# Amicus Curiae Brief — Mertens v. Hewitt Associates > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385013_0265%3A09 ## Record - **Collection:** Supreme Court brief - **Document type:** Amicus Curiae Brief - **Published:** January 1, 1993 - **Citation:** 508 U.S. 248 ## Text No. 91-1671 4 nead eee oeesea SLEKA 3 In the Supreme Court of the Chuted States — Oc rorneR Terni, 1992 Witt tans J. MEbERTENS. ET AL... PETITIONERS Hewitt ASSOCIATES ON WRIT OF CERTIORARI TO THI UNITED STATES COURT OF APPEALS POR THE NINTH CIRCUIT BRIEF FOR THE UNITED STATES AS AMICUS CURIAE SUPPORTING PETLEIONERS Ki nnt itt W. STARR Solicitor General NTAUC REEN FO MAHONEY MARSHALL J. BRIEGER Deputy Solicitor General Solicuor of lLahor RONALD J. MANN ALT EN H. FELDMAN Issistant to the Solicitor General Associate Solicitor Department of Justice NATHANIEL T. Srirer HW ashington, D.C. 20530 Counsel for Appellat (202) 814-2217 l itivation NTARK S. FLYNN Wirornes Department of dl abhor HWashineton, 10.0 -20210 OUERSTION PRESENTED Whether a nonfiduciary who knowingly participates ina breach of a fiduciary duty imposed by the Employee Re tirement Income Security Act of 1974, 29 U.S.C. 1001 ef seq., 1S liable for losses that an employee benefit plan sus tains as a result of the breach. LABLE OF CONTENTS Interest of the United States . Statutory provisions involved Statement Summary of argument Argument: ERISA authorizes claims against nonfiduciaries who knowingly participate in fiduciary breaches __ A. B. 1). Section $02(a)(3) of ERISA authorizes federal courts to award “appropriate equitable relief ** *to redress * * * violations” of ERISA Appropriate equitable relief includes a monc- tary judgment requiring a nonfiduciary who knowingly participates in a breach of fiduct- ary duty to redress losses suffered by the plan asaresult ofthe breach. ......... 1. Traditional equitable principles provide make-whole relief to beneficiaries of a trust harmed by a nonfiduciary who par ticipates in a breach of trust .... tN The relief sought by petitioners 1s appro priate because it ensures that ERISA af- fords beneficiaries no less protection than they would have had in courts of equity before ERISA The availability of a civil penalty against non fiduciaries under Section S02(/) of ERISA demonstrates the propriety of awarding such relief under Section SO02(a)(3) This Court's decision in Massachusetts Mutual Life Insurance Co. v. Russell does not foreclose the claim for relef im this case (I1t) Page Nm hw A 10) 10 16 tN ty IV V Page Cases — Continued: Page FOOT CO Ep AE EEN eas 25 Nieto v. Ecker, 845 F.2d 868 (9th Cir. 1988)... .. 4, §, IE So io steiner la 10, 20, 22 Novak \. Andersen Corp., 962 &.2d 787 (8th Cir. TABLE OF AUTHORITIES 1992), petition for cert. pending, No. 92-352 ; ES ey ee os eee li Cases: Patterson \. Shumate, 112 S. Ct. 2242 (1992) |. . 20 Albemarle Paper Co. v. Moody, 422 U.S. 405 Pension Benefit Guaranty Corporation .. LTV SE bskcuneesadaceiesckousunuee eee 13 ig We rs CP IED wow cdccccpacncnuace 11, 2) Brock v. Gerace, 635 F. Supp. 563 (D.N.J. 1986) .. 18 Pilot Life Insurance Co. v. Dedeaux, 481 US. Brock v. Hendershott, 840 F.2d 339 (6th Cir. SE a se cc eke wae eee ees ee 17 DEE néek pheneeeackbeenaebcesnaae dene 10 ~ Seminole Nation v. United States, 316 U.S. 286 Cahall v. Lofland, 114 A. 224 (Del. Ch. 1921), DED Peau cess ch oe eae aaa moe 1S, 16 rk, Ce , I ns ei eck cena 16 Shaw \. Delta Aur Lines, Inc., 463 U.S. 85 (1983) 16 Central States, Southeast & Southwest Areas Sokol. Bernstein, 803 F.2d $32 (9th Cir. 1986) 1 Pension Fund v. Central Transport, Inc., 472 Thornton v. Evans, 692 &.2d 1064 (7th Cir. Ls GEE cc nccncnapnadeescaccsbnuhiaes il 1982) ra ates aha tahoe eae an eur 10 Diduck v. Kaszycki & Sons Contractors, Inc., 974 United States \. Wise, 370 U.S. 405 (1962) ~ 21 - » > _ ap rS ns ees 10, 17 Useden v. Acker, 947 F.2d 1863 (lth Cir 1991), Estate of Cowart v. Nicklos Drilling Co., 1128. Ct. petition for cert. pending, No. 91-1944 (filed Tt > fun Seas teaes Eaaa RnR eae aeaees 20 7 June 1, 1992) Pry fa 10, 13 Fink v. National Savings & Trust Co., 772 F.2d Wechsler ». Bowman, 34 N.E.2d 322 (NY. ee ee eae aidaw hs 10 1941) | 1s Firestone Tire & Rubber Co. v. Bruch, 489 U.S. Whitfield \. Lindemann, 853 &.2d 1298 (Sth Cir SN td Ce oes a eee a ao wis 11, 16, 17 IORR), cert. denied su/ nom. Klepak v. Dole, 490 First National Bank of Kingman v. Byrnes, 59 P. LS. 1OR9 (1989) ce ae ee oe 1. 