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Georgia State University Law ReviewVolume 26Issue 3 Spring 2010 Article 1

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ERISA's Remedial Irony: Narrow InterpretationPaves the Way for Jury Trials in Suits for Breach ofFiduciary Duty Under ERISAKris Alderman

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Recommended CitationKris Alderman, ERISA's Remedial Irony: Narrow Interpretation Paves the Way for Jury Trials in Suits for Breach of Fiduciary Duty UnderERISA, 26 Ga. St. U. L. Rev. (2012).Available at: https://readingroom.law.gsu.edu/gsulr/vol26/iss3/1

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ERISA'S REMEDIAL IRONY: NARROWINTERPRETATION PAVES THE WAY FOR JURYTRIALS IN SUITS FOR BREACH OF FIDUCIARY

DUTY UNDER ERISA

Kris Alderman*

INTRODUCTION

When Eugene Scalia, son of Supreme Court Justice AntoninScalia, filed an amicus brief arguing that monetary relief for a breachof fiduciary duty was "traditionally, typically, and exclusively"available in courts of equity, the suggestion was clear that theremedial provisions of the Employee Retirement Income Security Act(ERISA) of 19741 were capable of dividing even families.2 Through aseries of opinions, two of which were written by Justice Scalia, theSupreme Court has narrowly construed the term "equitable" as usedin ERISA's remedial provisions, 3 by excluding money damages fromthat term's ambit.4 In the process, the Court paved the way forplaintiffs seeking money damages under ERISA § 502(a)(2) toexercise their Seventh Amendment right to a jury trial.5

* J.D. 2010, Georgia State University College of Law.1. Employee Retirement Income Security Act (ERISA), Pub. L. No. 93-406, 88 Stat. 829 (1974)

(codified as amended at 29 U.S.C. §§ 1001-1461 (2000)).2. John H. Langbein, What ERISA Means by "Equitable": The Supreme Court's Trail of Error in

Russell, Mertens, andGreat-West, 103 CoLUM. L. REv. 1317, 1352 (2003) (citing Amended Brief of theSecretary of Labor as Amici Curiae Opposing the Motions to Dismiss at 51, In re Enron Corp., No.MDL 1446,2002 WL 32116900 (S.D. Tex. Mar. 28, 2002)).

3. ERISA § 502 (codified as amended at 29 U.S.C. § 1132 (2000)).4. Great-West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204 (2002) (Scalia, J.); Mertens v.

Hewitt Assocs., 508 U.S. 248 (1993) (Scalia, J.); Mass. Mut. Life Ins. Co. v. Russell, 473 U.S. 134(1985) (Stevens, J.). Also relevant to the trilogy of Russell, Mertens, and Great-West is Justice Scalia'sdissenting opinion in Bowen v. Massachusetts, 487 U.S. 879, 913 (1988).

5. See generally Donald T. Bogan, ERISA: Re-Thinking Firestone in Light of Great-West-Implications for Standard of Review and the Right to a Jury Trial in Welfare Benefit Claims, 37 J.MARSHALL L. REV. 629 (2004); Mark D. DeBofsky, The Paradox of the Misuse of Administrative Lawin ERISA Benefit Claims, 37 J. MARSHALL L. REv. 727, 742 (2004); Andrew T. Kusner, Mertens v.Hewitt & Associates, and the ERISA Liability of the Professional Service Provider, 15 BERKELEY J.EMP. & LAB. L. 273,304 (1994).

HeinOnline -- 26 Ga. St. U. L. Rev. 971 2009-2010

ERISA'S REMEDIAL IRONY: NARROW INTERPRETATION PAVES THE WAY FOR JURY TRIALS IN SUITS FOR BREACH OF FIDUCIARY

DUTY UNDER ERISA

Kris Alderman·

INTRODUCTION

When Eugene Scalia, son of Supreme Court Justice Antonin Scalia, filed an amicus brief arguing that monetary relief for a breach of fiduciary duty was "traditionally, typically, and exclusively" available in courts of equity, the suggestion was clear that the remedial provisions of the Employee Retirement Income Security Act (ERISA) of 19741 were capable of dividing even families? Through a series of opinions, two of which were written by Justice Scalia, the Supreme Court has narrowly construed the term "equitable" as used in ERISA's remedial provisions,3 by excluding money damages from that term's ambit.4 In the process, the Court paved the way for plaintiffs seeking money damages under ERISA § 502(a)(2) to exercise their Seventh Amendment right to a jury trial. 5

• J.D. 2010, Georgia State University College of Law. 1. Employee Retirement Income Security Act (ERISA), Pub. L. No. 93--406, 88 Stat. 829 (1974)

(codified as amended at 29 U.S.C. §§ 1001-1461 (2000». 2. John H. Langbein, What ERISA Means by "Equitable": The Supreme Court's Trail of Error in

RusselL Mertens, and Great-West, 103 COLUM. L. REv. 1317, 1352 (2003) (citing Amended Brief of the Secretary of Labor as Amici Curiae Opposing the Motions to Dismiss at 51, In re Enron Corp., No. MOL 1446,2002 WL 32116900 (S.D. Tex. Mar. 28, 2002».

3. ERISA § 502 (codified as amended at 29 U.S.C. § 1132 (2000». 4. Great-West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204 (2002) (Scalia, J.); Mertens v.

Hewitt Assocs., 508 U.S. 248 (1993) (Scalia, J.); Mass. Mut. Life Ins. Co. v. Russell, 473 U.S. 134 (1985) (Stevens, J.). Also relevant to the trilogy of Russell, Mertens, and Great-West is Justice Scalia's dissenting opinion in Bowen v. Massachusetts, 487 U.S. 879, 913 (1988).

5. See generally Donald T. Bogan, ERISA: Re-Thinking Firestone in Light of Great-WestImplications for Standard of Review and the Right to a Jury Trial in Welfare Benefit Claims, 37 J. MARSHALL L. REv. 629 (2004); Mark D. DeBofsky, The Paradox of the Misuse of Administrative Law in ERISA Benefit Claims, 37 J. MARsHALL L. REv. 727, 742 (2004); Andrew T. Kusner, Mertens v. Hewitt & Associates, and the ERISA Liability of the Professional Service Provider, IS BERKELEY J. EMP. & LAB. L. 273, 304 (1994).

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Alderman: ERISA's Remedial Irony: Narrow Interpretation Paves the Way for

Published by Reading Room, 2010

GEORGIA STATE UNIVERSITY LAW REVIEW

The purpose of this Note is to determine whether ERISA, in lightof its interpretation by the Supreme Court, permits a jury trial forplaintiffs seeking damages for a breach of fiduciary duty. Part Iexamines the nature, purposes, and scope of ERISA. 6 Afterpresenting a brief background, this Note surveys the development ofSupreme Court case law relevant to the questions whether damagesare available under § 502(a)(2) and whether damages are legal ratherthan equitable relief.7 Next, the requirements for invoking theSeventh Amendment right to a jury trial are discussed.8 Part II thenapplies relevant Supreme Court jurisprudence to demands for jurytrials under § 502(a)(2) and discusses rationales of lower courtsaddressing the question directly.9 Part III suggests an answer to thequestion, hypothesizes contrary arguments, and discusses thelikelihood of the Supreme Court squarely addressing the question.' 0

Finally, this Note concludes that at least some claims brought underERISA § 502(a)(2) for breach of fiduciary duty permit a jury trialupon demand.

I. BACKGROUND

A. Nature, Purposes, and Scope of ERISA

ERISA was enacted by the 93rd Congress l after a decade oflegislative and executive branch inquiries into the private pension and

6. See discussion infra Part I.A-B.7. See discussion infra Part I.C. The Court recognizes that some forms of restitution, for which

money damages are available, are equitable rather than legal. Great-West, 534 U.S. at 212-13 (holdingrestitution is a legal remedy when the plaintiff "could not assert title or right to possession of particularproperty, but in which he might be able to show just grounds for recovering money to pay for somebenefit the defendant had received from him"; but it is an equitable remedy "where money or propertyidentified as belonging in good conscience to the plaintiff could clearly be traced to particular funds orproperty in the defendant's possession").

8. See discussion infra Part I.D.9. See discussion infra Part H.

10. See discussion infra Part Ill.11. ABA SECTION OF LABOR AND EMPLOYMENT LAW, EMPLOYEE BENEFITS LAW 1, at xxxix (Steven

J. Sacher et al. eds., BNA Books 1991). The 93rd Congress was one of the most active and influential,enacting two other pieces of landmark legislation, the War Powers Act and the Budget Reform andImpoundment Act. Id. Additionally, the 93rd Congress only avoided impeachment proceedings againstPresident Nixon because he resigned first. Id

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972 GEORGIA STATE UNIVERSITY LAW REVIEW [Vol. 26:3

The purpose of this Note is to determine whether ERISA, in light of its interpretation by the Supreme Court, permits a jury trial for plaintiffs seeking damages for a breach of fiduciary duty. Part I examines the nature, purposes, and scope of ERISA. 6 After presenting a brief background, this Note surveys the development of Supreme Court case law relevant to the questions whether damages are available under § 502(a)(2) and whether damages are legal rather than equitable relier,7 Next, the requirements for invoking the Seventh Amendment right to a jury trial are discussed.8 Part II then applies relevant Supreme Court jurisprudence to demands for jury trials under § 502(a)(2) and discusses rationales of lower courts addressing the question directly.9 Part III suggests an answer to the question, hypothesizes contrary arguments, and discusses the likelihood of the Supreme Court squarely addressing the question. 10

Finally, this Note concludes that at least some claims brought under ERISA § 502(a)(2) for breach of fiduciary duty permit a jury trial upon demand.

I. BACKGROUND

A. Nature, Purposes, and Scope of ERISA

ERISA was enacted by the 93rd Congress ll after a decade of legislative and executive branch inquiries into the private pension and

6. See discussion infra Part I.A-B. 7. See discussion infra Part I.C. The Court recognizes that some forms of restitution, for which

money damages are available, are equitable rather than legal. Great-West, 534 U.S. at 212-13 (holding restitution is a legal remedy when the plaintiff "could not assert title or right to possession of particular property, but in which he might be able to show just grounds for recovering money to pay for some benefit the defendant had received from him"; but it is an equitable remedy "where money or property identified as belonging in good conscience to the plaintiff could clearly be traced to particular funds or property in the defendant's possession").

8. See discussion infra Part 1.0. 9. See discussion infra Part II.

10. See discussion infra Part III. 11. ABA SECfION OF LABOR AND EMPLOYMENT LAW, EMPLOYEE BENEFITS LAW I, at xxxix (Steven

J. Sacher et al. eds., BNA Books 1991). The 93rd Congress was one of the most active and inf1uentia~ enacting two other pieces of landmark legislation, the War Powers Act and the Budget Reform and Impoundment Act. Id Additionally, the 93rd Congress only avoided impeachment proceedings against President Nixon because he resigned first. Id

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Georgia State University Law Review, Vol. 26, Iss. 3 [2010], Art. 1

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FIDUCIARY DUTY UNDER ERISA

employee welfare system.12 ERISA was enacted for the benefit ofpension and welfare plan participants and their beneficiaries,regulating employee benefit plans and protecting the funds investedin such plans.' 3 Notwithstanding its simplicity of purpose, ERISA is"an enormously complex and detailed statute that resolvedinnumerable disputes between powerful competing interests-not allin favor of potential plaintiffs.' 4 Since its enactment, ERISA's scopehas been evident from the burden it has placed on the federalcourts-and the courts have noticed ERISA's complexity.' 5 TheCourt has often noted the careful drafting and integration of ERISA'senforcement provisions.' 6

ERISA fiduciary law undoubtedly draws heavily from the commonlaw of trusts.' 7 However, ERISA does not merely codify the commonlaw of trusts. For example, ERISA defines a fiduciary functionally asanyone who exercises control or authority over a plan, rather than interms of formal trusteeship as is done at common law.' 8 By doing so,

12. Id. at 6-7.13. ERISA FIDUCIARY LAW 3 (Susan P. Serota ed., BNA Books 1995); see also 29 U.S.C. § 1001

(2000). For a general discussion of the purposes of ERISA, see ABA SECTION OF LABOR AND

EMPLOYMENT LAW, supra note 11, at 17-19.14. Mertens v. Hewitt Assocs., 508 U.S. 248, 262 (1993). The Court is thus cognizant of the

legislative challenge to balance interests between protecting employees' promised benefits under privateplans offered by employers and employers' interests in controlling costs. Id. at 262-63. The Courtpreviously recognized that Congress was concerned that the cost of federal standards would discouragegrowth of private pension plans. Mass. Mut. Life Ins. Co. v. Russell, 473 U.S. 134, 148 n.17 (1985).Presumably the Court recognized that its ERISA jurisprudence was subject to the same concerns.

15. Dana M. Muir, ERISA Remedies: Chimera or Congressional Compromise?, 81 IOWA L. REV. 1,3 (1995) (reporting that in 1993 Justice White lamented that Supreme Court Justices "have 'ERISAcases coming out of [their] ears' (quoting Fiduciary Responsibility: Justices Question Whether Non-Fiduciary Is Liable for Money Damages Under ERISA, 20 PENSION & BENEFITS REP. (BNA) 524 (Mar.1, 1993))). The Court has perhaps also been lamenting when it has repeatedly observed that ERISA is a"comprehensive and reticulated statute." Great-West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204,209 (2002) (quoting Mertens, 508 U.S. at 251).

16. Great-West, 534 U.S. at 209; Mertens, 508 U.S. at 261-62; Russell, 473 U.S. at 146-47. In spiteof the Court's repeated insistence that the remedial provisions were carefully drafted and integrated,these provisions have not been regarded as perfect. Mertens, 508 U.S. at 259 n.8; Russell, 473 U.S. at156-57 (Brennan, J., dissenting). For a more thorough argument regarding the legislative shortcomingsof the ERISA enforcement scheme, see Langbein, supra note 2, at 1345.

17. LaRue v. DeWolff, Boberg & Assocs., 128 S. Ct. 1020, 1024 n.4 (2008) (citing Varity Corp. v.

Howe, 516 U.S. 489, 496-97 (1996)); Russell, 473 U.S. at 153 n.6 (Brennan, J., concurring); ERISAFIDUCIARY LAW, supra note 13, at 4; Langbein, supra note 2, at 1317; Muir, supra note 15, at 18.

18. Mertens, 508 U.S. at 262. ERISA § 3(21)(A) (codified as amended at 29 U.S.C. § 1002(21)(A)(2000)), provides:

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2010] FIDUCIARY DUTY UNDER ERISA 973

employee welfare system.12

ERISA was enacted for the benefit of

pension and welfare plan participants and their beneficiaries,

regulating employee benefit plans and protecting the funds invested

in such plans.13

Notwithstanding its simplicity of purpose, ERISA is

"an enormously complex and detailed statute that resolved

innumerable disputes between powerful competing interests-not all

in favor of potential plaintiffs.,,14 Since its enactment, ERISA's scope

has been evident from the burden it has placed on the federal

courts-and the courts have noticed ERISA's complexity.15 The

Court has often noted the careful drafting and integration of ERISA's

enforcement provisions. 16

ERISA fiduciary law undoubtedly draws heavily from the common

law of trustsY However, ERISA does not merely codify the common

law of trusts. For example, ERISA defines a fiduciary functionally as

anyone who exercises control or authority over a plan, rather than in

terms of formal trusteeship as is done at common law.18

By doing so,

12. !d. at 6-7. 13. ERISA FIDUCIARY LAW 3 (Susan P. Serota ed., BNA Books 1995); see also 29 U.S.C. § 1001

(2000). For a general discussion of the purposes of ERISA, see ABA SECTION OF LABOR AND

EMPLOYMENT LAW, supra note II, at 17-19. 14. Mertens v. Hewitt Assocs., 508 U.S. 248, 262 (1993). The Court is thus cognizant of the

legislative challenge to balance interests between protecting employees' promised benefits under private plans offered by employers and employers' interests in controlling costs. Id. at 262-{)3. The Court previously recognized that Congress was concerned that the cost of federal standards would discourage growth of private pension plans. Mass. Mut. Life Ins. Co. v. Russell, 473 U.S. 134, 148 n.17 (1985). Presumably the Court recognized that its ERISA jurisprudence was subject to the same concerns.

15. Dana M. Muir, ERISA Remedies: Chimera or Congressional Compromise?, 81 IOWA L. REv. I, 3 (1995) (reporting that in 1993 Justice White lamented that Supreme Court Justices "have 'ERISA cases coming out of [their] ears'" (quoting Fiduciary Responsibility: Justices Question Whether NonFiduciary Is Liable/or Money Damages Under ERISA, 20 PENSION & BENEFITS REp. (BNA) 524 (Mar. I, 1993))). The Court has perhaps also been lamenting when it has repeatedly observed that ERISA is a "comprehensive and reticulated statute." Great-West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204, 209 (2002) (quoting Mertens, 508 U.S. at 251).

16. Great-West, 534 U.S. at 209; Mertens, 508 U.S. at 261-{)2; Russell, 473 U.S. at 146-47. In spite of the Court's repeated insistence that the remedial provisions were carefully drafted and integrated, these provisions have not been regarded as perfect. Mertens, 508 U.S. at 259 n.8; Russell, 473 U.S. at 156-57 (Brennan, J., dissenting). For a more thorough argument regarding the legislative shortcomings of the ERISA enforcement scheme, see Langbein, supra note 2, at 1345.

17. laRue v. DeWolff, Boberg & Assocs., 128 S. Ct. 1020, 1024 n.4 (2008) (citing Varity Corp. v. Howe, 516 U.S. 489, 496-97 (1996)); Russell, 473 U.S. at 153 n.6 (Brennan, J., concurring); ERISA FIDUCIARY LAw, supra note 13, at4; Langbein, supra note 2, at 1317; Muir, supra note 15, at 18.

18. Mertens, 508 U.S. at 262. ERISA § 3(21)(A) (codified as amended at 29 U.S.C. § 1002(21)(A) (2000)), provides:

3




ERISA expands its coverage beyond that of common law trustprinciples.' 9 ERISA § 404 outlines fiduciary duties, the basic premisebeing that fiduciaries must act solely in the interest of beneficiaries,with fiduciary actions being tested under the prudent man standard. 20

Section 409 describes the liability of fiduciaries for breaches of their22*duty.21 Finally, § 502 creates causes of action, including a right of

action for fiduciary liability created under § 409.23 However, despiteERISA's complexity and integration, the statute does not expresslyprovide whether a jury trial is available.24

B. ERISA § 502(a)(2) and Other Relevant Enforcement Provisions

ERISA § 502(a)(2) permits the Secretary of Labor or a planparticipant, beneficiary, or fiduciary to bring a civil action for"appropriate relief under section 409. ,25 In turn, under § 409, "[tjhefiduciary is personally liable for damages . . . for restitution ... andfor 'such other equitable or remedial relief as the court may deemappropriate,' including removal of the fiduciary." 26 Two other

Except as otherwise provided in subparagraph (B), a person is a fiduciary with respect toa plan to the extent (i) he exercises any discretionary authority or discretionary controlrespecting management of such plan or exercises any authority or control respectingmanagement or disposition of its assets, (ii) he renders investment advice for a fee orother compensation, direct or indirect, with respect to any moneys or other property ofsuch plan, or has any authority or responsibility to do so, or (iii) he has any discretionaryauthority or discretionary responsibility in the administration of such plan. Such termincludes any person designated under section 1 105(c)(1)(B) of this title.

