly id., 139, 5, understood Russell, n. only possible securing route for provision to offer the their desired relief. 502(a)(3) vacuum, however, in a read have to

We would great respondents’ went favor. to find fiduciary obligations and du- lengths to enumerate ERISA’s liability for breach §§410-412, to create §§401-408; see ties, § to authorize a civil suit obligations, and to 409, see those of 502(a)(2). 502(a)(3), § Section provisions, see enforce those provision even to that fails generally worded a contrast, in is statutory commonplace “[I]t duty. of fiduciary is a mention general.” governs Mo- specific that the construction (1992) 374, Airlines, Inc., 504 U. S. Trans rales v. World Inc., Fitting Gibbons, 482 U. S. T. v. J. (citing Co. Crawford ‘[hjowever (1987)). inclu- “[T]he is settled that law 437, it “will not be language statute, general of a may be the sive with in another specifically dealt apply to a matter held to Trans- Fourco Glass Co.v. enactment.”’” part the same (citations (1957) Corp., 222, S. 353 U. Products mirra Congress omitted). here, where, true particularly This deliberately and has scheme comprehensive enacted has specific See solutions. problems with targeted specific (1981) (per 61, 450 U. S. HCSC-Laundry States, v. United ap- curiam) (This statutory construction” principle of “basic [provisions] interrelated are two “particularly plies when being parts same of” the in fact closely positioned, both and scheme). this basic rule of statutory Applying statutory §§409 I intended and conclude construction, Congress for 502(a)(2) mechanism bringing exclusive to provide fiduciary duty.1 claims breach to allow individual intended plan partici- If had Congress breaches, I for pre- relief to secure equitable pants 502(a)(2), §§409 in that clear have made it would sume to address breach of fidu- enacted specifically provisions Russell, claim S., at 144 473 U. (rejecting duty. ciary to for failure timely provide extracontractual damages for “the statutory provision explicitly because benefits part his action to enforce an bring beneficiary authorizing about nothing 502(a)(1)(B) says rights — — (citation omit- damages”) of extracontractual the recovery ted). for relief in fact, did In provide equitable or remedial re- other which authorizes “such equitable redress a breach the court deem lief as may appropriate” such relief to be recov- but it allowed only fiduciary duty, extend relief did not equitable ered by plan. Congress and we reversed Court to individual plan participants, id., in Russell for holding that it did. See 140. Appeals I have to would con- Thus, accept majority’s position, for individual clude not provide only Congress forgot it intended to 502(a)(2), §§409 but that relief clearly 502(a)(3), catchall provision individual relief provide mention breach uses that fails even to language held author- that in which we have already identical to izes relief on behalf of plan. Compare equitable 1 across “[rledundaneies other we have recognized On occasions and that where statutes over drafting,” are not unusual events in statutes ‘“positive repugnancy’” both absent a lap, give courts should effect to Germain, 249, them. Connecticut Nat. Bank v. 503 U. S. 253 between (1842)). States, (1992) Ger But (quoting Wood United v. 16 Pet. 363 main and similar cases involved claims of which we have implied repeal, irreconcilably con long held should not be unless two statutes recognized enacted, flict. Germain simultaneously provi not involve consecutive did Act, sions of the same as in case. this

521 the court . . . relief as “such . . . § equitable (authorizing 502(a)(3) §with (authorizing “appro- deem may appropriate”) relief”). I would with While disagree equitable priate case, in any strained statutory interpretation majority’s is rendered of inadvertent omission espe- assumption “[t]he inter- of ERISA’s close consideration upon cially suspect scheme, remedial interrelated, interdependent locking, and reticulated in turn of a which is ‘comprehensive part ” Nachman at 146 Russell, Corp. (quoting statute.’ supra, 361). S., at U. Corporation, v. Pension Guaranty Benefit Service, & v. Lanier Collection Agency also Mackey (1988).2 Inc., 486 U. S. 502(a)(3) also renders §of portion

