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SUPREME COURT OF THE UNITED STATES
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No. 91-1671
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WILLIAM J. MERTENS, ALEX W. BANDROWSKI,
JAMES A. CLARK, and RUSSELL FRANZ,
PETITIONERS v. HEWITT ASSOCIATES
on writ of certiorari to the united states court
of appeals for the ninth circuit
[June 1, 1993]

  Justice White, with whom The Chief Justice, Justice
Stevens, and Justice O'Connor join, dissenting.
  The majority candidly acknowledges that it is plausible
to interpret the phrase -appropriate equitable relief- as
used in 502(a)(3), 88 Stat. 891, 29 U. S. C. 1132(a)(3),
at least standing alone, as meaning that relief which was
available in the courts of equity for a breach of trust.
Ante, at 8.  The majority also acknowledges that the relief
petitioners seek here-a compensatory monetary
award-was available in the equity courts under the
common law of trusts, not only against trustees for breach
of duty but also against nonfiduciaries knowingly partici-
pating in a breach of trust, id., at 7-8, 13, 14.  Finally,
there can be no dispute that ERISA was grounded in this
common-law experience and that -we are [to be] guided
by principles of trust law- in construing the terms of the
statute.  Firestone Tire & Rubber Co. v. Bruch, 489 U. S.
101, 111 (1989).  Nevertheless, the majority today holds
that in enacting ERISA Congress stripped ERISA trust
beneficiaries of a remedy against trustees and third
parties that they enjoyed in the equity courts under
common law.  Although it is assumed that a cause of
action against a third party such as respondent is pro-
vided by ERISA, the remedies available are limited to the
-traditional- equitable remedies, such as injunction and
restitution, and do not include compensatory damages-
-the classic form of legal relief.-  Ante, at 7 (emphasis in
original).  Because I do not believe that the statutory
language requires this result and because we have else-
where recognized the anomaly of construing ERISA in a
way that -would afford less protection to employees and
their beneficiaries than they enjoyed before ERISA was
enacted,- Firestone, supra, at 114 (emphasis added), I
must dissent.
                      I
  Concerned that many pension plans were being cor-
ruptly or ineptly mismanaged and that American workers
were losing their financial security in retirement as a
result, Congress in 1974 enacted ERISA, -declar[ing] [it]
to be the policy of [the statute] to protect . . . the inter-
ests of participants in employee benefit plans and their
beneficiaries, by requiring the disclosure and reporting to
participants and beneficiaries of financial and other
information with respect [to the plans], by establishing
standards of conduct, responsibility, and obligation for
fiduciaries of employee benefit plans, and by providing for
appropriate remedies, sanctions, and ready access to the
Federal courts.-  29 U. S. C. 1001(b).
  As we have noted previously, -ERISA's legislative
history confirms that the Act's fiduciary responsibility
provisions, 29 U. S. C. 1101-1114, `codif[y] and mak[e]
applicable to [ERISA] fiduciaries certain principles devel-
oped in the evolution of the law of trusts.'-  Firestone,
supra, at 110 (quoting H. R. Rep. No. 93-533, p. 11
(1973)).  ERISA, we have explained, -abounds with the
language and terminology of trust law- and must be
construed against the background of the common law of
trusts.  Firestone, supra, at 110-111; see also Central
States, Southeast and Southwest Areas Pension Fund v.
Central Transport, Inc., 472 U. S. 559, 570-571 (1985).
Indeed, absent some express statutory departure-such as
ERISA's broader definition of a responsible -fiduciary,- see
ante, at 14-Congress intended that the courts would look
to the settled experience of the common law in giving
shape to a -`federal common law of rights and obligations
under ERISA-regulated plans.'-  Firestone, supra, at 110;
see also H. R. Rep. No. 93-533, supra, at 11; S. Rep. No.
93-127, p. 29m (1973); 120 Cong. Rec. 29928, 29932
(1974) (statement of Sen. Williams).
  Accordingly, it is to the common law of trusts that we
must look in construing the scope of the -appropriate
equitable relief- for breaches of trust contemplated by
502(a)(3), 29 U. S. C. 1132(a)(3).  As the majority
notes, at common law the courts of equity were the
predominant forum for beneficiaries' claims arising from
a breach of trust.  These courts were not, however, the
exclusive forum.  In some instances, there was jurisdiction
both in law and in equity and it was generally (although
not universally) acknowledged that the beneficiary could
elect between her legal and equitable remedies.  See
Clews v. Jamieson, 182 U. S. 461, 480-481 (1901); G.
Bogert & G. Bogert, Law of Trusts and Trustees 870,
pp. 101-107 (2d rev. ed. 1982); 3 A. Scott & W. Fratcher,
Law of Trusts 198, pp. 194-203 (4th ed. 1988); J. Hill,
Trustees *518-*519; Annot., Remedy at Law Available to
Beneficiary of Trust as Exclusive of Remedy in Equity,
171 A. L. R. 429 (1947).  Indeed, the Restatement of
Trusts sets out in separate, successive sections the -legal-
and -equitable- remedies available to beneficiaries under
the common law of trusts.  See Restatement (Second) of
Trusts 198, 199 (1959).