19. Mertens, 508 U.S. at 262.20. ERISA FIDUCIARY LAW, supra note 13, at 19-21; see 29 U.S.C. § 1104 (2000).21. ERISA § 409 (codified as amended at 29 U.S.C. § 1109 (2000)).22. Id. § 502 (codified as amended at 29 U.S.C. § 1132 (2000)).23. Id. § 502(a)(2) (codified as amended at 29 U.S.C. § 1132(a)(2) (2000)).24. ABA SECTION OF LABOR AND EMPLOYMENT LAW, supra note 11, at 527, 634-40; ERISA

FIDUCIARY LAW, supra note 13, at 403.25. ERISA § 502(a)(2) (codified as amended at 29 U.S.C. § 1132(a)(2) (2000)). The use of the word

"appropriate" is interesting in this context. Although the Court has never expressly interpreted thatlanguage in the statute, Chief Justice Roberts recently suggested that it should be interpreted in the sameway that the Court has interpreted "appropriate" in the phrase "other appropriate equitable relief" in§ 502(a)(3)-to preclude relief under this section if any other section would afford the plaintiff anadequate remedy. LaRue v. DeWolff, Boberg & Assocs., Inc., 128 S, Ct. 1020, 1026-27 (2008)(Roberts, C.J., concurring). Regardless of the merits of this suggestion, it at least raises the question ofwhy Congress thought it important to use the word "appropriate."

26. Mertens v. Hewitt Assocs., 508 U.S. 248, 253 (1993) (internal quotations omitted). 29 U.S.C.§ 1109(a) (2000) provides:

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ERISA expands its coverage beyond that of common law trust

principles. 19 ERISA § 404 outlines fiduciary duties, the basic premise

being that fiduciaries must act solely in the interest of beneficiaries,

with fiduciary actions being tested under the prudent man standard. 20

Section 409 describes the liability of fiduciaries for breaches of their

duty.21 Finally, § 502 creates causes of action,22 including a right of

action for fiduciary liability created under § 409?3 However, despite

ERISA's complexity and integration, the statute does not expressly

provide whether a jury trial is available.24

B. ERISA § 502(a)(2) and Other Relevant Enforcement Provisions

ERISA § 502(a)(2) permits the Secretary of Labor or a plan

participant, beneficiary, or fiduciary to bring a civil action for

"appropriate relief under section 409.,,25 In tum, under § 409, "[t]he

fiduciary is personally liable for damages ... for restitution ... and

for 'such other equitable or remedial relief as the court may deem

appropriate, ' including removal of the fiduciary. ,,26 Two other

Except as otheIWise provided in subparagraph (B), a person is a fiduciary with respect to a plan to the extent (i) he exercises any discretionary authority or discretionary control respecting management of such plan or exercises any authority or control respecting management or disposition of its assets, (ii) he renders investment advice for a fee or other compensation, direct or indirect, with respect to any moneys or other property of such plan, or has any authority or responsibility to do so, or (iii) he has any discretionary authority or discretionary responsibility in the administration of such plan. Such term includes any person designated under section I !05(c)(I)(B) of this title.

19. Mertens, 508 U.S. at 262. 20. ERISA FIDUCIARY LAW, supra note 13, at 19-21; see 29 U.S.C. § 11 04 (2000). 21. ERISA § 409 (codified as amended at 29 U.S.C. § 1109 (2000». 22. ld. § 502 (codified as amended at 29 U.S.C. § 1132 (2000». 23. ld. § 502(a)(2) (codified as amended at 29 U.S.C. § I I 32(a)(2) (2000». 24. ABA SECfION OF LABOR AND EMPLOYMENT LAw, supra note 11, at 527, 634-40; ERISA

FIDUCIARY LAW,supra note 13, at 403. 25. ERISA § 502(a)(2) (codified as amended at 29 U.S.C. § I I 32(a)(2) (2000». The use of the word

"appropriate" is interesting in this context. Although the Court has never expressly interpreted that language in the statute, Chief Justice Roberts recently suggested that it should be interpreted in the same way that the Court has interpreted "appropriate" in the phrase "other appropriate equitable relief' in § 502(a)(3}--to preclude relief under this section if any other section would afford the plaintiff an adequate remedy. LaRue v. DeWolff, Boberg & Assocs., Inc., 128 S. Ct. 1020, 1026-27 (2008) (Roberts, C.J., concurring). Regardless of the merits of this suggestion, it at least raises the question of why Congress thought it important to use the word "appropriate."

26. Mertens v. Hewitt Assocs., 508 U.S. 248, 253 (1993) (internal quotations omitted). 29 U.S.C. § 1109(a) (2000) provides:

4




remedial provisions are important in understanding the Court'sjurisprudence in the area of ERISA remedies. Section 502(a)(1)(B)provides that a participant or beneficiary may bring a civil action "torecover benefits due to him under the terms of his plan, to enforce hisrights under the terms of the plan, or to clarify his rights to futurebenefits under the terms of the plan." 27 Section 502(a)(3) is a"catchall provision," providing for equitable relief for injuries notadequately remedied by the other provisions of § 502.28 ERISA'sother enforcement provisions are not pertinent to understanding§ 502(a)(2).

C. Supreme Court Jurisprudence Relevant to ERISA 's RemedialProvisions

1. Massachusetts Mutual Life Insurance Co. v. Russell 29

In a 5-4 decision, the Court in Massachusetts Mutual LifeInsurance Co. decided that a participant or beneficiary cannot recoverextracontractual or punitive damages for a claim brought under§ 502(a)(2).3" Justice Stevens, writing for the Court, stated that § 409was clearly concerned with protecting the plan as a whole frommisuse of assets rather than providing a cause of action to individual

Any person who is a fiduciary with respect to a plan who breaches any of theresponsibilities, obligations, or duties imposed upon fiduciaries by this subchapter shallbe personally liable to make good to such plan any losses to the plan resulting from eachsuch breach, and to restore to such plan any profits of such fiduciary which have beenmade through use of assets of the plan by the fiduciary, and shall be subject to such otherequitable or remedial relief as the court may deem appropriate, including removal of suchfiduciary.

27. 29 U.S.C. § 132(a)(l)(B) (2000).28. Varity Corp. v. Howe, 516 U.S. 489, 512 (1996). 29 U.S.C. § 1132(a)(3) provides:

A civil action may be brought by a participant, beneficiary, or fiduciary (A) to enjoin anyact or practice which violates any provision of this subchapter or the terms of the plan, or(B) to obtain other appropriate equitable relief (i) to redress such violations or (ii) toenforce any provisions of this subchapter or the terms of the plan.

29. Mass. Mut. Life Ins. Co. v. Russell, 437 U.S. 134 (1985).30. Id. at 144. The Court expressly decided the narrow question presented-whether a beneficiary or

participant is entitled to recover extracontractual and punitive damages for a breach of fiduciary duty-rather than the broader question of whether a fiduciary may ever be liable for extracontractual orpunitive damages, for example where the plaintiff seeks recovery inuring to the plan itself. Id. at 144n.12.

20101



remedial provisions are important in understanding the Court's jurisprudence in the area of ERISA remedies. Section 502(a)(1)(B) provides that a participant or beneficiary may bring a civil action "to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan.'.27 Section 502(a)(3) is a "catchall provision," providing for equitable relief for injuries not adequately remedied by the other provisions of § 502.28 ERISA's other enforcement provisions are not pertinent to understanding § 502(a)(2).

C. Supreme Court Jurisprudence Relevant to ERISA's Remedial Provisions

1. Massachusetts Mutual Life Insurance Co. v. Russell29

In a 5-4 decision, the Court in Massachusetts Mutual Life Insurance Co. decided that a participant or beneficiary cannot recover extracontractual or punitive damages for a claim brought under § 502(a)(2).30 Justice Stevens, writing for the Court, stated that § 409 was clearly concerned with protecting the plan as a whole from misuse of assets rather than providing a cause of action to individual

Any person who is a fiduciary with respect to a plan who breaches any of the responsibilities, obligations, or duties imposed upon fiduciaries by this subchapter shall be personally liable to make good to such plan any losses to the plan resulting from each such breach, and to restore to such plan any profits of such fiduciary which have been made through use of assets of the plan by the fiduciary, and shall be subject to such other equitable or remedial relief as the court may deem appropriate, including removal of such fiduciary.

27. 29 U.S.C. § 1132(a)(I)(B) (2000). 28. Varity Corp. v. Howe, 516 U.S. 489, 512 (1996). 29 U.S.C. § 1132(a)(3) provides:

A civil action may be brought by a participant, beneficiary, or fiduciary (A) to enjoin any act or practice which violates any provision of this subchapter or the terms of the plan, or (8) to obtain other appropriate equitable relief (i) to redress such violations or (ii) to enforce any provisions of this subchapter or the terms of the plan.

29. Mass. Mut. Life Ins. Co. v. Russell, 437 U.S. 134 (1985). 30. Id. at 144. The Court expressly decided the narrow question presented-whether a beneficiary or

participant is entitled to recover extracontractual and punitive damages for a breach of fiduciary duty-rather than the broader question of whether a fiduciary may ever be liable for extracontractual or punitive damages, for example where the plaintiff seeks recovery inuring to the plan itself. Id. at 144 n.l2.

5




beneficiaries. 31 The principal duties imposed on fiduciaries "relate tothe proper management, administration, and investment of fundassets, the maintenance of proper records, the disclosure of specifiedinformation, and the avoidance of conflicts of interest." 32 Given thatERISA is comprehensive legislation with an integrated system ofenforcement, there is a strong presumption that Congress did notintend to allow any remedies not expressly provided by statute.33

Concurring in the judgment only, Justice Brennan agreed that§ 502(a)(2) was not the proper vehicle for recovery to an individualbeneficiary or participant.34 However, apparently because he inferredthat the plaintiff was not entitled to recovery under the majorityopinion, Justice Brennan argued that § 502(a)(3), the catchallprovision, allows an individual plaintiff to recover extracontractual orpunitive damages from a fiduciary for a breach of duty.35 JusticeBrennan's opinion relies on the common law of trusts, whichtraditionally constructed make-whole remedies to strictly enforcefiduciary duties and protect beneficiaries. 36

31. Id. at 142.32. Id. at 142-43.33. Russell, 437 U.S. at 146-48. The Court also found support from the fact an early version of the

bill included a provision for legal and equitable relief, described as providing the full range of legal andequitable remedies, but in the version finally enacted the reference to legal relief was deleted. Id. at 145-46. It is not clear how crucial this factor was in the Court's decision, although the fact that the Court didnot use it to reject outright the possibility that the legal remedies sought were unavailable under any setof facts is evidence that it was not controlling. Id. at 144 n.12.

34. Id. at 150 (Brennan, J., concurring).35. Id. Brennan's argument embraces the broader meaning of "equitable," i.e., relief that was

available in courts of equity for a breach of fiduciary duty, which is thoroughly rejected by the Court inMertens and Great- West.

36. Russell, 473 U.S. at 156-57 (Brennan, J., concurring). The argument relies on ERISA'slegislative history for the propositions that ERISA engrafted the common law of trusts on fiduciarieswith modifications, allowing the courts to develop a federal common law of ERISA. While a majority ofthe Court's jurisprudence in this area has developed without the use of legislative history, these twoarguments have been unquestionably accepted. See, e.g., Firestone Tire & Rubber Co. v. Bruch, 489U.S. 101, 110 (1989) ("Given [the statutory] language and history, we have held that courts are todevelop a 'federal common law of rights and obligations under ERISA-regulated plans."' (quoting PilotLife Ins. Co. v. Dedeaux, 481 U.S. 41, 56 (1987))).

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976 GEORGIA STATE UNIVERSITY LAW REVIEW IVol. 26:3

beneficiaries.31 The principal duties imposed on fiduciaries "relate to the proper management, administration, and investment of fund assets, the maintenance of proper records, the disclosure of specified information, and the avoidance of conflicts of interest.,,32 Given that ERISA is comprehensive legislation with an integrated system of enforcement, there is a strong presumption that Congress did not intend to allow any remedies not expressly provided by statute. 33

Concurring in the judgment only, Justice Brennan agreed that § 502(a)(2) was not the proper vehicle for recovery to an individual beneficiary or participant.34 However, apparently because he inferred that the plaintiff was not entitled to recovery under the majority opinion, Justice Brennan argued that § 502(a)(3), the catchall provision, allows an individual plaintiff to recover extracontractual or punitive damages from a fiduciary for a breach of duty.35 Justice Brennan's opinion relies on the common law of trusts, which traditionally constructed make-whole remedies to strictly enforce fiduciary duties and protect beneficiaries.36

31. ld. at 142. 32. ld. at 142-43. 33. Russell, 437 U.S. at 146-48. The Court also found support from the fact an early version of the

bill included a provision for legal and equitable relief, described as providing the full range of legal and equitable remedies, but in the version finally enacted the reference to legal relief was deleted. ld. at 145-46. It is not clear how crucial this factor was in the Court's decision, although the fact that the Court did not use it to reject outright the possibility that the legal remedies sought were unavailable under any set offacts is evidence that it was not controlling. ld. at 144 n.12.

34. ld. at 150 (Brennan, J., concurring). 35. ld. Brennan's argument embraces the broader meaning of "equitable," i.e., relief that was

available in courts of equity for a breach of fiduciary duty, which is thoroughly rejected by the Court in Mertens and Great-West.

36. Russell, 473 U.S. at 156-57 (Brennan, J., concurring). The argument relies on ERISA's legislative history for the propositions that ERISA engrafted the common law of trusts on fiduciaries with modifications, allowing the courts to develop a federal common law of ERISA. While a majority of the Court's jurisprudence in this area has developed without the use of legislative history, these two arguments have been unquestionably accepted. See, e.g., Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 110 (1989) ("Given [the statutory] language and history, we have held that courts are to develop a 'federal common law of rights and obligations under ERISA-regulated plans.'" (quoting Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41,56 (1987))).

6




2. Bowen v. Massachusetts37

Although not an ERISA decision, Bowen is relevant because itprovides a preview of Justice Scalia's arguments regarding the natureof legal and equitable relief that dominate later developments inERISA remedial law.38 Justice Scalia's Bowen arguments, made indissent, urged that differentiation between damages 39 and specificrelief must be based on the claim's substance rather than form.4 ° AsJustice Scalia noted, "[d]amages compensate the plaintiff for a loss"or injury resulting from a breach of legal duty, but specific relief"prevents or undoes" a loss, for example by ordering the return of theprecise property wrongfully taken or enjoining acts that would causea future injury.4 1 According to Justice Scalia, "[a]lmost invariably...suits seeking (whether by judgment, injunction, or declaration) tocompel the defendant to pay a sum of money to the plaintiff are suitsfor 'money damages' ' ,,42 Not only the rationale, but exactlanguage from Justice Scalia's Bowen dissent would become themajority opinion in subsequent ERISA cases.

3. Mertens v. Hewitt Associates 43

In Mertens, the Court again split 5-4,44 holding that a nonfiduciaryis not liable for knowingly participating in a breach of fiduciary duty

37. Bowen v. Massachusetts, 487 U.S. 879 (1988).38. The principal question presented was whether the federal courts had jurisdiction to review a final

order of the Secretary of Health and Human Services refusing to reimburse the state for certainexpenditures under Medicaid. Id. at 882. Resolution of the jurisdictional question was dependent uponwhether the plaintiff sought money damages or specific relief. Id. at 893.

39. Justice Scalia notes initially that "money damages" is redundant since "the term 'damages' refersto money awarded as reparation for injury resulting from breach of legal duty." Id. at 913 (Scalia, J.,dissenting). See BLACK'S LAW DICTIONARY 416 (8th ed. 2004) (defining damages as "[m]oney claimedby, or ordered to be paid to, a person as compensation for loss or injury," not defining the term "moneydamages").

40. Bowen, 487 U.S. at 915-16 (Scalia, J., dissenting). Indeed, if the division focused on form ratherthan substance, the line between specific relief and money damages could be manipulated by lawyerlyinventiveness (and perhaps little of it would be required) in wording the claim. Id.

41. Id. at 913-14. Conceding that claims may fit both the classic definition of a suit for moneydamages and also fit the description of specific relief, Justice Scalia asserts that, according to thecommon law tradition, recovery of a past due sum that does nothing more than compensate the plaintiffis recognized as a claim for money damages rather than specific relief. Id. at 917-18.

42. Id. at918-19.43. Mertens v. Hewitt Assocs., 508 U.S. 248 (1993).

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2010) FIDUCIARY DUTY UNDER ERISA 977

2. Bowen v. Massachusetts37

Although not an ERISA decision, Bowen is relevant because it provides a preview of Justice Scalia's arguments regarding the nature of legal and equitable relief that dominate later developments in ERISA remediallaw.38 Justice Scalia's Bowen arguments, made in dissent, urged that differentiation between damages39 and specific relief must be based on the claim's substance rather than form. 4o As Justice Scalia noted, "[ d]amages compensate the plaintiff for a loss" or injury resulting from a breach of legal duty, but specific relief "prevents or undoes" a loss, for example by ordering the return of the precise property wrongfully taken or enjoining acts that would cause a future injury.41 According to Justice Scalia, "[a]lmost invariably ... suits seeking (whether by judgment, injunction, or declaration) to compel the defendant to pay a sum of money to the plaintiff are suits for 'money damages' ... .'.42 Not only the rationale, but exact language from Justice Scalia's Bowen dissent would become the majority opinion in subsequent ERISA cases.

3. Mertens v. Hewitt Associates43

In Mertens, the Court again split 5_4,44 holding that a nonfiduciary is not liable for knowingly participating in a breach of fiduciary duty

37. Bowen v. Massachusetts, 487 U.S. 879 (1988). 38. The principal question presented was whether the federal courts had jurisdiction to review a fmal

order of the Secretary of Health and Human Services refusing to reimburse the state for certain expenditures under Medicaid. Id at 882. Resolution of the jurisdictional question was dependent upon whether the plaintiff sought money damages or specific relief. Id at 893.

39. Justice Scalia notes initially that "money damages" is redundant since "the term 'damages' refers to money awarded as reparation for injury resulting from breach of legal duty." Id. at 913 (Scalia, J., dissenting). See BLACK'S LAW DICTIONARY 416 (8th ed. 2004) (defming damages as "[m]oney claimed by, or ordered to be paid to, a person as compensation for loss or injury," not defining the term "money damages").

40. Bowen, 487 U.S. at 915-16 (Scalia, J., dissenting). Indeed, if the division focused on form rather than substance, the line between specific relief and money damages could be manipulated by lawyerly inventiveness (and perhaps little of it would be required) in wording the claim. !d.