10 I eo tan ae ee ae 15 HMhitford v. Reddeman, 219 NW Wl (Wis. Fort Halifax Packing Co. v. Coyne, 482 U.S. 1 | 1928) ; 16 PE nda ceases dnuedcdausee ots nee 17 | Ingersoll-Rand Co. v. McClendon, 111 S. Ct. 478 | Statutes: |) 14, 17, 25 Employee Retirement Income Security Act of 1974, Lessee of Smith v. McCann, 65 U.S. (24 How.) 29 U.S.C. 1001 et seq. 12 398 (1861) ............. Pet es Fe tees 13 | $8 1-608. 29US.C 1001-1168 y Massachusetts Mutual Life Insurance Co. v. § 1b). 291 S.C. 100K(b) | 16 Russell, 473 U.S. 134 (1985)... oe 7, 13, 22, 23, 24 § 414) B), 29 U.S.C. 100201408) 2 Mertens v. Black, 948 F.2d 1105 (9th Cir. 1991). . 3 § 10%d). 29U S.C. 102d) 1 Moskal v. United States, 111 S. Ct. 461 (1990)... 19, 24 S WIAcMIWB), I9U SC. LORWeEMIMB) 2 Vi § 2101(a), 103 Stat. 2123 Statutes Continued: Page §§ 401-414, 29 U.S.C. HOL-1114 R § 404, 29U S.C. 1104 8 § 406, 29U. S.C. 1106 ........ 18 § 406(a 10), 29 USC. 1106taM TO) 3 § 408(b)(2), 29 USC. LLOR(by2) | 3 § 409, 29U S.C. 109... : 8,9, 19, 23,24 § 409(a), 29 U.S.C. 1109¢a) 8, 9, 22, 23, 24 § 412, 29U.S.C. 1112 ...... 8 §§ SOL-SIS, 299US.C. PEAE-114S e) } & — 5 of ee 0) § $02, 29U.S.C. 1132 ...... camennne &, 9 § SO2(a), 29 US.C. 1132fa) . —_, §, 7,9, 23 § SO2(aM 1B), 29US.C. 132taM ti MB). 22). (7, 22 § S02(aK2), 29 U.S.C. 1132(aM2) ........ 7,9, 19, 22 § S02(ax3), 29 USC. 1132(and) -... passim § §02(aWS), 29US.C. 1132(anS) | 7, 8, 19, 22 § S020), 29 U.S.C. 1132) (Supp. IE 1290) 8, 64, 7, 18 § S021), 29 USC. 11320)01) (Supp. 1990) . SN an ee ee ee 18 § SO2UMIMA), 29 U.S.C. TER20 IA) (Supp. I} 1990) | oan i? 7 §$ S021 0B), 29 USC. 11320)01)0B) (Supp. 11 1990) _. ep ep | 7 § S020 420 B), 29 U.S.C. 113202) B) (Supp. UN fare i at 7 7,19 § S14(a), 29U S.C. 1144¢a) me Internal Revenue Code: 26 U.S.C. 4975 0 26 U.S.C. 497S(a) |. 20 26 U.S.C. 497S%(b) 20 26 U.S.C. 4975(h) |. 20 Omnibus Budget Reconciliation Act of 1989, Pub. 1. No. 101-239, 103 Stat. 2106: § 2101, 103 Stat. 2123 | 20 S Vil Miscellaneous: Pave Black's Law Dictionary (6th ed. 1990) 1-11 3 Wilham Blackstone, Conmmnentartes on the Laws of England 13, 14 George Gleason Bogert & George Taylor Bovert, The Law of Trusts and Trustees (2d ed. tev. 19R2) 13,15, 16 Su Edward Coke, The First Part of the Institutes of the Laws of Eneland 13 120 Cong. Rec. 29,932 (1974) 16 135 Cong. Rec. H6006 (daily ed. Sept. 27, 1990) 21 HR. 3299, 1O1st Conge., Ist Sess. (1989) 2) HER. Rep. No. 247, 1Otst Cong., Ist Sess. (1989) 2! b.W. Manland, Equity (2d ed. 1936) 14 4 John Norton Pomeroy, A Treatise on Equits Jurisprudence (Spencer W. Symons Sth ed 1941) 14, 1S Restatement (Second) of Trusts (1959): Vol J 12 Vol 2 14, 18 S. Rep. No. 383, 93d Cong... Ist Sess. (1973) 1] Austin Wakeman Scott, Participation in a Breach of Trust, 34 Wars 1. Rev 454(1921) 1S, 16 Austin’ Wakeman Scott & William Franklin bratcher, The law of Trusts (4th ed. 1988) Vol. 3 13 Vol. 4 1s 2 Joseph Story, Commentaries on Equity Jurts prudence (WEL Lyon, Ir 14th ed. 1918) 13 In the Supreme Court of the Chuted States Oc ropER TERM, 1992 No. 91-1671 Witt tant J. MERTENS. ET AL. PETITIONERS v. Hewitt ASSOCIATES ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS POR THE NINTH CIRCUIT BRIEF FOR THE UNITED STATES AS AMICUS CURIAE SUPPORTING PETITIONERS INTEREST OF THE UNITED STATES This case presents the question whether courts may en- force the fiduciary responsibility provisions of the Em- ployee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. 