RESPONDENT:DeWolff, Boberg & Associates, Inc., et al.
DOCKET NO.: 06-856
DECIDED BY: Roberts Court (2006-2009)
LOWER COURT: United States Court of Appeals for the Fourth Circuit
CITATION: 552 US 248 (2008)
GRANTED: Jun 18, 2007
ARGUED: Nov 26, 2007
DECIDED: Feb 20, 2008
Matthew D. Roberts – on behalf of the United States as amicus curiae supporting Petitioner
Peter K. Stris – on behalf of the Petitioner
Thomas P. Gies – on behalf of Respondent
Facts of the case
James LaRue participated in a 401(k) retirement savings plan administered by his employer, the management consulting firm DeWolff, Boberg & Associates. Employee benefit plans are regulated under a federal law, the Employee Retirement Income Security Act of 1974 (ERISA). LaRue sought to exercise his option to make certain changes in his investment plan, but DeWolff neglected to make the changes. LaRue claimed that DeWolff’s omission had cost him $150,000, and he sued the firm for breach of fiduciary duty, seeking to recover the money. In response, DeWolff argued that ERISA does not provide for the type of individual monetary award sought by LaRue.
Section 502(a)(2) allows plan participants to sue plan administrators for breach of fiduciary duty in order to “make good to such plan any losses to the plan resulting from each such breach.” DeWolff argued that LaRue’s suit was not of the type contemplated by the text of ERISA because LaRue sued to recover losses caused to his own personal retirement plan rather than suing to vindicate the interests of the plan as a whole. LaRue also invoked Section 502(a)(3), which allows plan participants to sue to obtain “other appropriate equitable relief.”
The U.S. District Court held that LaRue was not entitled to relief under ERISA, and the U.S. Court of Appeals for the Fourth Circuit affirmed. The Fourth Circuit ruled that Section 502(a)(2) was concerned with protecting entire plans from misuse of plan assets and not with providing recovery for losses suffered by individual accounts. The court also rejected LaRue’s Section 502(a)(3) claim. It ruled that the phrase “equitable relief” rarely includes relief in the form of a monetary award and only when the money has been unjustly possessed by the defendant.
Does Section 502(a)(2) of the Employee Retirement Income Security Act of 1974 allow an employee pension plan participant to sue the plan manager for losses caused by breach of fiduciary duties in administering the plan, even when the losses affected only the participant’s personal account?
Does a suit brought by a plan participant against the plan manager for breach of fiduciary duty qualify as a suit for “equitable relief” for the purposes of Section 502(a)(3) of ERISA?
Media for LaRue v. DeWolff, Boberg & Associates, Inc.
Audio Transcription for Opinion Announcement – February 20, 2008 in LaRue v. DeWolff, Boberg & Associates, Inc.
John Paul Stevens:
In the first of the two cases, LaRue against the DeWolff Associates, the case comes to us from the United States Court of Appeals for the Fourth Circuit.
The petitioner filed the action against his former employer in the defined contribution punishment — pension plan that it administers.
The plan permits participants such as LaRue to direct the investment of their contributions in accordance with specified procedures and requirements.
He alleges that the plan administrator failed to follow his investment directions and that that failure resulted in the depletion of the value of his interest in the plan by approximately $150,000 and that that failure was a – a breach of duty under the terms of the Employment Retirement Income Security Act, ERISA.
The District Court granted the respondent’s motion for a judgment on the pleadings and the Court of the Appeals affirmed.
Relying on our opinion in the — the Russel case, the Court of Appeals held that ERISA, Section 502(a)(2) provides remedies only for entire plans and not for specific individuals.
We granted certiorari and now vacate and remand for further proceedings.
For reasons stated in our opinion, we hold that although 502(a)(2) does not provide a remedy for individual injuries distinct from plain injuries, the provision does authorize recovery for – for fiduciary breaches that impair the value of plan assets in a participant’s individual account.
The Chief Justice has filed an opinion concurring in the judgment that Justice Kennedy has joined.
Justice Thomas has filed an opinion concurring in the judgment that Justice Scalia has joined.