41. !d. at 913-14. Conceding that claims may fit both the classic definition of a suit for money damages and also fit the description of specific relief, Justice Scalia asserts that, according to the cornmon law tradition, recovery of a past due sum that does nothing more than compensate the plaintiff is recognized as a claim for money damages rather than specific relief. Id. at 917-18.

42. Id at 918--19. 43. Mertens v. Hewitt Assocs., 508 U.S. 248 (1993).

7




that results in injury to a plan.45 The plaintiffs in Mertens expresslydisclaimed reliance on § 502(a)(2), instead suing under § 502(a)(3).46

The plaintiffs sought money damages--"the classic form of legalrelief'-for losses resulting from the breach of fiduciary duty.47

However, unlike § 502(a)(2), which expressly makes a fiduciarypersonally liable in damages, 48 § 502(a)(3) authorizes only equitablerelief.49 The plaintiffs argued that money damages are authorizedunder § 502(a)(3) pursuant to the authority for courts to award "otherappropriate equitable relief."50 The Court conceded that "otherappropriate equitable relief' could mean either "whatever relief acourt of equity is empowered to provide in the particular case atissue," or it could mean only "those categories of relief that weretypically available in equity." 51 But the Court determined that thelatter meaning was undoubtedly correct, 52 because the formermeaning would render the modifier "equitable" superfluous 53 andwould be inconsistent with the meaning ascribed to "equitable"elsewhere in ERISA.54

44. The particular alignment of justices in this decision is worth noting-Justice Scalia wrote theopinion of the Court, joined by Justices Thomas, Souter, Kennedy, and Blackmun, and Justice White,joined by Justices Rehnquist, Stevens, and O'Connor dissented. Id. at 249.

45. Id. at 261.46. Given that the plaintiff sought liability against a nonfiduciary, it is exceedingly unlikely that the

result would have been different if the claim was brought under § 502(a)(2). See 29 U.S.C. § 1109(a)(2000); Mertens, 508 U.S. at 254.

47. Mertens, 508 U.S. at 255 ("[Plaintiffs] do not . . . seek a remedy traditionally viewed asequitable, such as injunction or restitution."). Notably, Justice Scalia later backs away from anyimplication that restitution is typically an equitable remedy. Great-West Life & Annuity Ins. Co. v.Knudson, 534 U.S. 204, 215 (2002) (citing Reich v. Cont'l Cas. Co., 33 F.3d 754, 756 (7th Cir. 1994)(Posner, J.)). And Justice Scalia had already said that an injunction to merely pay a sum of money was asuit for money damages, Bowen, 487 U.S. at 918-19 (Scalia, J., dissenting), and Justice Scalia reiteratedthat view in Great-West, 534 U.S. at 210.

48. Mertens, 508 U.S. at 252-53; see also 29 U.S.C. § 1109(a) (2000).49. Id. at 253 (citing 29 U.S.C. § I 132(a)(3) (2000)).50. Id. (quoting 29 U.S.C. § 11 32(a)(3) (2000)).51. Id. at 256.52. Id at 257.53. Id. at 258 ("Since all relief... could be obtained from a court of equity, limiting the sort of relief

obtainable under § 502(a)(3) to 'equitable relief' in the sense of 'whatever relief a common-law court ofequity could provide [for breach of fiduciary duty]' would limit the relief not at all. We will not read thestatute to render the modifier superfluous.").

54. Mertens, 508 U.S. at 258. (asserting that Congress's distinction between "equitable" and"remedial" (ERISA § 409) and between "equitable" and "legal" (ERISA § 502(g)(2)(e)) would be

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978 GEORGIA STATE UNIVERSITY LAW REVIEW (Vol. 26:3

that results in injury to a plan.45

The plaintiffs in Mertens expressly

disclaimed reliance on § 502(a)(2), instead suing under § 502(a)(3).46

The plaintiffs sought money damages-"the classic form of legal relief'-for losses resulting from the breach of fiduciary duty.47

However, unlike § 502(a)(2), which expressly makes a fiduciary

personally liable in damages,48 § 502(a)(3) authorizes only equitable

relief.49

The plaintiffs argued that money damages are authorized

under § 502(a)(3) pursuant to the authority for courts to award "other

appropriate equitable relief.,,50 The Court conceded that "other

appropriate equitable relief' could mean either "whatever relief a

court of equity is empowered to provide in the particular case at

issue," or it could mean only "those categories of relief that were

typically available in equity.,,51 But the Court determined that the

latter meaning was undoubtedly correct,52 because the former

meaning would render the modifier "equitable" superfluous53

and

would be inconsistent with the meaning ascribed to "equitable"

elsewhere in ERISA. 54

44. The particular alignment of justices in this decision is worth noting-Justice Scalia wrote the opinion of the Court, joined by Justices Thomas, Souter, Kennedy, and Blackmun, and Justice White, joined by Justices Rehnquist, Stevens, and O'Connor dissented. Id. at 249.

45. ld. at 261. 46. Given that the plaintiff sought liability against a non fiduciary, it is exceedingly unlikely that the

result would have been different if the claim was brought under § 502(a)(2). See 29 U.S.C. § I \09(a) (2000); Mertens, 508 u.s. at 254.

47. Mertens, 508 U.S. at 255 ("[Plaintiffs] do not ... seek a remedy traditionally viewed as equitable, such as injunction or restitution."). Notably, Justice Scalia later backs away from any implication that restitution is typicaUy an equitable remedy. Great-West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204, 215 (2002) (citing Reich v. Cont'l Cas. Co., 33 F.3d 754, 756 (7th Cir. 1994) (posner, J.». And Justice Scalia had already said that an injunction to merely pay a sum of money was a suit for money damages, Bowen, 487 U.S. at 918-19 (Scalia, J., dissenting), and Justice Scalia reiterated that view in Great-West, 534 U.S. at 210.

48. Mertens, 508 U.S. at 252-53; see also 29 U.S.C. § I \09(a) (2000). 49. Id. at 253 (citing 29 U.S.C. § I 132(a)(3) (2000». 50. [d. (quoting 29 U.S.C. § I 132(a)(3) (2000». 51. [d. at 256. 52. [d. at 257. 53. Id. at 258 ("Since all relief ... could be obtained from a court of equity, limiting the sort of relief

obtainable under § 502(a)(3) to 'equitable relief in the sense of 'whatever relief a common-law court of equity could provide [for breach of fiduciary duty]' would limit the relief not at all. We will not read the statute to render the modifier superfluous.").

54. Mertens, 508 U.S. at 258. (asserting that Congress's distinction between "equitable" and "remedial" (ERISA § 409) and between "equitable" and "legal" (ERISA § 502(g)(2)(e» would be

8




In dissent, Justice White pointed out the anomaly of interpretingERISA to provide participants and beneficiaries with less protectionthan they had before ERISA, under the common law of trusts.55

Echoing Justice Brennan's Russell dissent, White asserted thatCongress did not carefully craft the enforcement provisions. Forexample, Congress did not likely carefully differentiate between"equitable" and "remedial" relief.56 But the majority answered thisargument, stating that even if the distinction is "artless," itnonetheless must be observed as a textual distinction.57 The Court didnot, however, clarify or suggest a possible meaning of "remedial" in§ 409, but reiterated that "[e]quitable relief' must mean somethingless than all relief."58

4. Great-West Life & Annuity Insurance Co. v. Knudson 59

In Great- West, the Court again decided 5-4,60 holding thatplaintiffs could not enforce a reimbursement provision in an ERISAplan by bringing a claim under § 502(a)(3). 61 Regardless of whether aclaim is drafted like a claim for injunctive or restitutionary relief, aclaim that seeks nothing more than monetary compensation for a lossis merely a claim for damages62-the classic form of legal relief63 -

which is not available under § 502(a)(3). 64 Restitution in the form ofmoney is only equitable when the plaintiff identifies the money"belonging in good conscience" to him and traces it to particular

meaningless if the Court interpreted "equitable relief" to mean all forms of relief available in equity fora breach of fiduciary duty and ascribed that meaning to these parallel ERISA provisions).

55. Id. at 263-64 (White, J., dissenting).56. Id. at 270 n.4 ("What limiting principle Congress could have intended to convey by [remedial] I

cannot readily imagine. 'Remedial,' after all, simply means 'intended as a remedy,'.. . and 'relief is

commonly understood to be a synonym for 'remedy."' (quoting WEBSTER'S NINTH NEW COLLEGIATEDICTIONARY 996 (1983))).

57. Id. at 259 n.8 (majority opinion).58. Id. The Court pointed out that Congress also used the phrase "other equitable or remedial relief"

in 5 U.S.C. § 8477(e)(1)(A). Id. However, that language has not been interpreted by the courts.59. Great-West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204 (2002).60. This time the breakdown of Justices was more traditional, with Justices Scalia, Rehnquist,

Thomas, O'Connor, and Kennedy against Ginsburg, Breyer, Souter, and Stevens. Id. at 206.61. Id. at218.62. Id. at 210 (citing Bowen v. Massachusetts, 487 U.S. 879, 918-19 (1988)).63. Id. (citing Mertens v. Hewitt Assocs., 508 U.S. 248, 255 (1993)).64. Id. at218.

20101



In dissent, Justice White pointed out the anomaly of interpreting ERISA to provide participants and beneficiaries with less protection than they had before ERISA, under the common law of trusts. 55 Echoing Justice Brennan's Russell dissent, White asserted that Congress did not carefully craft the enforcement provisions. For example, Congress did not likely carefully differentiate between "equitable" and "remedial" relief. 56 But the majority answered this argument, stating that even if the distinction is "artless," it nonetheless must be observed as a textual distinction. 57 The Court did not, however, clarify or suggest a possible meaning of "remedial" in § 409, but reiterated that "[e]quitable relief' must mean something less than all relief. ,,58

4. Great-West Life & Annuity Insurance Co. v. Knudson59

In Great- West, the Court again decided 5_4,60 holding that plaintiffs could not enforce a reimbursement provision in an ERISA plan by bringing a claim under § 502(a)(3).61 Regardless of whether a claim is drafted like a claim for injunctive or restitutionary relief, a claim that seeks nothing more than monetary compensation for a loss is merely a claim for damages62-the classic form of legal reliefi3-which is not available under § 502(a)(3).64 Restitution in the form of money is only equitable when the plaintiff identifies the money "belonging in good conscience" to him and traces it to particular

meaningless if the Court interpreted "equitable relief' to mean all forms of relief available in equity for a breach of fiduciary duty and ascribed that meaning to these parallel ERISA provisions).

55. /d. at 263-64 (White, J., dissenting). 56. Id. at 270 nA ("What limiting principle Congress could have intended to convey by [remedial] I

cannot readily imagine. 'Remedial,' after all, simply means 'intended as a remedy,' ... and 'relief is commonly understood to be a synonym for 'remedy.''' (quoting WEBSTER'S NINTH NEW COLLEGIATE DICTIONARY 996 (1983»).

57. /d. at 259 n.8 (majority opinion). 58. Id. The Court pointed out that Congress also used the phrase "other equitable or remedial relief'

in 5 U.S.c. § 8477(e)(I)(A). Id. However, that language has not been interpreted by the courts. 59. Great-West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204 (2002). 60. This time the breakdown of Justices was more traditional, with Justices Scalia, Rehnquist,

Thomas, O'Connor, and Kennedy against Ginsburg, Breyer, Souter, and Stevens. Id. at 206. 61. Id. at 218. 62. Id. at 210 (citing Bowen v. Massachusetts, 487 U.S. 879,918-19 (1988». 63. Id. (citing Mertens v. Hewitt Assocs., 508 U.s. 248, 255 (1993». 64. Id. at 218.

9




funds in the defendant's possession.6 5 On the other hand, restitutionseeking merely to hold the defendant personally liable to the plaintiffis legal relief.66 Thus, whether a claim is legal or equitable isdetermined with reference to the basis for the claim and the nature ofthe underlying remedies sought.67 Determining whether relief soughtin a particular case is legal or equitable will rarely require more thanconsulting "standard current works." 68 Perhaps sensitive to assertionsthat the majority result was contrary to congressional intention,69

Justice Scalia wrote, "[i]t is ... not our job to find reasons for whatCongress has plainly done; and it is our job to avoid rendering whatCongress has plainly done... devoid of reason and effect., 70

Writing in dissent, Justice Ginsburg argued that it was "fanciful" tobelieve that Congress intended the technical distinction between legaland equitable relief that the majority attributed to it.71 Further, sheargued, the fact that the Court examines the state of the common lawas it existed in 1791 to preserve the right to a jury trial as it existeddoes not justify an examination of the law in 1791 to give meaning toa statute enacted in 1974.72

5. Sereboff v. Mid Atlantic Medical Services 73

Writing for a unanimous court in 2006, 74 Chief Justice Roberts inSereboff distinguished the case from Great- West, where an employersought to enforce a reimbursement provision through a judgment formoney not in the participant's possession.75 In Sereboff, the Courtapplied the reasoning of Great-West to determine that since the

65. Great-West, 534 U.S. at 213.66. Id.67. Id.68. Id. at 217 (indentifying Dobbs, Palmer, Corbin, and the Restatements as "standard current

works"). Perhaps out of character, Justice Scalia did not respond to Justice Ginsburg's complaint that the"standard current works" do not always yield a single, consistent answer. See id. at 232 (Ginsburg, J.,dissenting).

69. Id. at 223 (Stevens, J., dissenting); id. at 234 (Ginsburg, J., dissenting).70. Id. at 217-18 (majority opinion).71. Great-West, 534 U.S. at 225, 227 (Ginsburg, J., dissenting).72. Id. at 233.73. Sereboffv. Mid At. Med. Servs., Inc., 547 U.S. 356 (2006).74. Id. at 359.75. Id. at 362.

[Vol. 26:3



funds in the defendant's possession.65 On the other hand, restitution seeking merely to hold the defendant personally liable to the plaintiff is legal relief.66 Thus, whether a claim is legal or equitable is detennined with reference to the basis for the claim and the nature of the underlying remedies sought. 67 Determining whether relief sought in a particular case is legal or equitable will rarely require more than consulting "standard current works.,,68 Perhaps sensitive to assertions that the majority result was contrary to congressional intention,69 Justice Scalia wrote, "[ilt is ... not our job to find reasons for what Congress has plainly done; and it is our job to avoid rendering what Congress has plainly done ... devoid of reason and effect.,,70

Writing in dissent, Justice Ginsburg argued that it was "fanciful" to believe that Congress intended the technical distinction between legal and equitable relief that the majority attributed to it. 7

I Further, she argued, the fact that the Court examines the state of the common law as it existed in 1791 to preserve the right to a jury trial as it existed does not justify an examination of the law in 1791 to give meaning to a statute enacted in 1974.72

5. Sereboffv. Mid Atlantic Medical Services73

Writing for a unanimous court in 2006,74 Chief Justice Roberts in Sereboff distinguished the case from Great- West, where an employer sought to enforce a reimbursement provision through a judgment for money not in the participant's possession.75 In Sereboff, the Court applied the reasoning of Great- West to determine that since the

65. Great-West, 534 U.S. at 213. 66. !d. 67. !d. 68. [d. at 217 (indentifying Dobbs, Palmer, Corbin, and the Restatements as "standard current

works"). Perhaps out of character, Justice Scalia did not respond to Justice Ginsburg's complaint that the "standard current works" do not always yield a single, consistent answer. See id. at 232 (Ginsburg, J., dissenting).

69. !d. at 223 (Stevens, J., dissenting); id. at 234 (Ginsburg, 1., dissenting). 70. [d. at 217-18 (majority opinion). 71. Great-West, 534 U.S. at 225,227 (Ginsburg, 1., dissenting). 72. [d. at 233. 73. Sereboffv. Mid Atl. Med. Servs., Inc., 547 U.S. 356 (2006). 74. [d. at 359. 75. [d. at 362.

10




plaintiff sought nothing more than recovery of "'specificallyidentifiable' funds . . . 'within the possession and control of theSereboff's,"' in other words a constructive trust or equitable lien onsettlement proceeds, the plaintiff could recover under the "otherappropriate equitable relief' provision of § 502(a)(3).7 6 The resultwas uncontroversial. In fact, shortly after announcing the decision inSereboff, the Chief Justice touted it as a simplification of the law.77

6. LaRue v. DeWolff, Boberg & Associates, Inc. 78

Recognizing fundamental changes in pension plans since Russell,the Court in LaRue revisited language from Russell suggesting thatrelief is only available for breaches of fiduciary duty affecting theentire plan.79 Since Russell, defined contribution plans had replaceddefined benefit plans as the norm. 80 In light of this development, theCourt in LaRue held that "although § 502(a)(2) does not provide aremedy for individual injuries distinct from plan injuries, thatprovision does authorize recovery for fiduciary breaches that impairthe value of plan assets in a participant's individual account." 8' Asidefrom deciding that breaches affecting 401 (k) or other individual planparticipant accounts are remediable under § 502(a)(2), the Court alsoexpresses its understanding that claims for lost profits are cognizable

76. Id. at 362-63 (quoting Mid Atl. Med. Servs., LLC v. Sereboff, 407 F.3d 212, 218 (2005)).77. Posting of Colleen Medill to Workplace Prof Blog, Sereboff and the Future of ERISA Remedies,

http:/ilawprofessors.typepad.com/laborprof blog/2006/05/sereboff and th.htmi (July 26, 2009, 14:52EST). Medill acknowledges Sereboff managed to sidestep the more difficult issues confronted in Great-West and moved the Court's analysis away from focus on 18th century causes of action; however, sheconcludes that Sereboff may be more appropriately described as "subtle change" than "simplification."Id.

78. LaRue v. DeWolff, Boberg & Assocs., 128 S. Ct. 1020 (2008).79. Id. at 1022 (observing that although the language in Russell is consistent with the Fourth

Circuit's decision, the rationale in Russell is not).80. Id. at 1025. When ERISA was enacted and, later, when Russell was decided, most pension plans

were "defined benefit plans." Id. Since Russell, "defined contribution plans" have emerged as thedominate form of pension plan. Id. Under defined benefit plans, employees receive a definite sum ofmoney, usually determined by a formula factoring in yearly salary before retirement and number ofyears worked. Edward A. Zelinkski, The Defined Contribution Paradigm, 114 YALE L.J. 451, 455

(2004). Plan assets are usually maintained in a single account from which benefits are disbursed. Id. at456. On the other hand, defined contribution plans promise a certain contribution from an employer tothe participant's individual account. Id. at 455. Generally, participants make contributions and maymaintain control over management of the assets in their individual accounts. Id. at 457.