1001 ef seq., against a nonfiduciary who know- ingly participates in a violation of ERISA’s fiduciary duties. The Secretary of Labor has primary enforcement authority for the fiduciary provisions of Title | of ERISA and has filed numerous ERISA actions seeking to impose liability on nonfiduciaries for participation in breaches of fiduciary duties imposed by ERISA. See, e.g., Whitfield v. Lindemann, 853 &.2d 1298 (Sth Cir. 1988), cert. denied sub nom. Klepak v. Dole, 490 U.S. 1089 (1989). As we ex- plained in our brief filed at the petition stage at the Court's (1) ty invitation, the court of appeals’ ruling unduly restricts ERISA’s enforcement provisions. Because the Court’s dis- position of the case ts likely to have a significant effect on the enforcement of ERISA, the Secretary has a substantial interest in this case. STATUTORY PROVISIONS INVOLVED The pertinent provisons of ERISA are reproduced in the Appendix to this brief, infra, la-3a. STATEMENT 1. Petitioners are former employees of the Kaiser Steel Corporation and participants in the Kaiser Steel Retire- ment Plan, a qualified pension plan under the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. 1001 et seq.' In 1980, while respondent was serving as the plan's actuary, Kaiser began to phase out its steel- making operations. That action resulted in the early re- tirement of a large number of employees. Respondent, however, continued to use actuarial assumptions that did not reflect the increased costs the early retirements would impose on the plan. As a result, Kaiser did not adequately fund the plan, and plan assets became insufficient to satisfy benefit obligations. By early 1987, the Pension Benefit Guaranty Corporation (PBGC) had determined that the plan was underfunded and incapable of paying its liabilities. The PBGC terminated the plan and began pay- ing its participants substantially reduced benefits. J.A. 3-7; see Pet. App. A2-A3, A17-Al8. 2. In December 1989, petitioners filed this action alleging that respondent had violated ERISA and state ' This case was decided on a motion to dismiss and therefore the allegations of petitioners’ complaint are taken as true. See Pet. App A2, Al9 malpractice law. Petitioners claimed that respondent had caused losses to the plan by allowing Kaiser to set actuarial assumptions, failing to disclose that it served as an actuary for both Kaiser and the plan, and failing to disclose the plan’s funding inadequacies.? Petitioners argued that respondent violated ERISA by breaching respondent's professional duties to the plan’ and by participating in an unlawful party-in-interest transaction.* When respondent moved to dismiss the complaint for failure to plead causes of action cognizable under ERISA, petitioners advanced several legal theories: (1) that respondent was an ERISA fiduciary that breached its fiduciary duties; and (2) that even if respondent was not a fiduciary, it was liable under > Petitioners also filed suit against members of the Investment C onynittee of the Kaiser Steel Retirement Plan, alleging that they had violated their fiduciary duties. See Mertens v. Black, 948 F.2d 1105 (9h Cir. 1991) (upholding district court's refusal to dismiss peti- toners’ claims against investment committee members). ‘ ERISA imposes various requirements concerning actuarial ser- vices. See, e.g., 29U.S.C. 102% d) (certain ERISA plan administrators must prepare annual reports including statements by enrolled actu- aries) and 1OR2(c) 3B) (costs, liabilities, interest rates, and other fac- tors are to be calculated on the basis of “reasonable” actuarial assump- tions that offer the actuary’s “best estimate of anticipated experience under the plan”). Petitioners alleged that respondent's actions in pro. viding actuarial services did not comply with the obligations set forth in ERISA and implementing regulations. J A. 9-13. * ERISA forbids various transactions between a plan and a “party in interest,” including the furnishing of services. 29 US.