The reading majority’s 502(a)(3) § holds, the Court If, as today §of 409 superfluous. then that sec- of fiduciary duty, relief for breaches authorizes as on as well relief on authorize must tion behalf 502(a)(3) relief § limits Nothing individuals. behalf of §502(a)(1)(B), C. 29 U. S. believes majority apparently 2The re fiduciary duty with 1132(a)(1)(B), for breaches remedy “provides claims.” and the payment documents interpretation to the spect 144). Since, Russell, Ante, S., majority’s in the U. at (citing at 512 502(a)(1)(B) fiduciary for breach out recovery view, § allows for individual 502(a)(2), §§409 wonders majority created the framework side yet other remedies Congress provided not conclude that should we “[w]hy another, fiduciary obligation of other sorts of breaches yet for other Ante, at 512. section?” ‘catchall’ remedial understanding, majority’s to the Contrary simple. answer is breach, and 502(a)(1)(B) for does not create a cause of action Thus, the entire prem- claim that it does. Russell rejected expressly 502(a)(1)(B) exclusively deals is flawed. Section question ise of the beneficiary participant It allows a under the rights plan. contractual him the terms due to under action “to recover benefits a civil bring his clarify of the or to plan, under the terms rights to enforce his his plan, we recognized As plan.” under the terms to future benefits rights Russell, of extracon- recovery about “says nothing provision S., for the Court’s justification 144. If 473 U. damages.” tractual breach recovery individual that we should allow holding 502(a)(1)(B), then 502(a)(3) under is available recovery such since all. justification is no really there 404(a),

solely And which the holds to to individuals. Court 502(a)(3), provides protection pri- through enforceable be plan. supra, marily, exclusively, Russell, for if 502(a)(3) partici- n. But if allows 142-143, at and 10. plan, equitable on behalf of the then pants to relief secure equitable is appropriate for the promise relief 409’s yet another entirely Thus, the Court violates redundant. namely, statutory construction, that rule of well-settled interpretations that of statutes disfavor should “courts superfluous.” v. language Connecticut Nat. Bank render (1992). this result course, Of S. Germain, U. by reading the as written simply statute avoided be could trump specific by respecting enactments the canon carefully like ERISA. general constructed statutes ones

B governing “specific simply case about the This is not solely general,” a case about inter- however. Nor 502(a)(3). §§409 every turn rеlationship At between ignores, statutory proof, majority most which lies partici- individual to authorize never intended pants ERISA. breach under to secure relief majority gives in Rus- short shrift to our decision also by overlooking the lan- ante, It is at 509-510. sell. See reasoning guage and our Russell and structure of ERISA majority that it does. the conclusion is able reach reasoning begin our failure to address I Court’s that under analysis held Russell in Russell. We and § brought duty [must] be breach of 409, “actions for capacity as whole.” representative on behalf in a ap- holding in Russell Because the n. 9. S., 473 U. 502(a)(2), §§409 plied and because we reserved only §502(a)(3), id., see question of individual relief under majority not con- that “Russell does n. concludes 139, 5, explicitly, the case implicitly the outcome of either trol, Ante, at before us.” 510.

Russell cannot be dismissed. Our easily in so that holding ease was based not on the text of §409, but also on “the statutory duties of provisions defining fiduciary, [on] of a provisions defining rights 473 beneficiary.” atS., §409 U. 140. The language in our weighed heavily but it was analysis, fair ultimately “[a] contextual reading the statute,” id., 142, led to our conclusion that “Con- did not intend that section to gress authorize relief ex- Id., for the itself.” at 144. cept is majority simply when it states that “the wrong Court found language Russell Ante, in §409. limiting” appears only 509. in Russell relied on the our Since holding language structure of whole, ERISA as a and not on the text of solely §§409 and 502(a)(2), the Court cannot dismiss Russell on the that Russell no into the ground provides insight provisions at issue in this case. in Russell forecloses the of our