81. LaRue, 128 S. Ct. at 1026.

20101



plaintiff sought nothing more than recovery of "'specifically identifiable' funds ... 'within the possession and control of the Sereboff's,'" in other words a constructive trust or equitable lien on settlement proceeds, the plaintiff could recover under the "other appropriate equitable relief' provision of § 502(a)(3).76 The result was uncontroversial. In fact, shortly after announcing the decision in Sereboff, the Chief Justice touted it as a simplification of the law.77

6. LaRue v. DeWolff, Boberg & Associates, Inc. 7S

Recognizing fundamental changes in pension plans since Russell, the Court in LaRue revisited language from Russell suggesting that relief is only available for breaches of fiduciary duty affecting the entire plan.79 Since Russell, defined contribution plans had replaced defined benefit plans as the norm. so In light of this development, the Court in LaRue held that "although § 502(a)(2) does not provide a remedy for individual injuries distinct from plan injuries, that provision does authorize recovery for fiduciary breaches that impair the value of plan assets in a participant's individual account."SI Aside from deciding that breaches affecting 401(k) or other individual plan participant accounts are remediable under § 502(a)(2), the Court also expresses its understanding that claims for lost profits are cognizable

76. Id. at 362--{i3 (quoting Mid Atl. Med. Servs., LLC v. Sereboff, 407 F.3d 212, 21S (2005». 77. Posting of Colleen Medill to Workplace Prof Blog, Sereboff and the Future of ERISA Remedies,

http://lawprofessors.typepad.com/laborproCblog/2006/05/sereboff_and_th.html(July 26, 2009, 14:52 EST). Medill acknowledges Sereboffmanaged to sidestep the more difficult issues confronted in GreatWest and moved the Court's analysis away from focus on ISth century causes of action; however, she concludes that Sereboff may be more appropriately described as "subtle change" than "simplification." Id.

7S. LaRue v. DeWolff, Boberg & Assocs., 12S S. Ct. 1020 (200S). 79. Id. at 1022 (observing that although the language in Russell is consistent with the Fourth

Circuit's decision, the rationale in Russell is not). so. Id. at 1025. When ERISA was enacted and, later, when Russell was decided, most pension plans

were "defined benefit plans." Id. Since Russell, "defined contribution plans" have emerged as the dominate form of pension plan. Id. Under defmed benefit plans, employees receive a definite sum of money, usually determined by a formula factoring in yearly salary before retirement and number of years worked. Edward A. Zelinkski, The Defined Contribution Paradigm, 114 YALE L.J. 451, 455 (2004). Plan assets are usually maintained in a single account from which benefits are disbursed. Id. at 456. On the other hand, defined contribution plans promise a certain contribution from an employer to the participant's individual account. Id. at 455. Generally, participants make contributions and may maintain control over management of the assets in their individual accounts. Id. at 457.

SI. laRue, 12S S. Ct. at 1026.

11




under § 502(a)(2). 82 Interestingly, the Court relied on the commonlaw of trusts for this proposition, noting that § 409 closely resemblesthe Restatement of Trusts.83

Finally, concurring in judgment only, Justice Thomas, joined byJustice Scalia, argued that §§ 409 and 502(a)(2) unambiguously allowthe beneficiary of an individual account to recover for fiduciarybreach since the assets allocated to an individual account are planassets within the meaning of ERISA. s4

D. Seventh Amendment Right to a Jury Trial

The Constitution guarantees that "[i]n suits at common law, wherethe value in controversy shall exceed twenty dollars, the right of trialby jury shall be preserved. ,,85 The phrase "suits at common law"has consistently been interpreted as meaning "suits in which legalrights were to be ascertained and determined in contradistinction tothose where equitable rights alone were recognized, and equitableremedies were administered., 8 6 Nevertheless,

when Congress provides for enforcement of statutory rights in anordinary civil action in the district courts, where there isobviously no functional justification for denying the jury trialright, a jury trial must be available if the action involves rightsand remedies87 of the sort typically enforced in an action at law.88

82. Id. at 1024 n.4.83. Id. (citing RESTATEMENT (SECOND) OF TRUSTS § 205). Section 205 of the Restatement provides:

If the trustee commits a breach of trust, he is chargeable with (a) any loss or depreciationin value of the trust estate resulting from the breach of trust; or (b) any profit made byhim through the breach of trust; or (c) any profit which would have accrued to the trustestate if there had been no breach of trust.

84. LaRue, 128 S. Ct. at 1028-29.85. U.S. CONST. amend. VII.86. Granfinanciera, S.A. v. Nordberg, 492 U.S. 33, 41 (1989) (quoting Parsons v. Bedford,

Breedlove & Robeson, 28 U.S. (3 Pet.) 433 (1830) (Story, J.)).87. Interestingly, even if not controlling in the area of ERISA remedial provisions, the Court decided

that the claim at issue sought the legal remedy of money damages. Curtis v. Loether, 415 U.S. 189, 197(1974). However, the Court expressly declined to hold that all claims for monetary relief are necessarilylegal relief. Id. at 196. Nonetheless, the Court was willing to say that the right to a jury trial cannot bedenied by classifying legal relief sought as "incidental" to the equitable relief sought. Id. at 196 n.l 1.

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under § 502(a)(2).82 Interestingly, the Court relied on the common law of trusts for this proposition, noting that § 409 closely resembles h f · ~ t e Restatement 0 Trusts.

Finally, concurring in judgment only, Justice Thomas, joined by Justice Scalia, argued that §§ 409 and 502(a)(2) unambiguously allow the beneficiary of an individual account to recover for fiduciary breach since the assets allocated to an individual account are plan assets within the meaning of ERISA. 84

D. Seventh Amendment Right to a Jury Trial

The Constitution guarantees that "[i]n suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved .... ,,85 The phrase "suits at common law" has consistently been interpreted as meaning "suits in which legal rights were to be ascertained and determined in contradistinction to those where equitable rights alone were recognized, and equitable remedies were administered.,,86 Nevertheless,

when Congress provides for enforcement of statutory rights in an ordinary civil action in the district courts, where there is obviously no functional justification for denying the jury trial right, a jury trial must be available if the action involves rights and remedies87 of the sort typically enforced in an action at law.88

82. Id at 1024 nA. 83. Id. (citing RESTATEMENT (SECOND) OF TRUSTS § 205). Section 205 of the Restatement provides:

If the trustee commits a breach of trust, he is chargeable with (a) any loss or depreciation in value of the trust estate resulting from the breach of trust; or (b) any profit made by him through the breach of trust; or (c) any profit which would have accrued to the trust estate if there had been no breach of trust.

84. LaRue, 128 S. Ct. at 1028-29. 85. u.s. CONST. amend. YD. 86. Granfinanciera, SA v. Nordberg, 492 U.S. 33, 41 (1989) (quoting Parsons v. Bedford,

Breedlove & Robeson, 28 U.S. (3 Pet.) 433 (1830) (Story, J.». 87. Interestingly, even ifnot controlling in the area of ERISA remedial provisions, the Court decided

that the claim at issue sought the legal remedy of money damages. Curtis v. Loether, 415 U.S. 189, 197 (1974). However, the Court expressly declined to hold that all claims for monetary relief are necessarily legal relief. Id. at 196. Nonetheless, the Court was willing to say that the right to a jury trial cannot be denied by classifying legal relief sought as "incidental" to the equitable relief sought. Id. at 196 n.ll.

12




Thus, to determine whether the right to a jury trial attaches toparticular claims, the Court first compares the claim to 18th centuryactions brought before the merger of law and equity courts. It thendetermines whether the nature of the remedy sought is legal orequitable.89 The second inquiry is more important. 90 If, on balance,legal rights are at issue, the parties are entitled to a jury trial so longas there is no functional justification for denying the right.91

II. ANALYSIS

A. If Claim Is Legal Rather Than Equitable Under ERISA, PartiesHave a Right to Jury Trial

In Great-West, the Court announced that to determine whether aparticular claim under ERISA was legal or equitable, it wouldexamine the basis of the claim and the nature of the underlyingremedies sought. 92 The Court proceeded to analogize the claim atissue to 18th century causes of action93 and analyzed the nature ofremedy sought by reference to treatises on remedies. 94 Sereboff didnot change the test set forth in Great-West.95 Similarly, the

88. Id. at 195; see also Granfinanciera, 492 U.S. at 42 ("[T]he Seventh Amendment also applies toactions brought to enforce statutory rights that are analogous to common-law causes of action ordinarilydecided in English law courts in the late 18th century, as opposed to those customarily heard by courtsof equity or admiralty.").

89. Granfinanciera, 492 U.S. at 42.90. Id.91. Id. at 42-44; Curtis, 415 U.S. at 195; Parsons v. Bedford, Breedlove & Robeson, 28 U.S. (3 Pet.)

at 434; see also ABA SECTION OF LABOR AND EMPLOYMENT LAW, supra note 11, at 635-36; ERISAFIDUCIARY LAW, supra note 13, at 403.

92. Great-West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204, 213 (2002).93. Id. (analogizing the instant claim to the common law writ of assumpsit).94. Id. (observing the nature of the remedy is legal where the plaintiff sought to obtain a judgment

imposing personal liability on defendant for a sum of money).95. See Evan Schwartz & Michail Z. Hack, ERISA Litigation: Supreme Court Ruling Undermines

Jury Trial Ban, QuADRINO SCHWARTZ, NEWS AND UPDATES, June 15, 2006,http://www.disabilityinsurancelawyers.com/news/read/erisa-litigation-supreme-court-ruting-undermines-jury-trial-ban (writing after Sereboff and examining Second Circuit precedent in the wake ofGreat-West). If Sereboff had any impact on form of the Great- West rule, it would have been to convertthe balancing of the two general inquiries into a rigid test requiring the satisfaction of both prongs. SeeSereboff v. Mid Atd. Med. Servs., Inc., 547 U.S. 356, 363 (2006) ("While [plaintiffl's case forcharacterizing its relief as equitable does not falter because of the nature of the recovery it seeks,[plaintiff] must still establish that the basis for its claim is equitable."). Since it is possible that one prongweighs in favor of an equitable claim while the other prong weighs in favor of a legal remedy, see Bona

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Thus, to detennine whether the right to a jury trial attaches to particular claims, the Court fIrst compares the claim to 18th century actions brought before the merger of law and equity courts. It then detennines whether the nature of the remedy sought is legal or equitable.89 The second inquiry is more important.9o If, on balance, legal rights are at issue, the parties are entitled to a jury trial so long as there is no functional justifIcation for denying the right. 91

II. ANALYSIS

A. If Claim Is Legal Rather Than Equitable Under ERISA, Parties Have a Right to Jury Trial

In Great- West, the Court announced that to detennine whether a particular claim under ERISA was legal or equitable, it would examine the basis of the claim and the nature of the underlying remedies sought. 92 The Court proceeded to analogize the claim at issue to 18th century causes of action93 and analyzed the nature of remedy sought by reference to treatises on remedies.94 Sereboff did not change the test set forth in Great-West.95 Similarly, the

88. [d. at 195; see also Granfinanciera, 492 U.S. at 42 ("[T]he Seventh Amendment also applies to actions brought to enforce statutory rights that are analogous to common-law causes of action ordinarily decided in English law courts in the late 18th century, as opposed to those customarily heard by courts of equity or admiralty.").

89. Granfinanciera, 492 U.S. at 42. 90. [d. 91. [d. at 42-44; Curtis, 415 U.S. at 195; Parsons v. Bedford, Breedlove & Robeson, 28 U.S. (3 Pet.)

at 434; see also ABA SECfION OF LABOR AND EMPLOYMENT LAW, supra note II, at 635-36; ERISA FIDUCIARY LAW, supra note 13, at 403.

92. Great-West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204, 213 (2002). 93. [d. (analogizing the instant claim to the common law writ of assumpsit). 94. [d. (observing the nature of the remedy is legal where the plaintiff sought to obtain a judgment

imposing personal liability on defendant for a sum of money). 95. See Evan Schwartz & Michail Z. Hack, ERISA Litigation: Supreme Court Ruling Undermines

Jury Trial Ban, QUADRINO SCHWARTZ, NEWS AND UPDATES, June 15, 2006, http://www.disabilityinsurancelawyers.comlnewslreadlerisa-Iitigation-supreme-court-rulingundermines-jury-trial-ban (writing after Sereboff and examining Second Circuit precedent in the wake of Great-West). If Sereboffhad any impact on form of the Great-West rule, it would have been to convert the balancing of the two general inquiries into a rigid test requiring the satisfaction of both prongs. See Sereboff v. Mid Atl. Med. Servs., Inc., 547 U.S. 356, 363 (2006) ("While [plaintiff]'s case for characterizing its relief as equitable does not falter because of the nature of the recovery it seeks, [plaintiff] must still establish that the basis for its claim is equitable."). Since it is possible that one prong weighs in favor of an equitable claim while the other prong weighs in favor of a legal remedy, see Bona

13




constitutional question of whether the Seventh Amendment right to ajury trial is preserved with respect to a given claim depends on acomparison to 18th century causes of action and a determination ofwhether the remedy sought is legal or equitable in nature. 96 Indeed, itis entirely logical that the tests would be the same or substantially thesame since both tests are aimed at determining whether the right orremedy at issue is legal or equitable.97

Though the tests are almost identical on their faces, they arenevertheless applied differently in their respective contexts. First,Mertens holds that in determining whether a claim is equitable in thecontext of ERISA, courts should look to only "those categories ofrelief that were typically available in equity" rather than whateverrelief a plaintiff could receive in equity for a breach of fiduciaryduty.98 It is not clear that the Court has endorsed this approach whenapplying the Seventh Amendment test.99 Since breach of fiduciaryduty claims were brought in courts of equity, the first prong of theSeventh Amendment test will tilt toward an equitable remedy unlessthe Mertens rule applies to the Seventh Amendment test as well asthe ERISA remedy test. 00 Some federal district courts applying theSeventh Amendment test have held that although the claim soughtlegal relief, the first prong weighed against permitting a jury trialsince the relief for breach of fiduciary duty was historically availableonly at equity.10 1

v. Barasch, No. 01 Civ. 2289 (MBM), 2003 WL 1395932, at *12 ( S.D.N.Y. Mar. 20, 2003), and it isacademic that relief must be either equitable or legal, BLACK'S LAW DICTtONARY 1320 (8th ed. 2004)(defining "remedy" as "the means of enforcing a right or preventing or redressing a wrong; legal orequitable relief'), Sereboff must not have transformed the inquiry into a rigid test, which could result inrendering the remedy neither legal nor equitable. See Medill, supra note 77 (suggesting Sereboff onlyproduced a small change in the way the Court would apply the Great-West rule).

96. Granfinanciera, 492 U.S. at 42; Curtis, 415 U.S. at 195. The Court emphasizes that the nature ofthe remedy sought is the more important inquiry. Granfinanciera, 492 U.S. at 42.

97. Great-West, 534 U.S. at 212-13; Granfinanciera, 492 U.S. at 41; Curtis, 415 U.S. at 193.98. Mertens v. Hewitt Assocs., 508 U.S. 248,256 (1993).99. Granfinanciera, 492 U.S. at 43 (examining 18th century common law actions in bankruptcy

context to determine whether statutory bankruptcy claim was of the type that could have been brought atlaw prior to the merger).

100. See Mertens, 508 U.S. at 258 (recognizing that all relief was available in equity for a breach offiduciary duty).

101. Chao v. Meixner, No. 1:07-CV-0595-WSD, 2007 WL 4225069, at *3 (N.D. Ga. Nov. 27, 2007);Bona v. Barasch, No. 01 Civ. 2289(MBM), 2003 WL 1395932, at *35 (S.D.N.Y. Mar. 20,2003).

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constitutional question of whether the Seventh Amendment right to a jury trial is preserved with respect to a given claim depends on a comparison to 18th century causes of action and a determination of whether the remedy sought is legal or equitable in nature.96 Indeed, it is entirely logical that the tests would be the same or substantially the same since both tests are aimed at determining whether the right or remedy at issue is legal or equitable.97

Though the tests are almost identical on their faces, they are nevertheless applied differently in their respective contexts. First, Mertens holds that in determining whether a claim is equitable in the context of ERISA, courts should look to only "those categories of relief that were typically available in equity" rather than whatever relief a plaintiff could receive in equity for a breach of fiduciary duty.98 It is not clear that the Court has endorsed this approach when applying the Seventh Amendment test.99 Since breach of fiduciary duty claims were brought in courts of equity, the first prong of the Seventh Amendment test will tilt toward an equitable remedy unless the Mertens rule applies to the Seventh Amendment test as well as the ERISA remedy test. IOO Some federal district courts applying the Seventh Amendment test have held that although the claim sought legal relief, the first prong weighed against permitting a jury trial since the relief for breach of fiduciary duty was historically available only at equity. 101

v. Barasch, No. 01 Civ. 2289 (MBM), 2003 WL 1395932, at ·12 ( S.D.N.Y. Mar. 20, 2003), and it is academic that relief must be either equitable or legal, BLACK'S LAw DICTIONARY 1320 (8th ed. 2004) (defining "remedy" as "the means of enforcing a right or preventing or redressing a wrong; legal or equitable relief'), Sereboff must not have transformed the inquiry into a rigid test, which could result in rendering the remedy neither legal nor equitable. See Medill, supra note 77 (suggesting Sereboff only produced a small change in the way the Court would apply the Great-West rule).

96. Granfinanciera, 492 U.S. at 42; Curtis, 415 U.S. at 195. The Court emphasizes that the nature of the remedy sought is the more important inquiry. Granfinanciera, 492 U.S. at 42.

97. Great-West, 534 U.S. at 212-13; Granfinanciera, 492 U.S. at 41; Curtis, 415 U.S. at 193. 98. Mertens v. Hewitt Assocs., 508 U.S. 248, 256 (1993). 99. Granfinanciera, 492 U.S. at 43 (examining 18th century common law actions in bankruptcy

context to determine whether statutory bankruptcy claim was of the type that could have been broUght at law prior to the merger).

100. See Mertens, 508 U.S. at 258 (recognizing that all relief was available in equity for a breach of fiduciary duty).

101. Chao v. Meixner, No. 1:07-CV-0595-WSO, 2007 WL4225069, at·3 (N.D. Ga. Nov. 27, 2007); Bona v. Barasch, No. 01 Civ. 2289(MBM), 2003 WL 1395932, at ·35 (S.D.N.Y. Mar. 20, 2003).

14




Second, the Court has been explicit in holding the second prong ofthe Seventh Amendment is more important than the first,1°2 but hasnot been explicit in elevating the second inquiry over the first in thecontext of the ERISA remedy test.10 3 A possible explanation is thatthe application of the Mertens rule to the ERISA remedy test rendersthe two inquiries under the ERISA remedy test virtuallyindistinguishable.

Even if the tests are slightly different, it remains almostinconceivable that a court could determine that the relief sought islegal under ERISA but equitable under the Seventh Amendment. 10 4

Assuming the validity of that assertion, the central question iswhether a claim for legal relief is cognizable under §§ 409 and502(a)(2).