¢ 11O06(an IMC). The statute defines the term “party im interest” to im clude a “person providing services to [the] plan.” 29 U.S.C 1002014) B), but exempts from the prohibitions of Section 1106 any service contract for which “no more than reasonable compensation is paid.” 29U S.C. PLOR( bx 2). Petitioners claimed that respondent's fees were not “reasonable” because respondent's conflict of interest pre vented it from providing adequate services to the plan. J.-A. 13-14 4 ERISA (a) for breaching nonfiduciary duties imposed on an actuary by ERISA or (b) for knowing participation in a breach of duty by a fiduciary. J.A. 9-14; see Pet. App. A2-A4. The district court dismissed all of petitioners’ claims. Pet. App. Al7-A30.° The court dismissed the claim that respondent itself was a fiduciary based on its conclusion that professional service providers such as actuaries, at- torneys, and accountants do not act as fiduciaries when they perform their ordinary duties. /d. at A20-A22. The court also dismissed petitioners’ claim for monetary relief based on respondent's alleged violation of its actuarial duties. In the court's view, Section 502(a)(3) of ERISA, 29 U.S.C. 1132(a)(3), would not allow that type of relief because petitioners had not alleged that respondent had profited from the alleged violation. Pet. App. A23-A2S. The court also rejected petitioners’ “prohibited trans- action” claim, which it characterized as merely an effort to recast the claimed breach of professional duty as a pro- hibited transaction. /d. at A25-A26. Finally, the court dis- missed petitioners’ claim that ERISA created a right of recovery against respondent as a knowing participant in a fiduciary breach, based on the Ninth Circuit's decision in Nieto v. Ecker, 845 F.2d 868 (1988), which held that ERISA bars such an action.® Pet. App. A22. ‘ The Pension Benefit Guaranty Corporation (PBGC) was named as a defendant in its capacity as the plan's statutory trustee. It answered and filed a cross-claim asserting that any recovery by pet: tioners should be paid to it. When the district court dismissed the ac tion, it also dismissed the PBGC's cross-claim. See Pet. n * The district court also held that petitioners’ pendent state-law claim for professional negligence was barred by the State's two-year statute of limitations. Pet. App. A26-A27 4) 3. The court of appeals affirmed with respect to the ERISA claims.’ Pet. App. Al-A13. With respect to the claim now at issue, the court relied on its holding in Nieto that ERISA “limits its coverage to fiduciaries, and nothing in the statute provides any support for holding others liable.” Jd. at A7 (quoting Nieto, 845 F.2d at 871). The court also rejected (Pet. App. A8-AQ) petitioners’ argu- ment that the Omnibus Budget Reconciliation Act of 1989 (OBRA), Pub. L. No. 101-239, § 2101(a), 103 Stat. 2123, demonstrates that Section 502(a) authorizes a remedy against nonfiduciaries for knowing participation in a breach of fiduciary duty. OBRA amended ERISA to add Section S02(/), 29 U.S.C. 1132() (Supp. 1 1990) (App., in- fra, 2a-3a), which authorizes the Secretary of Labor to assess a civil penalty against fiduciaries and “other per- son{s]” for a breach of fiduciary duty under ERISA or for “knowing participation” in such a breach. The court noted that Section 1132(/) applies only to the Secretary, and noted that the Congress that passed OBRA considered, but did not adopt, an amendment that explicitly would have overturned the result in Nieto. Pet. App. A8-A9.* SUMMARY OF ARGUMENT 1. Section $02(a)(3) of ERISA grants any beneficiary of a plan covered by ERISA the right to sue for any “equi- table relief that is “appropriate * * * to redress * * * vio- ’ The court reversed the trial court's ruling that petitioners’ state law professional negligence claim was barred by the statute of limita tions. Pet. App. AlI-Al}3. * Petitioners filed a petition for rehearing with a suggestion of re hearing en banc, supported by the Secretary of Labor as an amicus curiae, urging the Ninth Circuit to overrule Nieto. The court of ap peals demed the petition and rejected the suggestion for rehearing en hance. Pet. App. AIS-Al6 6 lations fof 29 U.S.C. 1001-1168 or the plan].” 