Much reasoning possibility 502(a)(3). of individual relief even under instance, For Russell §409 in afford relief on behalf interpreting solely of the it found that “the relevant fidu- plan, significant characterized at the outset 409 one ciary relationship [of is] ” ‘with to a S., 473 U. at 140. It must respect also be plan.’ then, that the same or similar significant, Congress employed time it referred to a оr a language virtually every fiduciary e.g., See, in ERISA. §§3(21)(A), 404, fiduciary obligation 405, 406, 409, 411, §§ 29 1002(21)(A), 1104, U. S. C. 1105, 1106, 1109, 404, 1111. Section very provision respond- ents seek to enforce in this case, the manner governs respect his duties with which “a . . . fiduciary discharge^] plan.” §404(a)(1) added). And the definition (emphasis of a under ERISA also the focus on the fiduciary places respect plan.” to a of a responsibilities “fiduciary 3(21)(A) added). In of the “basic canon of (emphasis light construction that identical statutory terms within an Act Estate Cowart v. Nicklos Drill- bear the same meaning,” ing Co., (citation (1992) U. S. omitted), we should “fiduciary Congress’ repeated references to a accord with re- plan” significance spect to a the same we attributed to it in namely, fiduciary Russell, that it reveals that ERISA’s obli- regulate relationship gations designed to between were fiduciary plan, relationship between and the and not the fiduciary participants. individual relationship emphasis on the between Furthermore, “the entity” we found to be an and the S., at 409, Russell, the face of U. “apparent” on This provisions in ERISA. pervades all §409 ulti- under relief available expected, since the to be § obligations fiduciary that 409 and mately duties the reflects with consistent recognized that, Russell in We enforces. imposed statutory principal duties wording “the §409, of the management, proper adminis- the relate to the trustees on of maintenance assets, the of fund tration, and investment information, specified and of proper records, the disclosure Id., at 142-143. of interest.” of conflicts the avoidance requires to dis- fiduciaries Though is that ERISA it true solely plan inter- in the respect to a with charge their “duties for the exclu- and ... participants and beneficiaries est of the participants and their providing to benefits purpose of sive 404(a)(l)(A)(i), equally that the true beneficiaries,” it primarily apply with deal which these сommands duties to partici- plan plan, not individual obligations relate that to specifically we cited pants. of the two statutes fact, In one Congress primarily con- was in as evidence Russell provision plan 404, was with the misuse of assets cerned respondents S., case. See 473 U. seek to enforce in this Congress principally con- 142-143, and n. 10.3 That was at Russell that the Act’s like its legislative history, We also observed in fiduciary’s liability statutory “emphasize[s] personal provisions, 140, S., in We plan.” losses to the original). n. 8 (emphasis 473 U. at of congressional that “the crucible legislative history from the gleaned plan administra- of assets mismanagement was misuse and concern in the future.” prevent was these abuses designed tors and that ERISA Id., 141, n. 8. integrity plan,” id., “the cerned with financial of only throughout n. but §409, is thus reflected provisions 409 enforces.4 though majority irrelevant, finds to be Thus, Russell analyzed dispositive. it but We that case all of the is all today through provisions holds be enforceable the Court 502(a)(3). provisions part our these We considered §409 reading” when read §409, “contextual surrounding provisions it conjunction did become with these primarily [§409’s] “abundantly draftsmen were clear that possible assets, and with misuse of with concerned plan, protect rather than the entire remedies that would beneficiary.” supra, at Russell, rights an individual Congress pro- say did not intend to This is not 142. surely participants breach; it did. from tect by creating protect individuals however, to chose, authorizing remedy single rather than on behalf piecemeal for individual relief. suits Congress’ apparent allow suit for breach intent to

Given 502(a)(2), §§409 exclusively fiduciary duty Congress’ given intent authorize evidence of abundant plan, I that individual behalf the would hold relief on of 502(a)(3). § fiduciary is under for breach unavailable relief 4 §1132(() (1988 ed., §502(1), Supp. U. of 29 S. C. majority’s citation 502(a)(3) § I), unpersuasive. Section of support interpretation of 502(1) 1989, after ERISA more than decade by Congress was enacted ERISA, in interpreting that initially recognized We have was enacted. “ form hazard statutes, subsequent Congress of a all ‘the views as with Tire & earlier one.’” Firestone inferring for intent of an ous the basis (1989) Bruch, United States v. 101, 114 Rubber Co. (quoting v. U. S. 489 (I960)). Mackey Lanier Collection v. Price, 304, also U. 361 S. 313 (1988). Inc., event, Service, any 825, S. In Agency & 486 U. 839-840 (in 1989) 502(1) § that Congress’ understanding that indicates extent 502(1) breach, § confirms fiduciary available for might individual relief be 502(a)(3) § That is affords such relief. did not believe that Congress that 502(a)(2) §§ and Congress’ citation of reasonable inference from most 502(a)(3) (a)(5) and, reference to statutes notably, purport not of —in — paid plan participants to be and beneficiaries. edly authorizing amounts

526

II assuming recovery that Even ERISA authorizes for fiduciary duty by plan participants, breach of individual I majority agree cannot with the committed fiduciary duty cognizable under ERISA. Section breach 3(21)(A) explicitly of the defines the extent to which a Act fiduciary person be under ERISA. See 29 will considered 1002(21)(A). statutory language, place In C. U. S. determining majority for fidu- its own standard creates ciary I constrained, am, But follow com- status. Varity’s conduct is not I statute, conclude mand of fiduciary under the Act.5 as a breach actionable