B. ERISA §§ 409 and 502(a)(2) Provide Legal Remedies for Breachof Fiduciary Duty

Section 502(a)(2) permits suits against fiduciaries for breaches oftheir duties to recover "appropriate" relief in light of liability createdfor breach of fiduciary duty under § 409.105 While § 409 createsliability for breaches causing loss to the plan, 10 6 the Court hasdefinitively held that losses to individual accounts in definedcontribution plans are remediable under § 502(a)(2).'1 7 Thus, anybeneficiary 10 8 who alleges a breach of fiduciary duty caused a loss in

102. Chauffers, Teamsters, and Helpers, Local No. 391 v. Terry, 494 U.S. 558, 565 (1990);Granfinanciera, 492 U.S. at 42.

103. Great-West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204, 213-16 (2002). Perhaps the

Court implicitly achieved this end in Sereboff when it made the second inquiry first and side-stepped the

more difficult issues presented by the first inquiry as applied in Great-West. See Medill, supra note 77.104. See Kusner, supra note 5, at 304 (hypothesizing that Mertens' recognition of legal remedies

under § 502(a)(2) may open the door to jury trials and encourage settlement by fiduciaries).105. 29 U.S.C. §§ 1109, 1132(a)(2) (2000); see Mertens, 508 U.S. at 252-53 (interpreting the

interplay between ERISA §§ 409 and 502(a)(2)).106. Mass. Mut. Life Ins. Co. v. Russell, 472 U.S. 134, 144 (1985); see LaRue v. DeWolff, Boberg &

Assocs., 128 S. Ct. 1020, 1026 (2008).107. LaRue, 128 S. Ct. at 1026.108. Section 502(a)(2) expressly permits suits for appropriate relief under § 409 "by the Secretary [of

Labor], or by a participant, beneficiary, or fiduciary." 29 U.S.C. § I 132(a)(2). In the context of losses to401(k) or other individual accounts under a defined contribution plan, the beneficiary is the most likely

plaintiff. See Meredith Z. Maresca, Litigation: ERISA Practitioner Says LaRue Will Give Rise toMisrepresentation Claims in Lower Courts, PENSION & BENEFrrS DAiLY LEGAL NEWS, Oct. 3, 2008.

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Second, the Court has been explicit in holding the second prong of the Seventh Amendment is more important than the first,102 but has not been explicit in elevating the second inquiry over the first in the context of the ERISA remedy test.103 A possible explanation is that the application of the Mertens rule to the ERISA remedy test renders the two inquiries under the ERISA remedy test virtually indistinguishable.

Even if the tests are slightly different, it remains almost inconceivable that a court could determine that the relief sought is legal under ERISA but equitable under the Seventh Amendment. 104

Assuming the validity of that assertion, the central question is whether a claim for legal relief is cognizable under §§ 409 and 502(a)(2).

B. ERISA §§ 409 and 502 (a) (2) Provide Legal Remedies/or Breach 0/ Fiduciary Duty

Section 502(a)(2) permits suits against fiduciaries for breaches of their duties to recover "appropriate" relief in light of liability created for breach of fiduciary duty under § 409. 105 While § 409 creates liability for breaches causing loss to the plan,106 the Court has definitively held that losses to individual accounts in defined contribution plans are remediable under § 502(a)(2).107 Thus, any beneficiaryl08 who alleges a breach of fiduciary duty caused a loss in

102. Chauffers, Teamsters, and Helpers, Local No. 391 v. Terry, 494 U.S. 558, 565 (1990); Granfinanciera, 492 U.s. at 42. 103. Great-West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204, 213-16 (2002). Perhaps the

Court implicitly achieved this end in Sereboffwhen it made the second inquiry first and side-stepped the more difficult issues presented by the first inquiry as applied in Great-West. See Medill, supra note 77.

104. See Kusner, supra note 5, at 304 (hypothesizing that Mertens' recognition of legal remedies under § 502(a)(2) may open the door to jury trials and encourage settlement by fiduciaries).

105. 29 U.S.C. §§ 11 09, 1132(a)(2) (2000); see Mertens, 508 U.S. at 252-53 (interpreting the interplay between ERISA §§ 409 and 502(a)(2».

106. Mass. Mut. Life Ins. Co. v. Russell, 472 U.s. 134, 144 (1985); see LaRue v. DeWolff, Boberg & Assocs., 128 S. Ct. 1020, 1026 (2008).

107. LaRue, 128 S. Ct. at 1026. 108. Section 502(a)(2) expressly permits suits for appropriate relief under § 409 "by the Secretary [of

Labor], or by a participant, beneficiary, or fiduciary." 29 U.S.C. § I 132(a)(2). In the context oflosses to 401(k) or other individual accounts under a defined contribution plan, the beneficiary is the most likely plaintiff. See Meredith Z. Maresca, Litigation: ERISA Practitioner Says LaRue Will Give Rise to Misrepresentation Claims in Lawer Courts, PENSION & BENEFITS DAILY LEGAL NEWS, Oct. 3, 2008.

15




value of his 401(k) plan can state a claim under § 502(a)(2) for thetype of relief provided in § 409.109 The Supreme Court has notdecided a case that turned on whether legal remedies are availableunder §§ 409 and 502(a)(2), but the Court has made relevantobservations about the types of remedies available under thosesections. Most importantly, the Court has said that punitive andextracontractual damages are not available to a beneficiary," l0

fiduciaries are personally liable for damages-"the classic form oflegal relief,""' Congress's distinction between equitable andremedial relief must be accorded meaning,1 12 and claims for lostprofits are cognizable." 3

1. Punitive and Extracontractual Damages Are Not Available

The Court held that beneficiaries or participants could not recoverpunitive or extracontractual damages under § 502(a)(2), but explicitlyleft unanswered the question of whether a fiduciary or the Secretaryof Labor could recover such damages on behalf of the plan.1 4 LaRuesuggests the proper question under § 409 is whether the breach hascaused the beneficiary to receive a lesser benefit than he would havereceived absent the breach. 15 LaRue, however, does not overruleRussell; thus, punitive and extracontractual damages remainunavailable to participants and beneficiaries."16 In order forfiduciaries to ever be liable for punitive and extracontractual

109. See LaRue, 128 S. Ct. at 1024 n.4 (declaring that claims for lost profits are cognizable under§ 502(a)(2)); see also Mertens, 508 U.S. at 252 (defining the types of personal liability of fiduciariesoutlined in § 409).

110. Russell, 473 U.S. at 144.111. Mertens, 508 U.S. at 253, 256.112. Great-West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204,210 (2002); Mertens, 508 U.S. at

259 n.8.113. LaRue, 128 S. Ct. at 1024 n.4.114. Russell, 473 U.S. at 144 n.12; see also LaRue, 128 S. Ct. at 1024 (explaining the holding in

Russell as being based on the conclusion that the misconduct alleged did not "relate to the propermanagement, administration, and investment of fund assets, with an eye toward ensuring that thebenefits authorized by the plan are ultimately paid to participants and beneficiaries").

115. LaRue, 128 S. Ct. at 1025-26 (explaining that fiduciary breach need not compromise the entireplan value in order to decrease the value of benefits available to a beneficiary in a defined contributionplan, and holding that § 502(a)(2) "authorize[s] recovery for fiduciary breaches that impair the value ofplan assets in a participant's individual account").

116. Id. at 1024.

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value of his 401(k) plan can state a claim under § 502(a)(2) for the type of relief provided in § 409.109 The Supreme Court has not decided a case that turned on whether legal remedies are available under §§ 409 and 502(a)(2), but the Court has made relevant observations about the types of remedies available under those sections. Most importantly, the Court has said that punitive and extracontractual damages are not available to a beneficiary, I 10 fiduciaries are personally liable for damages-"the classic form of legal relief,,,lll Congress's distinction between equitable and remedial relief must be accorded meaning,112 and claims for lost profits are cognizable. I 13

1. Punitive and Extracontractual Damages Are Not Available

The Court held that beneficiaries or participants could not recover punitive or extracontractual damages under § 502(a)(2), but explicitly left unanswered the question of whether a fiduciary or the Secretary of Labor could recover such damages on behalf of the plan. 114 LaRue suggests the proper question under § 409 is whether the breach has caused the beneficiary to receive a lesser benefit than he would have received absent the breach.115 LaRue, however, does not overrule Russell; thus, punitive and extracontractual damages remain unavailable to participants and beneficiaries. I 16 In order for fiduciaries to ever be liable for punitive and extracontractual

109. See laRue, 128 S. Ct. at 1024 n.4 (declaring that claims for lost profits are cognizable under § 502(a)(2»; see also Mertens, 508 U.S. at 252 (defining the types of personal liability of fiduciaries outlined in § 409).

110. Russell, 473 U.S. at 144. III. Mertens, 508 U.S. at 253, 256. 112. Great-West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204, 210 (2002); Mertens, 508 U.S. at

259n.8. 113. laRue, 128 S. Ct. at 1024 n.4. 114. Russell, 473 U.S. at 144 n.l2; see also LaRue, 128 S. Ct. at 1024 (explaining the holding in

Russell as being based on the conclusion that the misconduct alleged did not "relate to the proper management, administration, and investment of fund assets, with an eye toward ensuring that the benefits authorized by the plan are ultimately paid to participants and beneficiaries").

115. laRue, 128 S. Ct. at 1025-26 (explaining that fiduciary breach need not compromise the entire plan value in order to decrease the value of benefits available to a beneficiary in a defined contribution plan, and holding that § 502(a)(2) "authorize[s] recovery for fiduciary breaches that impair the value of plan assets in a participant's individual account").

116. [d. at 1024.

16




damages, presumably the situation would have to be such thatwithout their recovery beneficiaries would not receive "the benefitsauthorized by the plan.""' 7

2. Congress's Distinction Between Equitable and Remedial ReliefIs Meaningful

Justice White, dissenting in Mertens, vigorously argues it isimpossible to take anything away from the apparent distinctionbetween "equitable" and "remedial" relief in § 409.118 Since"remedial" means "intended as a remedy" and "relief' is a synonymfor "remedy," remedial relief is a hopeless redundancy. 119 JusticeScalia responded to Justice White's lamentation, but while agreeingthat the distinction is "artless" Justice Scalia nevertheless concludedthat the distinction, plainly made in the text of § 409, must not beignored.120 Specifically, Justice Scalia wrote that equitable relief mustmean something less than all relief.12 1 However, in regards to thequestion whether § 409 creates legal remedies, the meaning ofremedial relief in that context is more interesting. Presumably, in thephrase "such other equitable or remedial relief,"'122 "remedial" meansrelief that is legal rather than equitable. 123

Assuming ERISA distinguishes between equitable and remedial, 124

giving effect to that distinction requires recognition that § 409 createsremedies beyond equitable ones. The term "remedial relief' appearsto have originated in the idea that courts of equity were empoweredto fashion whatever remedy necessary to afford litigants in equity

117. Id.; see also Russell, 473 U.S. at 142.118. Mertens v. Hewitt Assocs., 508 U.S. 248, 269 n.4 (1993) (White, J., dissenting).119. Id.120. Id. at 259 n.8 (majority opinion).121. Id.122. 29 U.S.C. § 1109(a) (2000).123. See Chao v. Meixner, No. 1:07-CV-0595-WSD, 2007 WL 4225069, at *2 (N.D. Ga. Nov. 27,

2007) (finding that causes of action under § 502(aX2) may arise at law based in part on Mertens'slanguage giving effect to ERISA's distinctions between equitable and remedial relief).

124. The full Mertens Court apparently agreed that the text of § 409 creates a distinction betweenequitable and remedial. See Mertens, 508 U.S. at 270 n.4 (White, J., dissenting). The dissent argues thatbecause Congress did not carefully differentiate and failed to communicate any "limiting principle," thedistinction is meaningless. Id.

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damages, presumably the situation would have to be such that without their recovery beneficiaries would not receive "the benefits authorized by the plan.,,117

2. Congress's Distinction Between Equitable and Remedial Relief Is Meaningful

Justice White, dissenting in Mertens, vigorously argues it is impossible to take anything away from the apparent distinction between "equitable" and "remedial" relief in § 409. 11S Since "remedial" means "intended as a remedy" and "relief' is a synonym for "remedy," remedial relief is a hopeless redundancy.119 Justice Scalia responded to Justice White's lamentation, but while agreeing that the distinction is "artless" Justice Scalia nevertheless concluded that the distinction, plainly made in the text of § 409, must not be ignored.120 Specifically, Justice Scalia wrote that equitable relief must mean something less than all relief. l2l However, in regards to the question whether § 409 creates legal remedies, the meaning of remedial relief in that context is more interesting. Presumably, in the phrase "such other equitable or remedial relief,,,122 "remedial" means relief that is legal rather than equitable. 123

Assuming ERISA distinguishes between equitable and remedial, 124 giving effect to that distinction requires recognition that § 409 creates remedies beyond equitable ones. The term "remedial relief' appears to have originated in the idea that courts of equity were empowered to fashion whatever remedy necessary to afford litigants in equity

117. [d.; see also Russell, 473 U.S. at 142. lIS. Mertens v. Hewitt Assocs., 50S U.S. 24S, 269 n.4 (1993) (White, 1., dissenting). 119. [d. 120. [d. at 259 n.S (majority opinion). 121. [d. 122. 29 U.S.C. § 1100(a) (2000). 123. See Chao v. Meixner, No. 1:07-CV-0595-WSD, 2007 WL 4225069, at *2 (N.D. Ga. Nov. 27,

2007) (finding that causes of action under § 502(a)(2) may arise at law based in part on Mertens's language giving effect to ERISA's distinctions between equitable and remedial relief).

124. The full Mertens Court apparently agreed that the text of § 409 creates a distinction between equitable and remedial. See Mertens, 50S U.S. at 270 n.4 (White, J., dissenting). The dissent argues that because Congress did not carefully differentiate and failed to communicate any "limiting principle," the distinction is meaningless. Jd.

17




appropriate relief for harms suffered. 125 However, under Mertens,such remedies that may be granted by a court of equity in a particularcase are nonetheless legal remedies to the extent they are nottypically available in equity.' 26

3. The Classic Form of Legal Relief Is Available

Damages are clearly available under ERISA. 127 The rationale inMertens and Great-West establishes that damages are legal ratherthan equitable. 128 The Court decided in Mertens that equitable reliefmeans relief typically available in a court of equity without referenceto the "particular case at issue."'1 29 Thus, the fact that before themerger of law and equity courts, remedies for breach of fiduciaryduty were available exclusively at equity does not render thoseremedies equitable.' 30 Rather, "whether [a remedy] is legal orequitable depends on 'the basis for the plaintiff's claim' and thenature of the underlying remedies sought."'131 Yet it is not apparentwhat weight is accorded to "the basis for the plaintiffs claim,"'132 norhow that inquiry differs from the rejected inquiry into whether theremedy was available at equity in the "particular case at issue. ' 33

125. See Gompers v. Buck's Stove & Range Co., 221 U.S. 418, 444, 449 (1911) (indicating that"remedial relief' means relief delivered by a court of equity).

126. Mertens, 508 U.S. at 257.127. Id. at 252 (relying on language in § 409 making a breaching fiduciary "personally liable to make

good to [the] plan any losses to the plan resulting from each such breach"); see also LaRue v. DeWolff,Boberg & Assocs., 128 S. Ct. 1020, 1024 n.4 (2008) (asserting that § 502(a)(2) provides relief for lossessuffered because assets that should have been sold declined in value or assets that should have been, butwere not, purchased increased in value).

128. Great-West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204, 210 (2002); Mertens, 508 U.S. at256-59.

129. Mertens, 508 U.S. at 257-58 ("Since all relief available for breach of trust could be obtainedfrom a court of equity, limiting the sort of relief obtainable under § 502(a)(3) to 'equitable relief' in thesense of 'whatever relief a common-law court of equity could provide in such a case' would limit therelief not at all.").

130. Great-West, 534 U.S. at 221.131. Id. at 213 (citing Reich v. Cont'l Cas. Co., 33 F.3d 754, 756 (7th Cir. 1994) (Posner, J.)).132. Great-West, 534 U.S. at 205, 224 (Ginsburg, J., dissenting) (asserting that the majority decides

the remedy sought is equitable by reference merely to the technical requirements of the claim honoredprior to the merger).

133. Mertens, 508 U.S. at 256.

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988 GEORGIA STATE UNIVERSITY LAW REVIEW IVol. 26:3

appropriate relief for harms suffered. I25 However, under Mertens, such remedies that may be granted by a court of equity in a particular case are nonetheless legal remedies to the extent they are not typically available in equity. 126

3. The Classic Form of Legal Relief Is Available

Damages are clearly available under ERISA. 127 The rationale in Mertens and Great- West establishes that damages are legal rather than equitable. 128 The Court decided in Mertens that equitable relief means relief typically available in a court of equity without reference to the "particular case at issue.,,129 Thus, the fact that before the merger of law and equity courts, remedies for breach of fiduciary duty were available exclusively at equity does not render those remedies equitable. 13o Rather, "whether [a remedy] is legal or equitable depends on 'the basis for the plaintiff's claim' and the nature of the underlying remedies sought."l3l Yet it is not apparent what weight is accorded to "the basis for the plaintiff's claim,,,132 nor how that inquiry differs from the rejected inquiry into whether the remedy was available at equity in the "particular case at issue.,,133

125. See Gompers v. Buck's Stove & Range Co., 221 U.S. 418, 444, 449 (1911) (indicating that "remedial relief' means relief delivered by a court of equity).

126. Mertens, 508 U.S. at 257. 127. Id. at 252 (relying on language in § 409 making a breaching fiduciary ''personally liable to make

good to [the] plan any losses to the plan resulting from each such breach"); see also LaRue v. DeWolff, Boberg & Assocs., 128 S. Ct. 1020, 1024 n.4 (2008) (asserting that § 502(a)(2) provides relieffor losses suffered because assets that should have been sold declined in value or assets that should have been, but were not, purchased increased in value). 128. Great-West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204, 210 (2002); Mertens, 508 U.S. at

256-59. 129. Mertens, 508 U.S. at 257-58 ("Since all relief available for breach of trust could be obtained

from a court of equity, limiting the sort of relief obtainable under § 502(a)(3) to 'equitable relief in the sense of 'whatever relief a common-law court of equity could provide in such a case' would limit the relief not at all.").

130. Great-West, 534 U.S. at 221. 131. Id. at 213 (citing Reich v. Cont'l Cas. Co., 33 F.3d 754, 756 (7th Cir. 1994) (posner, l.». 132. Great-West, 534 U.S. at 205,224 (Ginsburg, l., dissenting) (asserting that the majority decides

the remedy sought is equitable by reference merely to the technical requirements of the claim honored prior to the merger).

133. Mertens, 508 U.S. at 256.

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Nevertheless, damages are available, and they are not equitablewithin the meaning of ERISA.'3 4

4. Claims for Lost Profits Are Cognizable

A fiduciary is liable for losses resulting from a breach of duty notonly where the breach causes a decrease in assets, but also where thebreach prevents the plan from realizing an increase in assets. 135 Suchlost profits are consequential damages, a clear form of legal ratherthan equitable relief.136 However, LaRue relies on the Restatement(Second) of Trusts for the proposition that lost profits arerecoverable. 137 The Restatement declares that such remedy, thoughavailable, is equitable rather than legal. 138 Perhaps this conflictbetween "standard current works" epitomizes Justice Ginsburg'sconcerns with Great- West's reliance on secondary sources todetermine whether a particular remedy is legal or equitable innature. 139 Examination of the "standard current works" thus requiresgreater attention.