  The traditional -equitable remedies- available to a trust
beneficiary included compensatory damages.  Equity
-endeavor[ed] as far as possible to replace the parties in
the same situation as they would have been in, if no
breach of trust had been committed.-  J. Hill, supra, at
*522; see also J. Tiffany & E. Bullard, Law of Trusts and
Trustees 585-586 (1862) (defendant is chargeable with any
losses caused to trust or with any profits trust might have
earned absent the breach).  This included, where neces-
sary, the payment of a monetary award to make the
victims of the breach whole.  Clews v. Jamieson, supra,
at 479-480; J. Hill, supra, at *522; G. Bogert & G.
Bogert, supra, 862; see also United States v. Mitchell,
463 U. S. 206, 226 (1983); Massachusetts Mutual Life Ins.
Co. v. Russell, 473 U. S. 134, 154, n. 10 (1985) (Brennan,
J., concurring in judgment).
  Given this history, it is entirely reasonable in my view
to construe 502(a)(3)'s reference to -appropriate equitable
relief- to encompass what was equity's routine remedy for
such breaches-a compensatory monetary award calculated
to make the victims whole, a remedy that was available
against both fiduciaries and participating nonfiduciaries.
Construing the statute in this manner also avoids the
anomaly of interpreting ERISA so as to leave those
Congress set out to protect-the participants in ERISA-
governed plans and their beneficiaries-with -less protec-
tion . . . than they enjoyed before ERISA was enacted.-
Firestone, 489 U. S., at 114.  Indeed, this is precisely
how four Justices of this Court read 502(a)(3)'s reference
to -appropriate equitable relief- in Russell.  See 473 U. S.,
at 154, and n. 10 (Brennan, J., joined by White, Mar-
shall, and Blackmun, JJ., concurring in judgment).

                     II
  The majority, however, struggles to find on the face of
the statute evidence that 502(a)(3) is to be more nar-
rowly construed.  First, it observes that ERISA elsewhere
uses the terms -remedial relief- and -legal relief- and
reasons that Congress must therefore have intended to
differentiate between these concepts and -equitable relief.-
Second, it is noted that the crucial language of 502(a)(3)
describes the available relief as equitable relief.  It is then
asserted that -[s]ince 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,- rendering Congress' imposition of the
modifier -equitable- a nullity.  Ante, at 9-10 (emphasis in
original).  Searching for some way in which to give
-appropriate equitable relief- a limiting effect, the majority
feels compelled to read the phrase as encompassing only
-those categories of relief that were typically available- in
the broad run of equity cases, without regard to the
particular equitable remedies available in trust cases.  See
id., at 8 (emphasis in original).  This would include
injunction and restitution, for example, but not money
damages.  See ibid.  As I see it, however, the words
-appropriate equitable relief- are no more than descriptive
and simply refer to all remedies available in equity under
the common law of trusts, whether or not they were or
are the exclusive remedies for breach of trust.
  I disagree with the majority's inference that by using
the term -legal . . . relief- elsewhere in ERISA, Congress
demonstrated a considered judgment to constrict the relief
available under 502(a)(3).  To be sure, 502(g)(2)(E) of
the statute empowers courts to award appropriate -legal
or equitable relief- where a fiduciary successfully sues an
employer for failing to make required contributions to a
-multiemployer plan.-  1132(g)(2)(E).  Likewise,
104(a)(5)(C) authorizes the Secretary of Labor to bring
-a civil action for such legal or equitable relief as may be
appropriate- to force the adminstrator of an employee
benefit plan to file certain plan documents with the
Secretary.  29 U. S. C. 1024(a)(5)(C).  And, finally,
4003(e)(1) and 4301(a)(1) of the statute, also cited by
the majority, empower courts to dispense -appropriate
relief, legal or equitable or both,- in actions brought by
the Pension Benefit Guaranty Corporation (PBGC) or by
plan fiduciaries, participants, or beneficiaries with respect
to the peculiar statutory duties relating to the PBGC.  29
U. S. C. 1303(e)(1); see also 1451(a)(1) (authorizing -an
action for appropriate legal or equitable relief, or both-).
Significantly, however, none of the causes of action
described in these sections-relating to the financing of
-multiemployer plans,- administrative filing requirements,
and the PBGC-had any discernible analogue in the com-
mon law of trusts.  Accordingly, there being no common-
law tradition either in law or in equity to which Congress
might direct the courts, it is not at all surprising that
Congress would refer to both legal and equitable relief in
making clear that the courts are free to craft whatever
relief is most appropriate.  It seems to me a treacherous
leap to draw from these sections a congressional intention
to foreclose compensatory monetary awards under
502(a)(3) notwithstanding that such awards had always
been considered -appropriate equitable relief- for
breach of trust at common law.  See supra, at 4-5.
