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Supreme Court takes ERISA fiduciary case
June 18, 2007 by Ross Runkel at LawMemo
LaRue v. DeWolff, Boberg & Associates. The US Supreme Court granted certiorari June 18, 2007. [Briefs and details]
LaRue was a participant in a 401(k) plan administered by DeWolff. LaRue's suit claimed that DeWolff breached its fiduciary duty by failing to implement his investment strategy, and sought recovery of the amount by which his account would have appreciated had DeWolff followed his instructions.
The 4th Circuit upheld judgment on the pleadings in favor of DeWolff, holding that (a) ERISA Section 502(a)(2) provides remedies only for entire plans and not for individuals, and (b) ERISA Section 502(a)(3) does not apply because LaRue was not seeking "equitable relief." The US Supreme Court granted certiorari to review the 4th Circuit judgment, and will schedule oral arguments for the Fall of 2007.
The "Questions Presented" by the certiorari petition:
1. Section 502(a)(2) of the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. 1132(a)(2), provides that a "civil action may be brought * * * by a participant * * * for appropriate relief under section 1109 of this title." 29 U.S.C. 1109 states that "a fiduciary with respect to a plan who breaches any * * * duties imposed upon fiduciaries * * * shall be personally liable to make good to such plan any losses to the plan resulting from each such breach."The First Question Presented is:
Does § 502(a)(2) of ERISA permit a participant to bring an action to recover losses attributable to his account in a "defined contribution plan" that were caused by fiduciary breach?
2. Section 502(a)(3) of ERISA, 29 U.S.C. 1132(a)(3), provides that a "civil action may be brought * * * by a participant * * * to obtain other appropriate equitable relief * * * to redress * * * violations" of the statute.
The Second Question Presented is:
Does § 502(a)(3) permit a participant to bring an action for monetary "make-whole" relief to compensate for losses directly caused by fiduciary breach (known in pre-merger courts of equity as "surcharge")?
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