134. Great-West, 534 U.S. at 214. The entire Court in Great West believed that compensatorydamages are not equitable relief, including the dissent. See id. at 234 (Ginsburg, J., dissenting)(declaring that she would hold compensatory damages were not within the ambit of "equitable relief'under ERISA).

135. LaRue v. DeWolff, Boberg & Assocs., Inc., 128 S. Ct. 1020, 1024 n.4 (2008).136. DAN B. DOBBS, LAW OF REMEDIES: DAMAGEs-EQuITY-RESTITUTION § 3.3(3) (2d ed., 1992).137. LaRue, 128 S. Ct. at 1024 n.4.138. RESTATEMENT (SECOND) OF TRUSTS §§ 197-98 (asserting that the remedies of the beneficiary

against the trustee are exclusively equitable except where the trustee fails to convey money or a chattelto the trustee despite an immediate and unconditional duty to do so). The exception to the exclusivelyequitable nature of remedies under the common law of trusts applies only to instances in which equitableremedies have become matured legal obligations. Langbein, supra note 2, at 1317 n. 11. But see DOBBS,supra note 136, at 163 (stating plaintiff seeking to recover a fixed sum of money has remedy at law(citing RESTATEMENT (SECOND) OF TRUSTS §§ 197-98)).

139. Great-West, 534 U.S. at 232 (Ginsburg, J., dissenting) (questioning the majority's "confidence inthe ability of the standard current works to make the answer clear," and observing the Court provides nodirection for resolution of conflicts between such works). Justice Ginsburg is reacting to the majority'sassertion that "[riarely will there be need for any more antiquarian inquiry' . . . than consulting . . .standard current works such as Dobbs, Palmer, Corbin, and the Restatements, which make the answer

clear. " Id. at 217 (majority opinion).

20l1



Nevertheless, damages are available, and they are not equitable within the meaning of ERISA. 134

4. Claims for Lost Profits Are Cognizable

A fiduciary is liable for losses resulting from a breach of duty not only where the breach causes a decrease in assets, but also where the breach prevents the plan from realizing an increase in assets. 135 Such lost profits are consequential damages, a clear form of legal rather than equitable relief. 136 However, LaRue relies on the Restatement (Second) of Trusts for the proposition that lost profits are recoverable. 137 The Restatement declares that such remedy, though available, is equitable rather than legal. 138 Perhaps this conflict between "standard current works" epitomizes Justice Ginsburg's concerns with Great-West's reliance on secondary sources to determine whether a particular remedy is legal or equitable in nature. 139 Examination of the "standard current works" thus requires greater attention.

134. Great-West, 534 U.S. at 214. The entire Court in Great West believed that compensatory damages are not equitable relief, including the dissent. See id. at 234 (Ginsburg, J., dissenting) (declaring that she would hold compensatory damages were not within the ambit of "equitable relief' under ERISA).

135. laRue v. DeWolff, Boberg & Assocs., Inc., 128 S. Ct. 1020, 1024 n.4 (2008). 136. DAN B. DOBBS, LAW OF REMEDIES: DAMAGES-EQUITY-RESTITUTION § 3.3(3) (2d ed., 1992). 137. LaRue, 128 S. Ct. at 1024 n.4. 138. RESTATEMENT (SECOND) OF TRUSTS §§ 197-98 (asserting that the remedies of the beneficiary

against the trustee are exclusively equitable except where the trustee fails to convey money or a chattel to the trustee despite an immediate and unconditional duty to do so). The exception to the exclusively equitable nature of remedies under the common law of trusts applies only to instances in which equitable remedies have become matured legal obligations. Langbein, supra note 2, at 1317 n.ll. But see DOBBS, supra note 136, at 163 (stating plaintiff seeking to recover a fIXed sum of money has remedy at law (citing RESTATEMENT (SECOND) OF TRUSTS §§ 197-98)).

139. Great-West, 534 U.S. at 232 (Ginsburg, J., dissenting) (questioning the majority's "confidence in the ability of the standard current works to make the answer clear," and observing the Court provides no direction for resolution of conflicts between such works). Justice Ginsburg is reacting to the majority's assertion that "[r]arely will there be need for any more antiquarian inquiry' ... than consulting ... standard current works such as Dobbs, Palmer, Corbin, and the Restatements, which make the answer clear. " !d. at 217 (majority opinion).

19




C. Standard Current Works Are Not Definitive of Nature ofRemedies

Great-West teaches that determining the nature of the remedysought usually involves nothing more than consultation of the"standard current works.' 40 The standard current works give a ratheremphatic answer to the question whether remedies for breach offiduciary duty are legal or equitable-they are historically,substantively, and exclusively equitable. 141 Yet, the Court explicitlyrejected that question, 142 instead inquiring into the nature of theremedy without reference to the particular case at issue. 143 Thus, DanDobbs' admonition that although fiduciary cases are "historically andsubstantively" equitable they may be legal with respect to the natureof the remedy' 44 is of great significance under the Court'sapproach. 1

45

The fact that damages are "the classic form of legal relief ' 146 isconfirmed by treatises, 147 but perhaps provides a false resolution.Money awards other than restitution148 may be ordered pursuant toequitable powers. 14 9 Equitable money awards are distinguishedthrough means of enforcement. 15° Damages are enforceable byseizure of property, whereas equitable awards are enforceable by thecourts' contempt powers.15' Thus, the imposition of personal liabilityon the fiduciary without reference to the source of liability is notindicative of whether the remedy is legal or equitable. In practical

140. Id.141. RESTATEMENT (SECOND) OF TRUSTS § 197; DOBBS, supra note 136, at 163.

142. Mertens v. Hewitt Assocs., 508 U.S. 248, 256-58 (1993).143. Great-West, 534 U.S. at 213; Mertens, 508 U.S. at 256-58.144. DOBBS, supra note 136, at 163.145. The majority opinion cites Dobbs seven times. See Great-West, 534 U.S. 204.146. E.g., Mertens, 508 U.S. at 255.147. E.g., DOBBS, supra note 136, at 3.148. Restitution can be equitable or legal. Great-West, 534 U.S. at 213. The contours of restitution are

important to discerning the Court's approach defining a remedy as equitable or legal, but it is of littleconsequence that restitution may be equitable. The important question is whether legal restitution iscontemplated by § 409, not whether equitable restitution is contemplated as well. Section 409unequivocally contemplates equitable remedies for which parties would not be entitled to a jury trial.

149. DOBBS, supra note 136, at 278.150. Id. at 278-79.151. Id.

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990 GEORGIA STATE UNIVERSITY LAW REVIEW

C. Standard Current Works Are Not Definitive o/Nature 0/ Remedies

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Great-West teaches that detennining the nature of the remedy sought usually involves nothing more than consultation of the "standard current works.,,140 The standard current works give a rather emphatic answer to the question whether remedies for breach of fiduciary duty are legal or equitable-they are historically, substantively, and exclusively equitable. 141 Yet, the Court explicitly rejected that question,142 instead inquiring into the nature of the remedy without reference to the particular case at issue. 143 Thus, Dan Dobbs' admonition that although fiduciary cases are "historically and substantively" equitable they may be legal with respect to the nature of the remedyl44 is of great significance under the Court's approach. 145

The fact that damages are "the classic fonn of legal relief,146 is confirmed by treatises,147 but perhaps provides a false resolution. Money awards other than restitutionl48 may be ordered pursuant to equitable powers. 149 Equitable money awards are distinguished through means of enforcement. 150 Damages are enforceable by seizure of property, whereas equitable awards are enforceable by the courts' contempt powers. 151 Thus, the imposition of personal liability on the fiduciary without reference to the source of liability is not indicative of whether the remedy is legal or equitable. In practical

140. Id. 141. REsTATEMENT (SECOND) OF TRUSTS § 197; DOBBS,supra note 136, at 163. 142. Mertens v. Hewitt Assocs., 508 U.s. 248, 256-58 (1993). 143. Great-West, 534 U.S. at 213; Mertens, 508 U.S. at 256-58. 144. DOBBS, supra note 136, at 163. 145. The majority opinion cites Dobbs seven times. See Great-West, 534 U.S. 204. 146. E.g., Mertens, 508 U.S. at 255. 147. E.g., DOBBS,supra note 136, at 3. 148. Restitution can be equitable or legal. Great-West, 534 U.S. at 213. The contours of restitution are

important to discerning the Court's approach defining a remedy as equitable or legal, but it is of little consequence that restitution may be equitable. The important question is whether legal restitution is contemplated by § 409, not whether equitable restitution is contemplated as well. Section 409 unequivocally contemplates equitable remedies for which parties would not be entitled to a jury trial.

149. DoBBS, supra note 136, at 278. 150. Id. at 278-79. 151. Id.

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terms, the purpose of damages is to put the party injured by breach inthe position he would have occupied under full performance withouta breach of duty, whereas the purpose of restitution is to restore theinjured party to the position he occupied before the breach. 152 Corbin,like Dobbs, recognizes that restitution may be legal or equitable. 153

Corbin does not expressly differentiate between pre-merger causes of

action for restitution. 154

Personal liability is imposed "to make good to such plan any lossesto the plan resulting from each [fiduciary] breach" (damages liabilityclause) and "to restore to such plan any profits of such fiduciarywhich have been made through use of assets of the plan by thefiduciary" (restitutionary liability clause). 155 ERISA's damagesliability clause may encompass equitable money awards, but it clearlycontemplates compensatory monetary relief traditionally available ina court of law.' 56 The damages liability clause is broad enough toinclude monetary relief to compensate for such losses, putting theparticipant or beneficiary in the position he would have occupied ifthe fiduciary had rendered performance without a breach of duty.1 57

Indeed, damages for lost profits are available. 158 Claims for lost

profits are clearly within the paradigm of damages, and thereforeseek legal rather than equitable relief. 159

D. The Question of Whether Legal Relief Is Available Divides LowerCourts

Among courts that have considered whether a claim under§ 502(a)(2) seeks a legal remedy entitling the parties to a jury trial,the weight of authority holds that no right to trial by jury applies to

152. ARTHUR L. CORBIN, CORBIN ON CONTRACTS § 1102 (1993).

153. Id.154. Id.155. 29 U.S.C. § 1109(a) (2000); see also Mertens v. Hewitt Assocs., 508 U.S. 248, 252 (1993).156. See DOBBS, supra note 136, at 3, 163.157. See CORBIN, supra note 152, § 1102.158. LaRue v. DeWolff, Boberg & Assocs., Inc., 128 S. Ct. 1020, 1024 n.4 (2008).

159. See DOBBS, supra note 136, § 3.3(3). The broad admonition that remedies for breach of fiduciary

duty are equitable remedies, RESTATEMENT (SECOND) OF TRUSTS § 197, is not to the contrary since

Mertens rejects an answer based on the type of relief that a court could provide in a particular case.Mertens, 508 U.S. at 257-58.

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terms, the purpose of damages is to put the party injured by breach in the position he would have occupied under full performance without a breach of duty, whereas the purpose of restitution is to restore the injured party to the position he occupied before the breach. ls2 Corbin, like Dobbs, recognizes that restitution may be legal or equitable. ls3

Corbin does not expressly differentiate between pre-merger causes of action for restitution. ls4

Personal liability is imposed "to make good to such plan any losses to the plan resulting from each [fiduciary] breach" (damages liability clause) and "to restore to such plan any profits of such fiduciary which have been made through use of assets of the plan by the fiduciary" (restitutionary liability clause). ISS ERISA's damages liability clause may encompass equitable money awards, but it clearly contemplates compensatory monetary relief traditionally available in a court of law. 156 The damages liability clause is broad enough to include monetary relief to compensate for such losses, putting the participant or beneficiary in the position he would have occupied if the fiduciary had rendered performance without a breach of duty. 157 Indeed, damages for lost profits are available. 158 Claims for lost profits are clearly within the paradigm of damages, and therefore seek legal rather than equitable relief. 159

D. The Question of Whether Legal Relief Is Available Divides Lower Courts

Among courts that have considered whether a claim under § 502(a)(2) seeks a legal remedy entitling the parties to a jury trial, the weight of authority holds that no right to trial by jury applies to

IS2. ARTHUR L CORBIN, CORBIN ON CONTRACTS § 1102 (1993). IS3. Id. IS4. /d. ISS. 29 U.s.C. § 1109(a) (2000); see also Mertens v. Hewitt Assocs., 508 U.S. 248, 252 (1993). 156. See DOBBS, supra note 136, at 3, 163. 157. See CORBIN, supra note 152, § 1102. 158. LaRue v. DeWolff, Boberg & Assocs., Inc., 128 S. Ct. 1020, 1024 n.4 (2008). 159. See DOBBS, supra note 136, § 3.3(3). The broad admonition that remedies for breach of fiduciary

duty are equitable remedies, RESTATEMENT (SECOND) OF TRUSTS § 197, is not to the contrary since Mertens rejects an answer based on the type of relief that a court could provide in a particular case. Mertens, 508 U.S. at 257-58.

21




actions for breach of fiduciary duty. 160 Nonetheless, some courts havedetermined that the right to trial by jury is preserved at least withrespect to some claims cognizable under § 502(a)(2). 16' Courtsstriking jury trial demands have generally pointed to the inherentlyequitable nature of actions for breach of fiduciary duty,162 while thoserecognizing the jury trial right have focused on the compensatorydamages remedy sought by plaintiffs. 163

1. Breach of Fiduciary Duty Is Inherently Equitable in Nature

Most courts that have considered whether parties are entitled to ajury trial for breach of fiduciary duty under § 409 have concludedthat no right to trial by jury exists since the claim is historically andinherently equitable in nature.' 64 ERISA was drafted against thebackdrop of the common law of trusts, 165 so courts may look to thecommon law of trusts to fill gaps in the statute. 166 Thus, it is logicalto look to the common law of trusts given ERISA's silence onavailability of jury trials. 167 The results of this inquiry weigh againstpermitting a jury trial because remedies for breach of fiduciary dutywere both completely and exclusively available in courts of equity.' 68

Yet, Mertens rejected this inquiry when it concluded that equitableremedies were those typically available in equity rather than thosethat courts of equity were empowered to provide in a particular type

160. E.g., Abbott v. Lockheed Martin Corp., No. 06-CV-0701-MJR, 2007 WL 2316481, at *3 (S.D.Ill. Aug. 13, 2007).

161. E.g., Chao v. Meixner, No. 1:07-CV-0595-WSD, 2007 WL 4225069, at *5 (N.D. Ga. Nov. 27,2007).

162. E.g., Abbott, 2007 WL 2316481, at *2 (holding that ERISA claims have no antecedent incommon law and analogous actions at common law were equitable).

163. E.g., Meixner, 2007 WL 4225069, at *3 (reasoning that monetary relief for losses to compensatethe plan is an action for damages, which is legal relief).

164. Abbott, 2007 WL 2316481, at *2; Spano v. Boeing Co., No. 06-CV-743-DRH, 2007 WL1149192, at *8 (S.D. Ill. Apr. 18, 2007); Broadnax Mills, Inc. v. Blue Cross & Blue Shield of Va., 876F. Supp. 809, 816 (E.D. Va. 1995).

165. Spano, 2007 WL 1149192, at *5.166. Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 109-10 (1989).167. See Meixner, 2007 WL 4225069, at *3; Abbott, 2007 WL 2316481, at *2; Spano, 2007 WL

1149192, at *4-5, 7-8; Bona v. Barasch, No. 01 Civ. 2289 (MBM), 2003 WL 1395932, at *35(S.D.N.Y. Mar. 20, 2003); Broadnax Mills, 876 F. Supp. at 816-17.

168. Meixner, 2007 WL 4225069, at *3; Abbott, 2007 WL 2316481, at *2; Spano, 2007 WL 1149192,at *4-5, 7-8; Bona, 2003 WL 1395932, at *35; Broadnax Mills, 876 F. Supp. at 816-17.

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actions for breach of fiduciary duty. 160 Nonetheless, some courts have determined that the right to trial by jury is preserved at least with respect to some claims cognizable under § 502(a)(2).161 Courts striking jury trial demands have generally pointed to the inherently equitable nature of actions for breach of fiduciary duty,162 while those recognizing the jury trial right have focused on the compensatory damages remedy sought by plaintiffs. 163

1. Breach o/Fiduciary Duty Is Inherently Equitable in Nature

Most courts that have considered whether parties are entitled to a jury trial for breach of fiduciary duty under § 409 have concluded that no right to trial by jury exists since the claim is historically and inherently equitable in nature. l64 ERISA was drafted against the backdrop of the common law of trustS/ 65 so courts may look to the common law of trusts to fill gaps in the statute. 166 Thus, it is logical to look to the common law of trusts given ERISA's silence on availability of jury trials. 167 The results of this inquiry weigh against permitting a jury trial because remedies for breach of fiduciary duty were both completely and exclusively available in courts of equity. 168 Yet, Mertens rejected this inquiry when it concluded that equitable remedies were those typically available in equity rather than those that courts of equity were empowered to provide in a particular type

160. E.g., Abbott v. Lockheed Martin COIl'., No. 06-CV-0701-MJR, 2007 WL 2316481, at ·3 (S.D. III. Aug. 13, 2007).

161. E.g., Chao v. Meixner, No. 1:07-CV-0595-WSD, 2007 WL 4225069, at ·5 (N.D. Ga. Nov. 27, 2007).

162. E.g., Abbott, 2007 WL 2316481, at ·2 (holding that ERISA claims have no antecedent in common law and analogous actions at common law were equitable).

163. E.g., Meixner, 2007 WL 4225069, at·3 (reasoning that monetary relief for losses to compensate the plan is an action for damages, which is legal relief).

164. Abbott, 2007 WL 2316481, at ·2; Spano v. Boeing Co., No. 06-CV-743-DRH, 2007 WL 1149192, at ·8 (S.D. 1lI. Apr. 18,2007); Broadnax Mills, Inc. v. Blue Cross & Blue Shield of Va., 876 F. Supp. 809, 816 (E.D. Va. 1995).

165. Spano, 2007 WL 1149192, at "5. 166. Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 109-10 (\989). 167. See Meixner, 2007 WL 4225069, at ·3; Abbott, 2007 WL 2316481, at ·2; Spano, 2007 WL

1149192, at *4-5, 7-8; Bona v. Barasch, No. 01 Civ. 2289 (MBM), 2003 WL 1395932, at *35 (S.D.N.Y. Mar. 20, 2003); Broadnax Mills, 876 F. Supp. at 816-17.

168. Meixner, 2007 WL 4225069, at ·3; Abbott, 2007 WL 2316481, at *2; Spano, 2007 WL 1149192, at *4-5, 7-8; Bona, 2003 WL 1395932, at *35; Broadnax Mil/s, 876 F. Supp. at 816-17.