29 U.S.C. 1132(a)(3). The sole issue in this case is whether the relief petitioners seek —to be made whole for losses they suf- fered because of a breach of fiduciary duty in which re- spondent is alleged to have knowingly participated — is “appropriate equitable relief to “redress” that breach. 2. Principles of equity traditionally applicable to cases involving trusts support petitioners’ claim. First, courts of equity regularly awarded make-whole monetary damages to beneficiaries to redress violations of a breach of trust. Although such damages resemble compensatory damages awarded in courts of law, the equitable status of trusts historically made courts of equity the only forum autho- rized to provide such redress. Second, courts of equity did not limit beneficiaries’ remedies to those against the trust's fiduciary, but also ordered third parties who knowingly participated in the breach of fiduciary duty to compensate beneficiaries for resulting losses. Hence, the relief sought by petitioners would have been available as a matter of course In a case in equity arising before ERISA’s enact- ment. But the broad preemption provision set forth in Section Si4(a) of ERISA preempts all state laws that “relate to” any covered plan. Because the scope of the fiduciary duties with respect to an ERISA plan is now exclusively a matter of federal law, the States are no longer able to afford relief for breaches of fiduciary duty that involve an ERISA plan. Unless the general provision of Section S02(a)(3) provides the relief formerly available in courts of equity, ERISA will have left beneficiaries in a worse position than they were prior to ERISA’s enactment. In light of ERISA’s open-ended authorization to award “equitable relief in Section $02(a)(3), ERISA should not be construed to re- quire such a result. 3. Section $02(/) of ERISA, 29 U.S.C. 1132(/) (Supp. Il 1990), confirms that ERISA did not abolish the equi- table liability of nonfiduciaries. That provision explicitly authorizes the Secretary to seek a civil penalty not only for breach of fiduciary duty by “a_ fiduciary,” Section SO2(/)(1)(A), but also for “knowing participation in such a breach * * * by any other person,” Section 502(/)(1)(B). Moreover, Section S02(/)(2)(B) defines the civil penalty to be assessed by the Secretary in terms of the amounts obtained in suits brought by the Secretary against “other person[s]” under Section S02(a)(S) of ERISA. Section 502(/) thus is premised on the Secretary of Labor's ability to secure, as “other appropriate equitable reliet * * * to redress such violation” under Section 502(a)(S), a make- whole monetary recovery against nonfiduciarics who knowingly participate in a breach of fiduciary duty. Be- cause the right of action granted to the Secretary by Sec- tion 502(a)(S) is coextensive with the private right of action under Section 502(a)(3) at issue in this case, the reference in Section $02(/) to suits against “other person[s]” demon- Strates that Section 502(a)(3) must permit such suits against persons other than a fiduciary. 4. Finally, the relief sought by petitioners is not incon- sistent with this Court's decision in Massachusetts Mutual Life Insurance Co. v. Russell, 473 U.S. 134 (1985). The Court in Russell held that a participant could not receive damages under Section S02(a)(2) for bad-faith processing of her claim for benefits, in excess of the damages avail- able to her under the express terms of Section S02(a)(1)(B). The plaintiff in that case relied expressly on Section $02(a)(2), and the Court explicitly Jeclined to consider the availability of relief under any other provision of ERISA. 