  Even accepting, however, that -equitable- relief is to be
distinguished from -legal- relief under the statute, the
majority is wrong in supposing that the former concept
swallows the latter if 502(a)(3)'s reference to -appropriate
equitable relief- is understood to encompass those reme-
dies that were traditionally available in the equity courts
for breach of trust.  The fact of the matter is that not all
forms of relief were available in the common-law courts
of equity for a breach of trust.  Although the equity courts
could award monetary relief to make the victim of a
breach of trust whole, extracompensatory forms of relief,
such as punitive damages, were not available.  As this
Court has long recognized, courts of equity would not-
absent some express statutory authorization-enforce
penalties or award punitive damages.  See Tull v. United
States, 481 U. S. 412, 422, and n. 7 (1987); Stevens v.
Gladding, 17 How. 447, 454-455 (1855); Livingston v.
Woodworth, 15 How. 546, 559-560 (1854); see also 2
J. Sutherland, Law of Damages 392, p. 1089 (3d ed.
1903); W. Hale, Law of Damages 319 (2d ed. 1912); 1 T.
Sedgwick, Measure of Damages 371, p. 531 (8th ed.
1891).  As Justice Kennedy has observed, this limitation
on equitable relief applied in the trust context as well,
where plaintiffs could recover compensatory monetary
relief for a breach of trust, but not punitive or exemplary
damages.  See Teamsters v. Terry, 494 U. S. 558, 587
(1990) (dissenting opinion).
  By contrast, punitive damages were among the -legal
remedies- available in common-law trust cases.  In those
trust cases that historically could have been brought as
actions at law-such as where a trustee is under an
immediate and unconditional duty to pay over funds to a
beneficiary, see ante, at 8, n. 6-it has been acknowledged
that the beneficiary may recover punitive as well as
compensatory damages.  See Fleishman v. Krause, Lindsay
& Nahstoll, 261 Ore. 505, 495 P. 2d 268 (1972) (reversing
and remanding for jury trial beneficiary's claim for
punitive and compensatory damages); Dixon v. North-
western Nat. Bank of Minneapolis, 297 F. Supp. 485
(Minn. 1969) (same).  Moreover, while the majority of
courts adhere to the view that equity courts, even in trust
cases, cannot award punitive damages, see Note, Partici-
pant and Beneficiary Remedies Under ERISA: Extra-
contractual and Punitive Damages After Massachusetts
Mutual Life Insurance Co. v. Russell, 71 Cornell L. Rev.
1014, 1029-1030 (1986); see also D. Dobbs, Remedies 3.9,
pp. 211-212 (1973), a number of courts in more recent
decades have drawn upon their -legal- powers to award
punitive damages even in cases that historically could
have been brought only in equity.  While acknowledging
the traditional bar against such relief in equity, these
courts have concluded that the merger of law and equity
authorizes modern courts to draw upon both legal and
equitable powers in crafting an appropriate remedy for a
breach of trust.  See I. H. P. Corp. v. 210 Central Park
South Corp., 16 App. Div. 2d 461, 464-466, 228 N. Y. S.
2d 883, 887-888 (1962), aff'd, 12 N. Y. 2d 329, 189 N. E.
2d 812 (1963); Gould v. Starr, 558 S. W. 2d 755, 771 (Mo.
App. 1977), cert. denied, 436 U. S. 905 (1978); Citizens &
Southern Nat. Bank v. Haskins, 254 Ga. 131, 136-137,
327 S. E. 2d 192, 199 (1985); see also New Jersey Divi-
sion, Horsemen's Benevolent Protective Assn. v. New Jersey
Racing Comm'n, 251 N. J. Super. 589, 605, 598 A. 2d
1243, 1251 (1991) (present-day Chancery Division can
-afford the full range of equitable and legal remedies for
breach of trust,- including punitive damages); cf. Charles
v. Epperson & Co., 137 N. W. 2d 605, 618 (Iowa 1965).
  Because some forms of -legal- relief in trust cases were
thus not available at equity, limiting the scope of relief
under 502(a)(3) to the sort of relief historically provided
by the equity courts for a breach of trust provides a
meaningful limitation and, if one is needed, a basis for
distinguishing -equitable- from -legal- relief.  Accord-
ingly, the statutory text does not compel the majority's
rejection of the reading of -appropriate equitable re-
lief- advanced by petitioners and the Solicitor General-a
reading that the majority acknowledges is otherwise
plausible, see ante, at 8.
                     III
  Although the trust beneficiary historically had an
equitable suit for damages against a fiduciary for breach
of trust, as well as against a participating nonfiduciary,
the majority today construes 502(a)(3) as not affording
such a remedy against any fiduciciary or participating
third party on the ground that damages are not -appropri-
ate equitable relief.-  The majority's conclusion, as I see
it, rests on transparently insufficient grounds.  The text
of the statute supports a reading of 502(a)(3) that would
permit a court to award compensatory monetary relief
where necessary to make an ERISA beneficiary whole for
a breach of trust.  Such a reading would accord with the
established equitable remedies available under the com-
mon law of trusts, to which Congress has directed us in
construing ERISA, and with Congress' primary goal in
enacting the statute, the protection of beneficiaries'
financial security against corrupt or inept plan misman-
agement.  Finally, such a reading would avoid the per-
verse and, in this case, entirely needless result of constru-
ing ERISA so as to deprive beneficiaries of remedies they
enjoyed prior to the statute's enactment.  For these
reasons, I respectfully dissent.