A permitted to both as employer is act ERISA, an Under 408(c)(3), 29 U. C. sponsor plan S. administrator. plan (1988ed.). 1108(c)(3) Employers to administer who choose company responsibilities to plans both own assume their loyalty accordingly, and care duties of plan, and, owe arrangements, which permitting such entities. In to both po- to the inherent ordinary generally forbids due law trust that the understood interest,6 conflict of tential for 5 imposes ERISA 524, the duties that supra, principal As explained assets, the maintenance management involve on fiduciaries information, conflicts of and avoidance of records, specified disclosure Russell, U. Ins. Co. v. S. Mut. See Massachusetts interest. Life “[fjiduciary (1985). status recognized have Accordingly, we 142-143 John management ‘plan assets.’” attends generally Bank, Trust Sav. U. S. Harris v. Mut. Ins. Co. Hancock Life (1993). partici However, Court holds that individual since I here duty, proceed breach of entitled recover are pants can to some extent predicated status be assumption that on-the participants. individual interactions with on (“To (1981) Co., 453 Coal S. deter See NLRB v. Amax U. 329-330 the any injury to prevent possible from all and to temptation the trustee his must be en dividing loyalties the a trustee beneficiary, rule against ‘that, A cannot contend ‘uncompromising rigidity.’ forced with if interests of be sacrificed an were might employer plan Hence, choose forced to between company plan. on a care that administrators of duty Congress imposed to a them to duties with “discharge respect [their] requires in the interest of the and beneficiar- solely participants 404(a)(1). understood, however, also ies.” Congress an decision makes can business every virtually employer that an have an adverse on impact plan, employer a if busi- be able to run would not profitably every company be made in best interests of ness had to decision participants. §3(21)(A) ERISA, in of term

In “fiduciary” defining it believed would struck a balance that protect plan Congress on without ability employers impinging participants allows that ERISA decisions. In recognition make business common law of arrangements trustee-beneficiary forbids, ‘fiduciary’ “define[d] trusts generally terms of but in formal trusteeship, terms functional Mertens, S.,U. over the and authority plan.” control ERISA, under a Accordingly, at 262 original). (emphasis “to the with “is a fiduciary respect plan” person or discre- that “he has any discretionary authority extent” administration such plan.” tionary resрonsibility ed.).7 1002(2l)(A)(iii) (1988 This 3(21)(A)(iii), C. 29 U. S. interests, well equally masters he served his conflicting he had although secondary pull his was not weakened primary loyalty or that his omitted). ”) (citations Law of Trusts Bogert Bogert, G. & G. also one’ 1993). (rev. §§ 2d ed. and Trustees “to “fiduciary respect plan” with A is also a person (i) discretionary discretionary authority or any he exercises the extent authority exercises of such or respecting management control (ii) assets, of its disposition [or] or management or respecting control direct or compensation, a fee or other he investment advice for renders plan, indirect, any moneys property or other of such respect §3(21)(A), 29 U. S. C. to do so.” responsibility any authority or has 1002(21)(A). case, Varity’s status agree In the parties which category, the statute’s third interpretation turns on an 528 ‘fiduciary,’” supra, Mertens, at 255, definition of

“artificial employer designed, part, so that an that adminis- is in 5,n. purposes fiduciary to the for all is not a ters its own only it extent that has discretion- times, at all but employer authority plan. ary is to administer When acting plan administrator, it is not a under not as §404 fiduciary duty in of care codified is Act, and not activated.

Though recognized borrowed from have we enacting ERISA, Firestone law trusts in the common (1989), 101, Bruch, 489 U. 111 & Rubber Co. v. S. Tire “ ‘every forget statute, case that ERISA is must ” “ ‍‌‌​​‌​‌​‌​‌‌​‌​​​​‌​​​‌​​​​​​​‌‌‌​​‌‌​​‌‌​​​​‌​​‍point... ‘starting involving statute,’ construction language v. 425 Ernst & Ernst is the itself.’” Hochfelder, (1976)(citation omitted); see Central Bank 197 U. S. A., Denver, N. Denver, Bank 511 N. A. v. First Interstate (1994). particularly be careful to We should U. S. explained, statutory case, since, text abide statutory fiduciary departs from the definition of ERISA’s respect. majority, important how- in an common law point” determining “starting fidu- ever, tells us ciary law under ERISA is common of trusts. status majority, only According to the it is “after” Ante, 497. may “go they on” to con- the commonlaw that courts assess statutory statutory and even then the definition, sider inquiry whether, extеnt, the “to ask or to what lan- require purposes guage statute, structure, or its requirements.” departing trust from common-law Ibid. construction, statutory approach one This is a novel approach on its head. stands our traditional employer an acts as a To determine whether 3(21)(A)(iii). begin ERISA, I with the text of To “manage supervise “administer” a is to the execution 31; Brief relates administration. See for Petitioner Brief for for United States as Amicus Curiae 25. See Brief Respondents 33. also plan. Webster’s Ninth New Colle- of” the . . . or conduct (1991). Dictionary also Webster’s New Inter- giate 1957)(same). (2d Essentially, Dictionary ed. national provisions implement and to plan is administer question in imposed by plan the Act. carry duties out discretionary carrying Varity out whether was this case implementation management of or responsibilities over misrepre- argued respondents it “made below, plan, as when, pros- plaintiffs about MCC’sbusiness to the class sentations employment anticipated effect of pects about Plaintiffs- Brief for plaintiffs’ benefits.” on transfers (CA8), represen- Although p. 27. Appellees in 93-2056 No. plan participants’ assess- may affect well of this sort tations disagree benefits, with the security I of their ment of qualify “plan as adminis- majority communications that such the Act. under tration” employer that ad running business, an a of