473 U.S. at 139 nS. Moreover, reading Russell to preclude courts from granting any remedies beyond the specific remedies de- fined in detail in Section S02(a) would nullify the general provisions for “appropriate equitable relief” set forth in Sections 502(a)(3) and 502(a)(5). Section S02 establishes a comprehensive enforcement scheme, with several remedies outlined in detail and two general provisions directing courts to develop remedies in light of underlying equitable principles. A ruling that relief is invariably limited to the basic remedies would contravene the language and struc- ture of the statute as a whole. ARGUMENT ERISA AUTHORIZES CLAIMS AGAINST NONFIDUCTH- ARIES WHO KNOWINGLY PARTICIPATE IN FIDUCIARY BREACHES A. Section $02(a}(3) of ERISA Authorizes Federal Courts To Award “Appropriate Equitable Relief * * * To Redress* * * Violations” of ERISA Part 4 of Title | of ERISA, 29 U.S.C. 1101-1114, titled “Fiduciary Responsibility,” imposes a series of duties on fiduciaries who administer employee benefit plans. For ex- ample, Section 404, 29 U.S.C. 1104, enumerates certain fiduciary duties; Section 406, 29 U.S.C. 1106, specifies certain prohibited transactions; and Section 412, 29 U.S.C. 1112, establishes bonding requirements for of- ficials who handle plan assets. In turn, Section 409 of ERISA, 29 U.S.C. 1109, authorizes three specific remedies against fiduciaries who breach those duties. First, a fiduciary is “personally liable to make good to [the] plan any losses * * * resulting from each * * * breach” of fiduciary duty. 29 U.S.C. 1109(a). Second, a court may order a breaching fiduciary to “restore to [the] plan any profits of such fiduciary which have been made through use of assets of the plan by the fiduciary.” /bid. Third, a fiduciary “shall be subject to such other equitable or remedial relief as the court may deem appropriate, in- cluding removal of such fiduciary.” /hid. 9 Part S of Title | of ERISA, 29 U.S.C. 1131-1145, titled “Administration and Enforcement,” sets forth the general remedial framework for Title l of ERISA. Section S01, 29 U.S.C. 1131, establishes criminal penalties; Section $02, 29 U.S.C. 1132, authorizes six different civil actions, described in the six numbered paragraphs of subsection 502(a). This case involves the second and third of those six paragraphs. The second paragraph, 29 U.S.C. 1132(a)(2), authorizes an action “for appropriate relief under [Section 409].” The third paragraph, on which petitioners’ action rests, permits an action “by a participant, beneficiary, or fiduciary (A) to enjoin any act or practice which viclaies any provision of this subchapter or the terms of the plan or (B) to obtain other appropriate equitable relief (i) to redress such violations.” 29 U.S.C. 1132(a)(3). By contrast to Sections 409 and 502(a)(2)— provisions limited by their terms to relief against “[aJny person who is a fiduciary,” 29 U.S.C. 1109(a)—nothing in Section $02(a)(3) limits the class of permissible defendants. Hence, the language of Section $02(a)(3) establishes a general cause of action, available to any “participant, beneficiary, or fiduciary,” for any “equitable relief” that is “appro- priate * * * to redress * * * violations [of subchapter | or the plan].” Because (i) it is undisputed that petitioners were “participants” in the plan and (ii) petitioners have alleged that the actions in which respondents participated violated a “provision of thle] subchapter”® or the terms of the plan, the sole issue before the Court is whether “appro- priate equitable relief” includes the relief sought by peti- tioners: recovery from a nonfiduciary of losses a plan suf- fers because of a fiduciary breach in which the nonfiduci- ary knowingly participated. For the reasons discussed be- * Section $02 appears in Subchapter | of Chapter 18 of Title 29, which includes 29 tL S.C LOOL-1T1OR 10 low, we believe —as do the majority of the courts of ap- peals'® —that it does. B. Appropriate Equitable Relief Includes a Monetary Judg- ment Requiring a Nonfiduciary Who Knowingly Par- ticipates in a Breach of Fiduciary Duty To Redress Losses Suffered by the Plan as a Result of the Breach Under traditional equitable principles, the relief sought by petitioners would have been available before ERISA. Because ERISA preempts the remedies traditionally available under state laws that relate to covered employee benefit plans—whether based on a statute or common law —a conclusion that Section 502(a)(3) does not provide the relief sought in this case would require the conclusion that Congress intended to curtail that traditional form of relief when it acted to protect employee benefit plans in passing ERISA. That conclusion is untenable. 