22




of case. 169 Moreover, even the courts that rely on this inquiry to strikedemands for jury trials concede that although ERISA may begrounded in the common law of trusts, the statute is not coextensivewith the common law. Importantly, fiduciary duties under ERISA are"broader and more stringent than the common law of trusts."'170

2. Classic Legal Remedies Are Expressly Available Under§ 502 (a) (2)

Some courts, against the weight of authority and consistent withthe Seventh Amendment test, have minimized the impact of thecomparison of the statutory claim to its 18th century analogue andplaced greater emphasis on the nature of the remedy sought. 17 1 TheSupreme Court has perhaps supplied more ammunition than thelower courts have used in addressing this question. For example, theCourt has said that claims for lost profits 172 and compensatorydamages 173 are cognizable under § 502(a)(2), yet permitting a jurytrial remains the minority position.

The express language of ERISA permits legal and equitableremedies for breach of fiduciary duties. 174 Although some courts havemade reference to the textual distinction between equitable andremedial relief,175 courts have not relied on that distinction torecognize a legal remedy not encompassed by the damages orrestitutionary liability created by § 409. Where plaintiffs seekcompensatory damages under ERISA they seek a remedy typicallyand traditionally available at law.' 76 On the other hand, whereplaintiffs seek to impose restitutionary liability under § 409, thecourts must employ the rationale of Great- West to determine whether

169. Mertens v. Hewitt Assocs., 508 U.S. 248, 256-58 (1993).170. Spano, 2007 WL 1149192, at *4. Nonetheless, even courts that permitted a jury trial concluded

that this part of the inquiry militated against its ultimate conclusion. Meixner, 2007 WL 4225069, at *3;Bona, 2003 WL 1395932, at *35.

171. See generally Meixner, 2007 WL 4225069; Bona, 2003 WL 1395932.172. LaRue v. DeWolff, Boberg & Assocs., Inc., 128 S. Ct. 1020, 1024 n.4 (2008).173. Mertens, 508 U.S. at 252.174. Meixner, 2007 WL 4225069, at *3; Bona, 2003 WL 1395932, at *34.175. Meixner, 2007 WL4225069, at *2.176. Id. at *2, 3; Lamberty v. Premier Millwork & Lumber Co., 329 F. Supp. 2d 737, 745 (E.D. Va.

2004); Bona, 2003 WL 1395932, at *34.

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of case. 169 Moreover, even the courts that rely on this inquiry to strike demands for jury trials concede that although ERISA may be grounded in the common law of trusts, the statute is not coextensive with the common law. Importantly, fiduciary duties under ERISA are "broader and more stringent than the common law of trusts." I 70

2. Classic Legal Remedies Are Expressly Available Under § 502(a)(2)

Some courts, against the weight of authority and consistent with the Seventh Amendment test, have minimized the impact of the comparison of the statutory claim to its 18th century analogue and placed greater emphasis on the nature of the remedy sought. 171 The Supreme Court has perhaps supplied more ammunition than the lower courts have used in addressing this question. For example, the Court has said that claims for lost profits l72 and compensatory damages l73 are cognizable under § 502(a)(2), yet permitting a jury trial remains the minority position.

The express language of ERISA permits legal and equitable remedies for breach of fiduciary duties. 174 Although some courts have made reference to the textual distinction between equitable and remedial relief, I 75 courts have not relied on that distinction to recognize a legal remedy not encompassed by the damages or restitutionary liability created by § 409. Where plaintiffs seek compensatory damages under ERISA they seek a remedy typically and traditionally available at law. 176 On the other hand, where plaintiffs seek to impose restitutionary liability under § 409, the courts must employ the rationale of Great-West to determine whether

169. Mertens v. Hewitt Assocs., 508 U.S. 248, 256-58 (1993). 170. Spano, 2007 WL 1149192, at *4. Nonetheless, even courts that permitted a jury trial concluded

that this part of the inquiry militated against its ultimate conclusion. Meixner, 2007 WL 4225069, at *3; Bona, 2003 WL 1395932, at *35.

171. See generally Meixner, 2007 WL 4225069; Bona, 2003 WL 1395932. 172. LaRue v. DeWolff, Boberg & Assocs., Inc., 128 S. Cl 1020, 1024 n.4 (2008). 173. Mertens, 508 U.S. at 252. 174. Meixner, 2007 WL 4225069, at *3; Bona, 2003 WL 1395932, at *34. 175. Meixner, 2007 WL4225069, at *2. 176. Id. at *2, 3; Lamberty v. Premier Millwork & Lumber Co., 329 F. Supp. 2d 737, 745 (E.D. Va.

2004); Bona, 2003 WL 1395932, at *34.

23




the restitution sought is legal or equitable. 177 This inquiry essentiallyrequires a determination of whether plaintiffs seek return oraccounting of specific funds-indicating equitable relief-or, merelycompensation for losses-legal relief.178

III. PROPOSALS

If a claim is cognizable under § 502(a)(2) and seeks legal ratherthan equitable relief, as those terms have been given meaning underMertens and Great-West, parties should be afforded a trial by jurypursuant to the Seventh Amendment.

Courts must determine whether they will continue to adhere to thelogic that claims for breach of fiduciary are inherently equitable andtherefore not susceptible to the Seventh Amendment right to jurytrial, 179 or whether they will faithfully apply doctrine and precedentto answer the difficult question of whether parties are entitled to ajury trial. 180 Moreover, courts have signaled that they are "reluctant totamper with ERISA's carefully crafted and detailed enforcementscheme."' 181 Yet the Supreme Court has decried the lack ofsophistication in certain remedial provisions,' 82 and Justices haveoften attacked lofty characterizations of the remedial provisions.' 83

The refusal of some courts to fully engage the complicated analysis isnot careful application of precedent but an unfaithful side-step of acomplex issue. Concededly, the issue is made complex by thedecision in Mertens to define equitable relief as that typicallyavailable in equity rather than that relief available at equity in aparticular case. 184 Mertens could have easily chosen the broaderinterpretation, rendering all relief under § 502(a)(2) inherently

177. Meixner, 2007 WL 4225069, at *4.178. Id.179. E.g., In re Vorphal, 695 F.2d 318, 322 (8th Cir. 1982).180. See Meixner, 2007 WL 4225069, at *5.181. E.g., White v. Martin, No. 99-1447 (JRT/FLN), 2002 WL 598432, at *2 (D. Minn. Apr. 12,

2002).182. Mertens v. Hewitt Assocs., 508 U.S. 248, 259 n.8 (1993).183. Id. at 269 n.4 (White, J., dissenting); Mass. Mut. Life Ins. Co. v. Russell, 473 U.S. 134, 156-57

(1985) (Brennan, J., dissenting).184. See Langbein, supra note 2, at 1337-38.

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the restitution sought is legal or equitable. l77 This inquiry essentially requires a determination of whether plaintiffs seek return or accounting of specific funds-indicating equitable relief-or, merely compensation for losses-legal relief. 17s

III. PROPOSALS

If a claim is cognizable under § 502(a)(2) and seeks legal rather than equitable relief, as those terms have been given meaning under Mertens and Great-West, parties should be afforded a trial by jury pursuant to the Seventh Amendment.

Courts must determine whether they will continue to adhere to the logic that claims for breach of fiduciary are inherently equitable and therefore not susceptible to the Seventh Amendment right to jury trial,179 or whether they will faithfully apply doctrine and precedent to answer the difficult question of whether parties are entitled to a jury trial. ISO Moreover, courts have signaled that they are "reluctant to tamper with ERISA's carefully crafted and detailed enforcement scheme.,,181 Yet the Supreme Court has decried the lack of sophistication in certain remedial provisions,ls2 and Justices have often attacked lofty characterizations of the remedial provisions. IS3

The refusal of some courts to fully engage the complicated analysis is not careful application of precedent but an unfaithful side-step of a complex issue. Concededly, the issue is made complex by the decision in Mertens to define equitable relief as that typically available in equity rather than that relief available at equity in a particular case. IS4 Mertens could have easily chosen the broader interpretation, rendering all relief under § 502(a)(2) inherently

177. Meixner, 2007 WL 4225069, at *4. 17S. Id. 179. E.g., In re Vorphal, 695 F.2d 31S, 322 (Sth Cir. 19S2). ISO. See Meixner, 2007 WL 4225069, at *5. lSI. E.g., White v. Martin, No. 99-1447 (JRTIFLN), 2002 WL 59S432, at *2 (D. Minn. Apr. 12,

2002). IS2. Mertens v. Hewitt Assocs., 50S U.S. 24S, 259 n.S (1993). IS3. Id. at 269 n.4 (White, J., dissenting); Mass. Mut. Life Ins. Co. v. Russell, 473 U.S. 134, 156-57

(19S5) (Brennan, J., dissenting). IS4. See Langbein, supra note 2, at 1337-3S.

24




equitable and removing any notion of a jury trial right for breach offiduciary duty under ERISA. 18 5 Yet, Mertens and Great-West arecontrolling and the lower courts cannot ignore them whenconsidering jury trial demands.' 86

A. If Claim Is Legal Within the Meaning of ERISA, Parties AreEntitled to Trial by Jury

Whether a claim seeks equitable relief within the meaning ofERISA's remedial provisions depends on whether the remedy wastypically available in a court of equity.' 87 Courts determine whetherclaims are legal or equitable by inquiring into the basis of the claimand the nature of the remedy sought.1 88 A claim must be either legalor equitable; there simply are no other types of claims.1 89 TheSeventh Amendment jury trial right may be invoked where the claimis legal rather than equitable.' 90 To determine whether a claim is legalor equitable in this context, courts must compare the claim to 18thcentury causes of action prior to the merger and examine the natureof the remedy sought-the more important of the two inquiries, anddecide whether, on balance, the claim is legal or equitable.' 9 1 Ifdifferent in form, these tests cannot differ in substance to the extentthat they might yield different results, since, at bottom, both tests areconcerned with discerning legal from equitable rights.192 For thesetests to yield different results, a court would have to hold that a

185. See id. at 1355.186. Bona v. Barasch, No. 01 Civ. 2289 (MBM), 2003 WL 1395932, at *34 (S.D.N.Y. Mar. 20,

2003).187. Mertens, 508 U.S. at 257.188. Great-West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204, 213 (2002).189. See Granfinanciera, S.A. v. Nordberg, 492 U.S. 33, 41 (1989) ("We have consistently interpreted

the phrase '[s]uits at common law' to refer to suits in which legal rights were to be ascertained anddetermined, in contradistinction to those where equitable rights alone were recognized, and equitableremedies were administered." (internal quotations omitted)).

190. Id.191. Id. at 42.192. Great-West, 534 U.S. at 213; Granfinanciera, 492 U.S. at 41. But see Great-West, 534 U.S. at

233 (2002) (Ginsburg, J., dissenting) (arguing that looking to pre-merger causes of action makes sensein the Seventh Amendment test but not in the ERISA test since the statute was enacted in 1974-longafter the days of the divided bench). However, Congress clearly did refer specifically to "equitablerelief' in ERISA, and that modifier must be given meaning. See id. at 217-18 (majority opinion);Mertens, 508 U.S. at 258.

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equitable and removing any notion of a jury trial right for breach of fiduciary duty under ERISA. 185 Yet, Mertens and Great- West are controlling and the lower courts cannot ignore them when considering jury trial demands.186

A. If Claim Is Legal Within the Meaning of ERISA, Parties Are Entitled to Trial by Jury

Whether a claim seeks equitable relief within the meaning of ERISA's remedial provisions depends on whether the remedy was typically available in a court of equity. 187 Courts determine whether claims are legal or equitable by inquiring into the basis of the claim and the nature of the remedy sought. 188 A claim must be either legal or equitable; there simply are no other types of claims.189 The Seventh Amendment jury trial right may be invoked where the claim is legal rather than equitable. 190 To detennine whether a claim is legal or equitable in this context, courts must compare the claim to 18th century causes of action prior to the merger and examine the nature of the remedy sought-the more important of the two inquiries, and decide whether, on balance, the claim is legal or equitable. 191 If different in form, these tests cannot differ in substance to the extent that they might yield different results, since, at bottom, both tests are concerned with discerning legal from equitable rightS.192 For these tests to yield different results, a court would have to hold that a

185. See id. at 1355. 186. Bona v. Barasch, No. 01 Civ. 2289 (MBM), 2003 WL 1395932, at *34 (S.D.N.Y. Mar. 20,

2003). 187. Mertens, 508 U.S. at 257. 188. Great-West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204, 213 (2002). 189. See Granfinanciera, S.A. v. Nordberg, 492 U.S. 33, 41 (1989) ("We have consistently interpreted

the phrase . [s ]uits at common law' to refer to suits in which legal rights were to be ascertained and determined, in contradistinction to those where equitable rights alone were recognized, and equitable remedies were administered." (internal quotations omitted».

190. [d. 191. Id. at 42. 192. Great-West, 534 U.S. at 213; Granfinanciera, 492 U.S. at 41. But see Great-West, 534 U.S. at

233 (2002) (Ginsburg, J., dissenting) (arguing that looking to pre-merger causes of action makes sense in the Seventh Amendment test but not in the ERISA test since the statute was enacted in 1974-long after the days of the divided bench). However, Congress clearly did refer specifically to "equitable relief' in ERISA, and that modifier must be given meaning. See id. at 217-18 (majority opinion); Mertens, 508 U.S. at 258.

25




particular claim is legal within the meaning of ERISA, but equitablewithin the meaning of the Seventh Amendment. Without reference tothe tests prescribed by the Court, there simply is no basis for defininglegal and equitable differently based on context. 193 The distinctionbetween legal and equitable must be the same in both contexts., 94

Thus, in the same manner that courts have excluded claims not withinERISA's meaning of equitable, 195 they must determine those types ofclaims are legal and subject to the Seventh Amendment right to jurytrial so long as they are cognizable under § 502(a)(2). 96

Starting from the noncontroversial premise that all relief is eitherlegal or equitable, and accepting that all relief which is not equitableis legal and that equitable relief is that relief which was typicallyavailable in courts of equity, the conclusion is warranted that reliefnot typically available in courts of equity is legal relief. Since claimsfor damages, or monetary relief, were not typically available inequity, 197 they are claims for legal relief. Finally, damages areavailable for breach of fiduciary duty under § 502(a)(2),' 98 and legalrelief is therefore available under § 502(a)(2).

B. Section 502(a)(2) Cognizes Claims for Legal Relieffor Breach ofFiduciary Duty

Pursuant to §§ 409 and 502(a)(2), a "fiduciary is personally liablefor damages" resulting from a breach of fiduciary duty.199 Perhapsnothing is more apparent from the line of cases interpreting ERISA'sremedial provisions than the declaration that a suit for damages is asuit for legal relief.200 The test on which the Court has relied toconclude the damages remedy is available is found in § 409: "[A

193. See Bona v. Barasch, No. 01 Civ. 2289 (MBM), 2003 WL 1395932, at *34 (S.D.N.Y. Mar. 20,2003) ("Although [Great-West] did not deal with the right to a jury trial per se, the Supreme Court'sexplication of the distinction between law and equity... is relevant here as well.").

194. See Schwartz & Hack, supra note 95.195. E.g., Great-West, 534 U.S. at 210.196. The claim in Great-West, although legal, was not cognizable under § 502(a)(2) because the

plaintiffs did not allege a breach of fiduciary duty. Id. at 207-09.197. Id. at 210.198. Mertens v. Hewitt Assocs., 508 U.S. 248, 252 (1993).199. Id.200. Great-West, 534 U.S. at 213; Mertens, 508 U.S. at 255 (1993).

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particular claim is legal within the meaning of ERISA, but equitable within the meaning of the Seventh Amendment. Without reference to the tests prescribed by the Court, there simply is no basis for defining legal and equitable differently based on context.193 The distinction between legal and equitable must be the same in both contexts. 194

Thus, in the same manner that courts have excluded claims not within ERISA's meaning of equitable, 195 they must determine those types of claims are legal and subject to the Seventh Amendment right to jury trial so long as they are cognizable under § 502(a)(2).196

Starting from the noncontroversial premise that all relief is either legal or equitable, and accepting that all relief which is not equitable is legal and that equitable relief is that relief which was typically available in courts of equity, the conclusion is warranted that relief not typically available in courts of equity is legal relief. Since claims for damages, or monetary relief, were not typically available in equity,197 they are claims for legal relief. Finally, damages are available for breach of fiduciary duty under § 502(a)(2),198 and legal relief is therefore available under § 502(a)(2).

B. Section 502(a)(2) Cognizes Claimsfor Legal Relieffor Breach of Fiduciary Duty

Pursuant to §§ 409 and 502(a)(2), a "fiduciary is personally liable for damages" resulting from a breach of fiduciary duty.199 Perhaps nothing is more apparent from the line of cases interpreting ERISA's remedial provisions than the declaration that a suit for damages is a suit for legal relief.2oo The test on which the Court has relied to conclude the damages remedy is available is found in § 409: "[A

193. See Bona v. Barasch, No. 01 Civ. 2289 (MBM), 2003 WL 1395932, at *34 (S.D.N.Y. Mar. 20, 2003) ("Although [Great-West] did not deal with the right to a jury trial per se, the Supreme Court's explication of the distinction between law and equity ... is relevant here as well.").

194. See Schwartz & Hack, supra note 95. 195. E.g., Great-West, 534 U.S. at 210. 196. The claim in Great-West, although legal, was not cognizable under § 502(a)(2) because the

plaintiffs did not allege a breach of fiduciary duty. [d. at 207-09. 197. [d. at 210. 198. Mertens v. Hewitt Assocs., 508 U.S. 248, 252 (1993). 199. [d. 200. Great-West, 534 U.S. at 213; Mertens, 508 U.S. at 255 (1993).

26




fiduciary in breach of duty] shall be personally liable to make good tosuch plan any losses to the plan resulting from each such breach."201

Before LaRue, few claims could be stated by a participant orbeneficiary for damages under this section since it was concernedwith losses to the plan rather than to individuals.20 2 However, LaRueheld that, because defined contribution plans have become thepredominant form of pension plan, individuals could bring suitagainst fiduciaries for losses to individual accounts.20 3 Thus, at leastin a defined contribution plan-those plans that use 401(k) accountsas the means of administering pension plans-participants andbeneficiaries can easily state a claim for damages under § 502(a)(2),and fiduciaries of defined contribution plans are aware of greaterpotential for litigation concerning their actions. 204 LaRue suggeststhat the damages clause of § 409 has teeth that it did not have-or atleast was not perceived to have-under Russell.