In the course plan business will make countless its own benefits ministers made clear plan. that affect decisions require that §3(21)(A), not does that “'ERISA however, may have which transactions, corporate business “day-to-day contingent employee bene prospective, effect on collateral a partici plan solely in the interest performed fits, be Inc., 2d Industries, 905 F. Avondale pants.”’” Adams v. (citation omitted), (CA6) denied, 498 U. S. 984 cert. 943, 947 (1990). such as whether ordinary decisions, business Thus, may without fear be made debt, pay or to incur a dividend fiduciary duty ERISA, even liability for breach consequences negative may they to have though turn out directly af decisions business participants. Even the decision participants, such as plan and fect governed are not benefits, modify welfare terminate or they involve obligations do not because ERISA’s plan. Curtiss- discretionary administration (1995)(par- Schoonejongen, 73, 78 514 U. S. Wright Corp. v. enthetically quoting supra, proposi- Adams, for the company capacity tion that “‘a does act deciding or terminate a welfare benefits when to amend discretionary interpretation plan’”). contrast, the of a In discretionary that the plan term, or the determination type procedure, likely would not authorize certain does fiduciary. is no qualify There as administration implement however, that failed to case, in this claim actually respondents plan according terms, to its since they entitled under to which were all of the benefits received plan, found. the courts below representations in employer also make countless An will and ex managing about the current a business the course of Similarly, corporation.8 an pected financial condition directly may representations that either employer make increase, decrease, main impliedly or evince an intention termi employee Like the decision to welfare benefits. tain or modify benefits, make, the decision to welfare nate or employer’s representations in the “cor is made make, such sponsor nonfiduciary capacity plan or porate settlor,” as (CA5 1994), Corp., 1323,n. 3d 28 v. 36 F. Borst Chevron (1995), and ERISA’s denied, cert. 514 U. S. 1066 simply are not apply. communications rules do not Such implementing plan executing the its made in the course necessary they of conduct Rather, are the incidents terms. employers ing business, a determined that and 8 typical made in this case are kind The statements the financial assessing expected often makes management statements (“I believe that with the continued company. App. health of the 80 Massey Corporation make Combines help and we can support you for”); which all want to work kind of business enterprise successful ibid. persists which in the North American (“[D]espite depression Massey Corpora I am excited future of Combines economy, about tion”); id., at (“We a very company, are all that our new has optimistic 82 us”). future, new all of bright by challenges facing and are excited

531 would not be burdened with to the fiduciary obligations 3(21)(A)(iii).9 § when in such conduct. See engaging To be does a sure, set of impose “comprehensive and disclosure’ which is of “an ‘reporting requirements,” part elaborate scheme beneficiaries to their ... learn enabling time.” obligations Curtiss-Wright rights Corp. §§ 83; 101-111, v. see 29 U. S. C. Schoonejongen, supra, §§ But no of ERISA an em- 1021-1031.10 provision requires abreast of the plan sponsor’s ployer keep plan participants types ERISA’s to these of communica Applying obligations decisionmaking way a never intended corporate tions will distort observes, instance, an employer contemplat For Congress. petitioner or the of a division “would be competitor downsizing ing purchase ERISA, to liability fully [to in order to avoid describe its required, ‘security’ such affect the plans might to do so because employees] plans if Brief for Petitioner n. 20. Even of welfare benefits.” Reply to cover the nondisclosure of information Court’s is not extended holding benefits, by an into simple inquiry employee employee affect might on benefits would be suffi a business decision effect of possible fiduciary obligations conducting employer cient to saddle the transaction. business proposed established tо a writ instance, pursuant benefits must be For 1102(a)(1). § 402(a)(1), § Plan administrators 29 U. S. C. ten instrument. 101(a), summary plan description, participants must also furnish to 1021(a), in a manner calculated to be “shall be written U. S. C. which sufficiently and shall be average plan participant, understood reasonably apprise participants such comprehensive accurate and 102(a)(1), obligations plan.” under the rights beneficiaries of their 1022(a)(1). describe, summary description must S. C. U. par for requirements governing eligibility the things, plan’s other among for claims for procedures presenting benefits as well as the and ticipation 1022(b). 102(b), § Material modifications must be 29 U. S. C. benefits. to be under in a manner calculated and must also be “written disclosed 102(a)(1). Plan administrators by average plan participant.” stood the in annual re financial information specified are also to disclose required to participants of Labor and made available Secretary filed with the ports 1024(b). 1023(b), §§ 103(b), 104(b), §§ 29 U. S. C. request. upon must be made. which such disclosures also dictates the times at 104(b)(1). financial or of the future intentions with sponsor’s security to or the level of terminating benefits.11 regard reducing And the extent to ERISA does disclosure obli- impose the Act for civil and gations, already provides liability pen- alties for disclosure violations from ERISA’s wholly apart 502(a)(1)(A), §§ duties. See provisions governing fiduciary 502(c). not be a informational “[t]his Though may foolproof Curtiss-Wright Corp., it is scheme, thorough.” ... quite supra, .decision to include the at 84. Congress’ types in this case within the Act’s exten- at issue representations is that Con- evidence sive disclosure requirements strong to as such statements did not consider qualify “plan gress administration.”12 sponsors generally or are free contrary, plan To other “[e]mployers time, ERISA, or terminate any any adopt, modify, for reason at to

