|
|
|
|
|
|
|
|
| Latest Cases Advanced Search Law Firm Directory Arbitrator Directory Law School Directory Legal Resources / Blogs |
|
United States Supreme Court Employment Law Cases All pending employment law cases - click here |
LaRue v. DeWolff, Boberg & Associates,
Inc. (06-856)
ERISA; Participant's action for loss caused by breach of fiduciary
duty
Decided February 20, 2008
[ Click
here for full text of Supreme Court opinion ]
|
Held: ERISA permits a participant to bring an action to recover losses attributable to
his account in a “defined contribution plan” that were caused by fiduciary
breach.
Official Syllabus:
Petitioner, a participant in a defined contribution pension plan, alleged that
the plan administrator's failure to follow petitioner's investment directions
"depleted" his interest in the plan by approximately $150,000 and
amounted to a breach of fiduciary duty under the Employee Retirement Income
Security Act of 1974 (ERISA). The District Court granted respondents judgment on
the pleadings, and the Fourth Circuit affirmed. Relying on Massachusetts Mutual
Life Ins. Co. v. Russell, 473 U. S. 134 , the Circuit held that ERISA §502(a)(2)
provides remedies only for entire plans, not for individuals.
Held: Although §502(a)(2) does not provide a remedy for
individual injuries distinct from plan injuries, it does authorize recovery for
fiduciary breaches that impair the value of plan assets in a participant's
individual account. Section 502(a)(2) provides for suits to enforce the
liability-creating provisions of §409, concerning breaches of fiduciary duties
that harm plans. The principal statutory duties imposed by §409 relate to the
proper management, administration, and investment of plan assets, with an eye
toward ensuring that the benefits authorized by the plan are ultimately paid to
plan participants. The misconduct that petitioner alleges falls squarely within
that category, unlike the misconduct in Russell. There, the plaintiff received
all of the benefits to which she was contractually entitled, but sought
consequential damages arising from a delay in the processing of her claim.
Russell's emphasis on protecting the "entire plan" reflects the fact
that the disability plan in Russell, as well as the typical pension plan at that
time, promised participants a fixed benefit. Misconduct by such a plan's
administrators will not affect an individual's entitlement to a defined benefit
unless it creates or enhances the risk of default by the entire plan. For
defined contribution plans, however, fiduciary misconduct need not threaten the
entire plan's solvency to reduce benefits below the amount that participants
would otherwise receive. Whether a fiduciary breach diminishes plan assets
payable to all participants or only to particular individuals, it creates the
kind of harms that concerned §409's draftsmen. Thus, Russell's "entire
plan" references, which accurately reflect §409's operation in the defined
benefit context, are beside the point in the defined contribution context. 450 F. 3d 570, vacated and remanded. STEVENS,
J., delivered the opinion of the Court, in which SOUTER, GINSBURG, BREYER, and
ALITO, JJ., joined. ROBERTS, C. J., filed an opinion concurring in part and
concurring in the judgment, in which KENNEDY, J., joined. THOMAS, J., filed an
opinion concurring in the judgment, in which SCALIA, J., joined.
Case below:
LaRue
v. DeWolff, Boberg & Associates, Inc. (4th Cir 06/19/2006); rehearing
denied, with opinion discussing the views of the Secretary of Labor (4th Cir
08/08/2006)
Official docket sheet
Question presented:
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”)? Certiorari Documents:
Briefs on the merits:
Counsel:
|
EEOC | NLRB | Supreme Court | Employment Law Blog | Arbitration Blog | Employment Law 101