Justice Thomas, concurring in judgment, warns that "a participantsuing to recover benefits on behalf of the plan is not entitled tomonetary relief payable directly to him; rather, any recovery must bepaid to the plan."2°5 Justice Thomas, joined by Justice Scalia,anticipated the jury trial argument and sought to avoid it by treatingthe damages clause as creating only an equitable remedy toparticipants or beneficiaries. Yet, Justices Thomas and Scaliaunequivocally did not agree with the rationale of the Court-insteadthey reasoned that damages to an individual account were damages toplan assets.20 6 The Court's opinion, focusing on the damage to anindividual account rather than the "entire plan," is not susceptible tothe same argument converting the participant's legal rights into

201. 29 U.S.C. § 1109(a) (2000).202. See Mass. Mut. Life Ins. Co. v. Russell, 473 U.S. 134, 140 (1985) (explaining that although a

participant or beneficiary is authorized to bring suit, potential personal liability of the fiduciary runs tothe plan rather than the participant).

203. LaRue v. DeWolff, Boberg & Assocs., 128 S. Ct. 1020, 1026 (2008).204. Posting of Stephen D. Rosenberg to Boston ERISA and Insurance Litigation Blog, Will LaRue

Actually Lead to an Increase in Litigation?, http://www.bostonerisalaw.com/archives/401k-plans-will-larue-actually-lead-to-an-increase-in-litigation.html (Feb. 29, 2008).

205. LaRue, 128 S. Ct. at 1029 (Thomas, J., concurring injudgment).206. Id.

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fiduciary in breach of duty] shall be personally liable to make good to such plan any losses to the plan resulting from each such breach.,,201 Before LaRue, few claims could be stated by a participant or beneficiary for damages under this section since it was concerned with losses to the plan rather than to individuals.202 However, LaRue held that, because defined contribution plans have become the predominant form of pension plan, individuals could bring suit against fiduciaries for losses to individual accounts.z03 Thus, at least in a defined contribution plan-those plans that use 401(k) accounts as the means of administering pension plans-participants and beneficiaries can easily state a claim for damages under § 502(a)(2), and fiduciaries of defined contribution plans are aware of greater potential for litigation concerning their actions.204 LaRue suggests that the damages clause of § 409 has teeth that it did not have--or at least was not perceived to have-under Russell.

Justice Thomas, concurring in judgment, warns that "a participant suing to recover benefits on behalf of the plan is not entitled to monetary relief payable directly to him; rather, any recovery must be paid to the plan. ,,205 Justice Thomas, joined by Justice Scalia, anticipated the jury trial argument and sought to avoid it by treating the damages clause as creating only an equitable remedy to participants or beneficiaries. Yet, Justices Thomas and Scalia unequivocally did not agree with the rationale of the Court-instead they reasoned that damages to an individual account were damages to plan assets.206 The Court's opinion, focusing on the damage to an individual account rather than the "entire plan," is not susceptible to the same argument converting the participant's legal rights into

201. 29 U.S.C. § 1l09(a)(2000). 202. See Mass. Mut. Life Ins. Co. v. Russell, 473 U.s. 134, 140 (1985) (explaining that although a

participant or beneficiary is authorized to bring suit, potential personal liability of the fiduciary runs to the plan rather than the participant). 203. LaRue v. DeWolff, Boberg & Assocs., 128 S. Ct. 1020, 1026 (2008). 204. Posting of Stephen D. Rosenberg to Boston ERISA and Insurance Litigation Blog, Will LaRue

Actually Lead to an Increase in Litigation?, http://www.bostonerisalaw.comlarchivesl40Ik-plans-willlarue-actually-lead-to-an-increase-in-iitigation.htmi (Feb. 29,2008). 205. LaRue, 128 S. Ct. at 1029 (Thomas, J., concurring in judgment). 206. /d.

27




207equitable ones. Ordinarily, successful suits by participants orbeneficiaries under § 502(a)(2) for damages resulting from a breachof fiduciary duty will result in monetary recovery to the plaintiffsindividual account.20 8 "Almost invariably ... suits seeking (whetherby judgment, injunction, or declaration) to compel the defendant topay a sum of money to the plaintiff are suits for 'moneydamages."' 20 9 As noted above, "' [d]amages' refers to money awardedas reparation for injury resulting from breach of legal duty" and to"compensate plaintiff for a loss," while "specific relief prevents orundoes the loss. ' '210 Thus, monetary relief paid to the plaintiff'sindividual account for damages suffered as a result of a breach oflegal duty satisfy the rubric of legal relief urged by Justice Scalia andlater accepted by the Court in Mertens and Great-West.

The final liability clause in § 409 subjects the breaching fiduciaryto "such other equitable or remedial relief as the court may deemappropriate.",211 This provision indicates that "equitable" means acategory of relief less than all relief.212 By implication and extensionof the same logic, "remedial relief' must include something otherthan "equitable" relief.2 13 Assuming the validity of this construction,"remedial relief' must mean legal relief because it cannot refer onlyto equitable relief.214

Therefore, the plain meaning of the text of § 409 indicates that atleast some suits brought under § 502(a)(2) involve legal rights andobligations, which entitle the parties to a trial by jury.

207. Id. at 1025-26 (majority opinion) ("Russell's emphasis on protecting the 'entire plan' fromfiduciary misconduct reflects the former landscape of employee benefit plans. That landscape haschanged.").

208. See id. at 1029 (Thomas, J., concurring in judgment).209. Bowen v. Massachusetts, 487 U.S. 879, 918-19 (1988) (Scalia, J., dissenting).210. Id. at 913-14.211. 29 U.S.C. § 1109(a) (2000). Nothing suggests that this appropriateness standard differs in any

way from the appropriateness standard supplied by § 502(a)(2). See 29 U.S.C. § I 132(a)(2) (2000).212. Mertens v. Hewitt Assocs., 508 U.S. 248, 259 n.8 (1993).213. See id.214. See id. at 258 ("We will not read the statute to render the modifier superfluous.").

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equitable ones?07 Ordinarily, successful suits by participants or beneficiaries under § 502(a)(2) for damages resulting from a breach of fiduciary duty will result in monetary recovery to the plaintiff's individual account.208 "Almost invariably ... suits seeking (whether by judgment, injunction, or declaration) to compel the defendant to pay a sum of money to the plaintiff are suits for 'money damages. ",209 As noted above, '" [d]amages' refers to money awarded as reparation for injury resulting from breach of legal duty" and to "compensate plaintiff for a loss," while "specific relief prevents or undoes the IOSS.,,210 Thus, monetary relief paid to the plaintiff's individual account for damages suffered as a result of a breach of legal duty satisfy the rubric of legal relief urged by Justice Scalia and later accepted by the Court in Mertens and Great-West.

The final liability clause in § 409 subjects the breaching fiduciary to "such other equitable or remedial relief as the court may deem appropriate.,,211 This provision indicates that "equitable" means a category of relief less than all relief.212 By implication and extension of the same logic, "remedial relief' must include something other than "equitable" relief.213 Assuming the validity of this construction, "remedial relief' must mean legal relief because it cannot refer only to equitable relief.214

Therefore, the plain meaning of the text of § 409 indicates that at least some suits brought under § 502(a)(2) involve legal rights and obligations, which entitle the parties to a trial by jury.

207. ld. at 1025-26 (majority opinion) ("Russell's emphasis on protecting the 'entire plan' from fiduciary misconduct reflects the fonner landscape of employee benefit plans. That landscape has changed.").

208. See id. at 1029 (Thomas, J., concurring in judgment). 209. Bowen v. Massachusetts, 487 U.S. 879, 918-19 (1988) (Scalia, 1., dissenting). 210. ld. at 913-14. 211. 29 U.S.C. § 1109(a) (2000). Nothing suggests that this appropriateness standard differs in any

way from the appropriateness standard supplied by § 502(a)(2). See 29 U.S.C. § I I 32(a)(2) (2000). 212. Mertens v. Hewitt Assocs., 508 U.S. 248, 259 n.8 (1993). 213. Seeid. 214. See id. at 258 ("We will not read the statute to render the modifier superfluous.").

28




C. The Supreme Court May Avoid Related Questions in Anticipationof Change

The Court recently declined an opportunity "to address whenmonetary awards for breaches of fiduciary can qualify as equitablerelief . . . under ERISA. 215 It is not clear what role, if any,anticipation of healthcare reform and ERISA reform played in theSupreme Court's denial of certiorari in this case. 2 16 Regardless,speculation regarding healthcare and ERISA reform escalated uponthe election of Barack Obama, and the expansion of Democratcontrol of Congress. 217 With the passage of the Patient Protection andAffordable Care Act (PPACA)218 making no overt changes toERISA's remedial scheme and no impending likelihood for change,the Court may be more willing to revisit relief available under§ 502(a)(2). Accordingly, the healthcare reform efforts should notimpact the Court's certiorari decisions; however, it is unclear (andbeyond the scope of this Note) whether health reform efforts andPPACA will affect federal courts' analysis in ERISA cases.

CONCLUSION

When the Supreme Court held that "equitable" means "thosecategories of relief typically available in a court of equity," ratherthan whatever relief a court of equity could have granted in aparticular case, it started down the path of narrowing the number ofcognizable claims under ERISA.219 However, by narrowing the scopeof "equitable" relief, the Court broadened the number of cognizableclaims that would be defined as "legal" relief. This narrowing trend

215. Posting of Stephen D. Rosenberg to Boston ERISA and Insurance Litigation Blog, FromPreemption to ERISA Standing, and Lots of Things In-Between, http://www.bostonerisalaw.com/archives/cat-equitable-relief.html (June 30, 2008).

216. Amschwand v. Spherion Corp, 128 S. Ct. 2995 (2008) (denial of cert.).217. Posting of Paul M. Secunda to Workplace Prof Blog, Obama and the Future of Labor and

Employment Law, http://lawprofessors.typepad.com/laborprof blog/2008/1 1/obama-and-the-f.html(Nov. 5, 2008).PUB. L. No. 111-148, 124 Stat. 119 (2010).

218. PuB. L. No. 111-148, 124 Stat. 119 (2010).219. Mertens, 508 U.S. at 256.

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C. The Supreme Court May Avoid Related Questions in Anticipation o/Change

The Court recently declined an opportunity "to address when monetary awards for breaches of fiduciary can qualify as equitable relief . . . under ERISA.,,215 It is not clear what role, if any, anticipation of healthcare reform and ERISA reform played in the Supreme Court's denial of certiorari in this case.216 Regardless, speculation regarding health care and ERISA reform escalated upon the election of Barack Obama, and the expansion of Democrat control ofCongress.217 With the passage of the Patient Protection and Affordable Care Act (PPACAi I8 making no overt changes to ERISA's remedial scheme and no impending likelihood for change, the Court may be more willing to revisit relief available under § 502(a)(2). Accordingly, the healthcare reform efforts should not impact the Court's certiorari decisions; however, it is unclear (and beyond the scope of this Note) whether health reform efforts and PP ACA will affect federal courts' analysis in ERISA cases.

CONCLUSION

When the Supreme Court held that "equitable" means "those categories of relief typically available in a court of equity," rather than whatever relief a court of equity could have granted in a particular case, it started down the path of narrowing the number of cognizable claims under ERISA.219 However, by narrowing the scope of "equitable" relief, the Court broadened the number of cognizable claims that would be defined as "legal" relief. This narrowing trend

215. Posting of Stephen D. Rosenberg to Boston ERlSA and Insurance Litigation Blog, From Preemption to ERISA Standing. and Lots of Things In-Between, http://www.bostonerisalaw.coml archiveslcat-equitable-relief.html (June 30, 2008). 216. Amschwand v. Spherion Corp, 128 S. Ct. 2995 (2oo8)(denial ofcert.). 217. Posting of Paul M. Secunda to Workplace Prof Blog, Obama and the Future of Labor and

Employment Law, http://lawprofessors.typepad.comllaborproCblog/2008/11/0bama-and-the-f.html (Nov. 5, 2008). PuB. L. No. 111-148, 124 Stat. 119 (2010).

218. PuB. L. No. 111-148, 124 Stat. 119 (2010). 219. Mertens, 508 U.S. at 256.

29




continued in Great- West.22 0 As a consequence of this development,those cognizable claims defined by default as legal rather thanequitable became susceptible to the Seventh Amendment right to trialby jury, which attaches to claims concerning legal rather thanequitable rights.22' Since both the ERISA test for whether a claim islegal or equitable and the Seventh Amendment test for whether theparties are entitled to a jury trial are designed to determine whetherthe claim at issue is legal or equitable, it is unsurprising that they aresimilar. 222 It would be anomalous to hold that a claim is legal underone test and equitable under the other.223

A wide range of suits may be brought under ERISA, including224claims for breach of fiduciary duty under § 502(a)(2). Despite the

fact that courts of equity had exclusive jurisdiction over breach offiduciary duty claims, 225 a claim for breach of fiduciary duty underERISA is not automatically equitable.226 Indeed, ERISA is groundedin the common law of trusts and, in certain instances, informed bythat common law. But ERISA is not coextensive with the commonlaw of trusts.2 27 Great- West directs that when the question arises as towhether a particular claim is equitable or legal, the courts mustinquire into the basis of the claim and nature of the remedy sought.228

The inquiry into the basis of the claim analogizes the claim at issue to18th century causes of action, but does so without regard to the factthat a claim for breach of fiduciary duty would have been brought ina court of equity which could have awarded all forms of relief.229 TheCourt has recognized that some claims for legal relief are cognizable

220. Great-West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204, 210, 212-13 (2002).221. Parsons v. Bedford, 28 U.S. (3 Pet.) 433, 446-47 (1830).222. See Kusner, supra note 5, at 304; Schwartz & Hack, supra note 95.223. See Kusner, supra note 5, at 304.224. 29 U.S.C. §§ 1109(a), 1132(a)(2) (2000).225. Mertens v. Hewitt Assocs., 508 U.S. 248, 257 (1993).226. Id. at 252.227. Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 109-11 (1989).228. Great-West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204, 213 (2002).229. See Great-West, 534 U.S. at 213, 215; Mertens, 508 U.S. at 258.

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continued in Great-West.220 As a consequence of this development, those cognizable claims defined by default as legal rather than equitable became susceptible to the Seventh Amendment right to trial by jury, which attaches to claims concerning legal rather than equitable rightS?21 Since both the ERISA test for whether a claim is legal or equitable and the Seventh Amendment test for whether the parties are entitled to a jury trial are designed to determine whether the claim at issue is legal or equitable, it is unsurprising that they are similar.222 It would be anomalous to hold that a claim is legal under one test and equitable under the other.223

A wide range of suits may be brought under ERISA, including claims for breach of fiduciary duty under § 502(a)(2).224 Despite the fact that courts of equity had exclusive jurisdiction over breach of fiduciary duty claims,225 a claim for breach of fiduciary duty under ERISA is not automatically equitable?26 Indeed, ERISA is grounded in the common law of trusts and, in certain instances, informed by that common law. But ERISA is not coextensive with the common law oftrusts.227 Great-West directs that when the question arises as to whether a particular claim is equitable or legal, the courts must inquire into the basis of the claim and nature of the remedy sought.228

The inquiry into the basis of the claim analogizes the claim at issue to 18th century causes of action, but does so without regard to the fact that a claim for breach of fiduciary duty would have been brought in a court of equity which could have awarded all forms of relief.229 The Court has recognized that some claims for legal relief are cognizable

220. Great-West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204, 210, 212-13 (2002). 221. Parsons v. Bedford, 28 u.s. (3 Pet.) 433,446-47 (1830). 222. See Kusner, supra note 5, at 304; Schwartz & Hack, supra note 95. 223. See Kusner, supra note 5, at 304. 224. 29 U.S.C. §§ lI09(a), I 132(a)(2) (2000). 225. Mertens v. Hewitt Assocs., 508 u.s. 248, 257 (1993). 226. Id. at 252. 227. Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 109-11 (1989). 228. Great-West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204, 213 (2002). 229. See Great-West, 534 U.S. at 213, 215; Menens, 508 U.S. at 258.

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under § 502(a)(2) 23 0 and implied that other legal claims may becognizable as well.23'

If a particular claim is legal rather than equitable within themeaning of ERISA, it is highly unlikely that the constitutional rightto trial by jury will not apply since the Seventh Amendment testemphasizes the inquiry into the nature of the remedy sought over thecomparison of the particular claim to causes of action existing priorto the merger of law and equity courts. 232 Although the SeventhAmendment test is perhaps subtly different, the difference should notyield a different result than the ERISA test, as both seek-to determinewhether the underlying claim involves legal rights and obligations. 233

After LaRue's holding extended to participants and beneficiariesthe right to recover losses to their individual defined contributionaccounts, some members of the Court signaled a desire to temper thisright by insinuating the claim would be equitable rather than legal.234

The rationale of the Court does not support such a holding,2 35 andeven if the Court later adopts such a rule, it would not convert all§ 502(a)(2) claims into equitable ones.

Thus, § 502(a)(2) recognizes claims involving legal rights andobligations that entitle parties to the constitutional right to trial byjury.

230. Mertens, 508 U.S. at 252 (declaring that fiduciaries are personally liable for damages).231. Id. at 258 n.8 (implying that "remedial relief' entails legal relief as opposed to equitable relief).232. Granfmanciera, S.A. v. Nordberg, 492 U.S. 33, 41-42 (1989).233. See Kusner, supra note 5, at 304.234. LaRue v. DeWolff, Boberg & Assocs., 128 S. Ct. 1020, 1029 (2008) (Thomas, J., concurring in

judgment) ("Of course, a participant suing to recover benefits on behalf of the plan is not entitled tomonetary relief payable directly to him; rather, any recovery must be paid to the plan.").

235. See id. at 1026.

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under § 502(a)(2i30 and implied that other legal claims may be cognizable as well.231

If a particular claim is legal rather than equitable within the meaning of ERISA, it is highly unlikely that the constitutional right to trial by jury will not apply since the Seventh Amendment test emphasizes the inquiry into the nature of the remedy sought over the comparison of the particular claim to causes of action existing prior to the merger of law and equity COurtS.232 Although the Seventh Amendment test is perhaps subtly different, the difference should not yield a different result than the ERISA test, as both seekto determine whether the underlying claim involves legal rights and obligations.233

After LaRue's holding extended to participants and beneficiaries the right to recover losses to their individual defined contribution accounts, some members of the Court signaled a desire to temper this right by insinuating the claim would be equitable rather than lega1.234

The rationale of the Court does not support such a holding,235 and even if the Court later adopts such a rule, it would not convert all § 502(a)(2) claims into equitable ones.

Thus, § 502(a)(2) recognizes claims involving legal rights and obligations that entitle parties to the constitutional right to trial by jury.

230. Mertens, 508 U.S. at 252 (declaring that fiduciaries are personally liable for damages). 231. Id. at 258 n.8 (implying that "remedial relief' entails legal relief as opposed to equitable relief). 232. Granfmanciera, S.A. v. Nordberg, 492 U.S. 33,41-42 (1989). 233. See Kusner, supra note 5, at 304. 234. LaRue v. DeWolff, Boberg & Assocs., 128 S. Ct. 1020, 1029 (2008) (Thomas, 1., concurring in

judgment) ("Of course, a participant suing to recover benefits on behalf of the plan is not entitled to monetary relief payable directly to him; rather, any recovery must be paid to the plan."). 235. See id. at 1026.

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