under 73, 78 514 U. S. Curtiss-Wright Corp. Schoonejongen, v. plans.” welfare (1995). Tеrm, any sub “ERISA does not create clear last As made or other any health benefits employer-provided stantive entitlement benefits,” participation, it minimum nor does “establish kind of welfare for welfare it does plans pension for as funding requirements or vesting, Ibid. plans.” well- the company’s of information about Nor is the communication con plan on benefits effect of a business transaction being possible at issue plan the Massey-Perguson administration plan sidered address, fails to majority of which the the terms plan, this case. The adminis plan either or authorize require only provisions two contains first is plan participants. The information to trators to communicate make all administrator §8.1.3, requires it and contained administra (requiring plan App. ERISA. See required disclosures agencies governmental reports appropriate with the required to file tor Plan provisions for disclosure of of law requirements “comply and other inter and Employees to the Plan to relating information and other second, Employees,” “Communication to entitled The parties”). ested “[i]n company, That section plan. requires in 10 contained Act, princi communicate [to] requirements with the accordance inspec to “make available Employees” Plan terms of the pal at the beneficiaries, hours reasonable during their tion, Employees be re places may as at such other Company office of the principal Plan, and of such Act, Agreement, the Trust copy by the quired Id., at 21. by the Act.” may required be other documents administrator delegates to expressly responsibility other representations employer’s Because an about the com- pany’s possible prospects impact financial or about the of ordinary security business transactions the on of unvested implementation welfare benefits do not involve execution or imposed by plan Act, the or of duties these because types representations employers regularly are the make ordinary running business, in the course I would not plan such involve hold that communications administration. magically cannot trans- The untruthfulness of a statement representation fiduciary nonfiduciary into it from form factor but the determinative is truthfulness one; the capacity in statement is made. which the

B statutory text, only passing to the relevant reference With Congress imposed on limits that majority discards replaces with a far broader stand- fiduciary them status and ante, at of trusts. See plucked the common law from ard our decision in Central Relying treatises and on trust 502. Fund v. Cen- Areas Pension States, & Southwest Southeast (1985), majority con- Transport, Inc., S. 559 472 U. tral plan when- person engages in administration that a cludes “ necessary appropriate 'powers as are he exercises ever Ante, purposes’ of the trust.” carrying out of plan’s procedure, to the claims pursuant claims the administration is (section id., at 18-20 plan. generally in 11 of the is described which Among Named Fiduciar- Responsibilities “Allocation entitled plan by the ies," fiduciary obligations imposed enumerates all which plan). limited to necessarily is administration plan I do not claim that Though ante, documents, 504, the see by imposed of duties performance man ERISA’s argument to this straw majority’s response —that im- if of duties performance meaningless would be obligations flawed. nonetheless administration —is plan qualified posed assumption that a based on the mistaken argument majority’s (the exercise authority administrators discretionary assign cannot Act), an duties under the subject be clearly would of which law of and by common trusts both flatly contradicted assumption 6, §552. Bogert, supra & n. See Bogert sense. common 534 3 Fratcher, 186, §

