Massachusetts Mutual Life Insurance Company v. Russell

PETITIONER: Massachusetts Mutual Life Insurance Company
RESPONDENT: Russell
LOCATION: New Mexico State Police Headquarters

DOCKET NO.: 84-9
DECIDED BY: Burger Court (1981-1986)
LOWER COURT: United States Court of Appeals for the Ninth Circuit

CITATION: 473 US 134 (1985)
ARGUED: Jan 16, 1985
REARGUED: Apr 24, 1985
DECIDED: Jun 27, 1985

ADVOCATES:
Brad N. Baker - on behalf of Respondent
John E. Nolan, Jr. - on behalf of Petitioners

Facts of the case

Question

Media for Massachusetts Mutual Life Insurance Company v. Russell

Audio Transcription for Oral Argument - January 16, 1985 in Massachusetts Mutual Life Insurance Company v. Russell

Warren E. Burger:

We will hear arguments next in Allis-Chalmers Corporation v. Lueck.

We will hear arguments next in Massachusettse Mutual Life v. Russell.

Mr. Nolan, you may proceed whenever you are ready.

John E. Nolan, Jr.:

Mr. Chief Justice, and may it please the Court:

This case arises under an important federal statute, ERISA, and it is safe to say that if the statute was working the way Congress intended that it should, the case would not be here today at all.

The Respondent Russell received all of the benefits to which he was entitled under the plan, under the statute, all of the benefits that she had claimed in March of 1980, just short of five years ago.

Shortly after that, this suit was filed.

It was filed in state court.

It was removed to the Federal District Court in California where the Court granted summary judgment for Petitioners, ruling that punitive damages and extracontractual compensatory damages in this case including damages for pain and suffering and emotional distress, were not available under ERISA.

The Ninth Circuit reversed, holding that they were, and this Court granted certiorari.

First, with regard to punitive damages, that issue is squarely presented by this case, whether or not they are available under ERISA.

We contend that they are not, essentially for two reasons, that that is not what Congress said, and quite plainly, after review of the legislative history, that is not what Congress intended, and secondly, that if punitive damages were available, they would interfere with the proper functioning of the employee benefit system in the federal courts.

ERISA is a long, complex, comprehensive statute, but the provisions directly involved in this case are only two, and they are relatively simple.

Section 502 provides that a civil action is available to the Secretary of Labor and to participants, beneficiaries and fiduciaries for relief under Section 409.

Section 409, which deals with fiduciary breach, provides that fiduciaries who breach their duty will be personally liable to the plan to make good the losses that their breach occasioned or to restore to the plan--

William J. Brennan, Jr.:

Are you suggestion, Mr. Nolan, that under 409 the duties imposed run only for the plan, not for beneficiaries?

John E. Nolan, Jr.:

--I am suggesting that, yes, Justice Brennan.

Section 409 deals with fiduciary responsibility, and it talks about personal liability of fiduciaries, but it is our position that recovery under 409 is limited to the plan as distinguished from the individuals.

William J. Brennan, Jr.:

Now, it talks about duties imposed upon fiduciaries by this subchapter.

What are they?

John E. Nolan, Jr.:

Some of them are defined explicitly, Justice Brennan, and others are to be inferred from the law of trusts to which Congress committed the entire statute of ERISA for its administration.

409, in addition to requiring that fiduciaries make good to the plan any loss occasioned by the breach, it requires that fiduciaries restore to the plan any gains that they have made from the use of plan assets.

William J. Brennan, Jr.:

Well, didn't trust law generally provide for recognizing that a beneficiary should be made whole?

You just suggested, I think, that Congress delegated to the law of trusts much of what ERISA was intended to accomplish.

John E. Nolan, Jr.:

That's correct, Your Honor.

William J. Brennan, Jr.:

The beneficiaries under the old law were always entitled to be made whole.

John E. Nolan, Jr.:

Well, I think in the context of ERISA, Justice Brennan, to be made whole means to get the benefits to which they are entitled under the statute.

William J. Brennan, Jr.:

And that's all.

John E. Nolan, Jr.:

And that's all.

And that--