502 A. Scott & Law of Trusts W. (quoting (4th 1988)).13 ed. p.

The is flawed in at least two approach majority’s respects. it First, the standard that borrows from the common of law not trusts is the common-law standard for determining Rather, is whether a a it is the standard person fiduciary. common law uses to define the a au- the fiduciary’s scope Thus, it is settled that a is a once thority person fiduciary. takes a common-law standard that the Court inexplicably a it to that a is deter- presumes person fiduciary applies whether, statute, is a mine under the person fiduciary the first The patent the majority’s approach ignores place. under the definition a differences between fiduciary the and in the law, the common process ERISA and expands standards beyond that are by fiduciary activities governed text.14 the statutory those designated 404(a) § determine Also, attempting twice looks to majority the ante, Spe at 511. ERISA. See status under scope fiduciary the 404(a)(1)(D), fiduciary § a requires which on cifically, majority relies instruments documents and “in with the duties accordance discharge his 404(a)(1)(D) whether a § not determine does plan.” But governing §404, it provisions Like the other fiduciary. a acting as person a performed by person rule for functions ground a merely establishes §3(21)(A). rely on majority The cannot fiduciary a under to be deemed status, 404(a)(1)(D) fiduciary a has assumed person whether to determine a person it has been established only after applies that provision since fiduciary. is a States, Southwest Southeast & on Central reliance majority’s The (1985) (cited Inc., 472 U. S. 559 Transport, v. Central Pension Fund Areas Although ante, majority’s approach. in the 502), the flaw illustrates majority treatise that from Scott passage the same quoted there States, supra, see Central 3(21)(A), for the text substitutes here, case, we are in that to determine attempting was Court a under plan fiduciary respect as a acting was a person whether in Central States was 3(21)(A). the trustee no question There was that the audit 3(21)(A), question no and there was only question function. was a to perform trustees wished trustees, admittedly who were plan States was whether in Central majority disregards any possible Second, the distinction respective between the roles of an ERISA trustee and an plan might against administrator that counsel importation, statutory wholesale into definition of governing administration, of common-law rules trustees. charged ERISA, Under trustee is with “exclusive authority manage and discretion to and control the assets of §1103. plan.” §403, 29 U. S. C. Because the trustee’s authority over assets is exclusive, administrator pre-eminent responsibility under ERISA lacks the of the namely, management trustee, common-law the of the trust may corpus. Thus, while it be true the under common law powers necessary that a trustee has such as are to further purposes automatically of the it does not follow trust, the (who plan that the administrator of a benefits definition assets) possesses authority authority plan over all lacks carrying purposes “necessary appropriate” out the or authority majority plan. for its as- And cites no the plan sumption is the functional that an ERISA administrator equivalent ante, 502, 505, trustee. at of a common-law See 506. ques- majority’s analysis in is an exercise bottom, the

At company’s begging. speculating financial If about tion security plan not involve dis- stability benefits does or the wholly irrel- cretionary authority plan administration, it is be providing “would seem” to such information evant that plan purpose.” Ante, “carrying important an out related to ante, benefits,” was “about That a communication at 502. ante, activity “plan-related nature,” a an was of 501, or significance the act involved unless of little 503, is also 3(21)(A)(iii) purpose is to The whole administration. concededly fidu- this fiduciaries, perform were authorized Central therein, cited principle Like the common-law ciary function. a person that a is once it is settled States dicta becomes relevant fiduciary. engages even in benefit-related clear that one who

make fiduciary only “to the extent” he plan-related is a conduct authority plan. discretionary to administer has v. Harris Trust and Sav. Ins. Co. Hancock Mut. John Life (1993)(Congress phrase uses 86, 104-105 Bank, 510 S.U. “to extent” actions clear that some extent”- to make “to the category general a were included in otherwise be that would excluded). majority’s run around The end to be meant principles inapplicable by reference to important limitation unpersuasive. is law of trusts from the common statutory largely text majority that confirms by indulging the approach notion irrelevant employers’ understanding subjective participant’s employer’s determining whether an relevant in conduct is qualify “plan under ERISA. The administration” actions Varity engaged adminis- majority was concludes that employees ground “reasonable ... part on tration administering plan. thought” was could have person not make Ante, at ERISA does 503. employees him be a fidu- believe extent reasonable discretionary au-

ciary, “he has rather to the extent but thority discretionary responsibility the in administration or 3(21)(A)(iii). ERISA, act plan.” an either Under of such administration, not; it the em- plan or does whether involves employer acting subjective is ployees that the belief have subjec- turning A on the rule as a cannot matter. simply participants perceptions is inconsistent tive upon structure, which is built not with fundamental ERISA’s the face of written perceptions, reliance on but “around Curtiss-Wright Corp., S., 514 at 83.15 U. documents.” 15 imagine involving to a situation “It is difficult petitioner As observed: as to future business decisions any communication ‘context’ ‘reаsonably’ that could not be benefit choices participant’s affect might administrator, when especially as an act of a employees viewed Brief for Petitioner directly Reply ask about such intentions.” employees (emphasis original). 18

c conclusion that a was Finally, majority’s fiduciary duty an inaccurate assessment breached is based of the rec- upon It true that ord this case. Varity expressed falsely op- new timistic forecasts about its venture’s for suc- prospects in an effort to entice to transfer to the new cess employees believe, But the I tells majority, part company. “the basic to the when it states that message conveyed

story from was that Massey-Ferguson transferring employees undermine se- would not Combines significantly Massey Ante, at 501. As I read the rec- of their benefits.” curity was that ord, security Varity conveyed message the success would be and benefits contingent upon jobs informed its employ- new Varity repeatedly company. future will in the conditions depend ees “[ejmployment a suc- Combines our to make Massey Corporation on ability or are considered necessary appropriate, cess and changes if added).16 The ma- made.” will be (emphasis they App. documents fails to note expressly also jority Terminate, With- Suspend, “[t]o reserved right Id., in Part.” Plan in Whole or Amend or draw, Modify message employees) (transcript videotape App. See also (“When Massey Corpora Combines you your employment transfer tion, unchanged.... Employ will remain programs levels and benefit pay Massey on the success depend in the future will ment conditions or nec appropriate be deemed changes and should Corporation Combines (“When (cover made”); id., to employees) at 82 letter they will be essary, levels Corporation, pay Combines Massey you accept employment Employment . .. conditions unchanged. will remain programs and benefit Corpo Combines Massey to make ability future will on our depend in the success, necessary appropriate, if are considered changes ration a made”). they will be that the combines finding in of the District Court’s light When read years the four [for in a decline industry “unprecedented had been state part by in an extreme significant creation of caused prior MCC]... to the to Pet. for Cert. economy,” App. in country’s agricultural this depression 53a, greater significance. take on even company’s qualifications employer today an thus holds that 43. Court fiduciary obligation participants in an ERISA

breaches a optimistic about com- plan statements it makes when thereby implies that unvested pany’s financial condition employer though even secure, will be welfare benefits participants changes will simultaneously that informs require docu- if economicconditions so be made employer to the un- expressly terminate authorize ments agree I time. cannot benefits vested welfare result.

Ill fiduciary opinion to liabil- extend I do not read Court’s logi- ity which the rationale would to all instances in Court’s its cally apply. awkward articulation of Indeed, the Court’s quite ante, holding that this case is limited. See confirms (“We in . factual context which . . that the at 503 conclude plan-related with the made, were combined the statements plan- had activity, engaged who in those nature of the together sup- authority provide so, sufficient to do related legal was port conclusion for the District Court’s (“[W]e making fiduciary”); acting ante, at hold that benefits representations about future intentional administration”) (emphasis is an act of context added). pre- involving facts similar those not limited to cases

If recovery expansion for case, sented in this Court’s broadening to individuals and substantial breach bal- the careful will undermine of the definition enacting Congress Pilot ERISA. See ance struck Life (ERISA’s S., “civil enforce- Dedeaux, at 54 Ins. Co.v. U. balancing represents ‍‌‌​​‌​‌​‌​‌‌​‌​​​​‌​​​‌​​​​​​​‌‌‌​​‌‌​​‌‌​​​​‌​​‍ a careful of the need ment scheme . . . against procedures prompt settlement and fair claims employee encouraging public interest formation Although plans”); Mertens, S., at 262-263. benefit U. employees sought guarantee receive the promised employers, Congress benefits was also welfare providing aware that if the cost of welfare benefits rose too high, employers provide would not them at all. See Russell, (warning against S., 473 U. expanding n. liability beyond by Congress, that intended “lest the cost of federal discourage growth private pension standards plans”) (citation omitted); Hozier v. Midwest Fasteners, Inc., 908 (CA3 1990) (recognizing 2d “Congress’s F. judg- employees ment themselves are best served an en- regime employers’ expected forcement that minimizes liabil- ity reporting and disclosure violations—and with it, the against creating employee disincentives plans benefit place”).17 Application the first holding of the Court’s in the many may logically apply cases in which it could result in significantly liability, very increased height- at the least litigation ened costs, and an eventual reduction in bene- Fortunately, fits import to accommodate those costs. holdings appears the Court’s to be far more modest, and compelled employers courts should not feel to bind to the just strict ordinary standards ERISA because an business impact decision turns out to have an adverse on plan. respectfully

I dissent. 17That is presumably why Congress exempted welfare benefits from the stringent, costly, vesting requirements imposed on pension benefits. See Curtiss-Wright Corp., S., U. at 78. notes the second subsection refers

Case Details

Case Name: Varity Corp. v. Howe

Court Name: Supreme Court of the United States

Date Published: Mar 19, 1996

Citation: 516 U.S. 489

Docket Number: 94-1471

Court Abbreviation: SCOTUS