1. Traditional equitable principles provide make-whole relief to beneficiaries of a trust harmed by a non- fiduciary who participates in a breach of trust “ERISA abounds with the language and teri.sinology of trust law”; as a result, courts are to consult “general prin- ciples of trust law” developed by courts of equity'' to de- '© See Diduck v. Kaszvcki & Sons Contractors, Inc., 974 F.2d 270, 279-281 (2d Cir. 1992); Whitfield v. Lindemann, 853 F.2d 1298, 1303 (Sth Cir. 1988), cert. denied sub nom. Klepak v. Dole, 490 U.S. 1089 (1989); Brock v. Hendershott, 840 F.2d 399, 442 (6th Cir. 1988), Thornton v. Evans, 692 F.2d 1064, 1078 (7th Cir. 1982); see also Fink v. National Savings & Trust Co., 772 F.2d 951, 9588 (D.C. Cir, 1985S) (dictum). But see Nieto v. Ecker, 845 F.2d 868, 870-873 (9th Cir. 19RR); Useden v. Acker, 947 F.2d 1863, 1882 (1ith Cir. 1991), petition for cert. pending, No. 91-1944 (filed June 1, 1992) '' It should be beyond dispute that the reference to “equitable relief™ refers to relief available in courts of equity. See Black's law termine what types of “equitable relief” are “appropriate” to “redress” violations under Section $02(a)(3). Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 110, 115 (1989); see Central States, Southeast & Southwest Areas Pension Fund v. Central Transport, Inc., 472 U.S. 559, 570 (1985) (courts should consider “the common law of trusts”). Two of those principles demonstrate that the relief sought by petitioners is “appropriate equitable relief”: courts of equity awarded make-whole monetary relief to redress a breach of trust; and courts of equity awarded relief against a nonfiduciary who participated in a breach of trust by a fiduciary.'? Dictionary $39 (6th ed. 1990) (defining “equitable relief” as “[t}hat species of relief sought in a court with equity powers”). '? The Eighth and Ninth Circuits have stated that the reference in Section S02(a3) to “other appropriate equitable relief” should be construed to include only three categories of relief: injunctions to pre- vent violations of fiduciary duty, imposition of a constructive trust on plan assets, and removal of trustees. See, e.g., Sokol v. Bernstein, 803 F.2d $32, S38 (9th Cir. 1986); Nowak v. Andersen Corp., 962 F.2d 757, 760 (8th Cir. 1992), petition for cert. pending, No. 92-352 (filed Aug. 26, 1992). Those decisions rely to a significant degree on the fact that the Senate Report offers those three types of relief as examples of appropriate equitable relief. See S. Rep. No. 383, 93d Cong., Ist Sess. 105-106 (1973). There is no indication in the report, however, that the passage was intended as an exhaustive catalogue of the types of relief that would be available under Section $02(a)3); indeed, the relevant passage begins with the phrase “[flor example.” /d. at 105. The best guide for determining what types of relief should be available is the Statutory language — which refers generally to the readily compre- hensible concept of “equitable relief — not a list of examples offered in the legislative history. See Pension Benefit Guaranty Corporation \ LTV Corp., 4996S) 633, 649 (1990) 12 a. In the realm of trust law, make-whole monetary relief has long been a traditional equitable remedy. The Second Restatement of Trusts illustrates this conclusion. Section 199 sets forth the “equitable remedies” available to the beneficiary of a trust. The third of these, set forth in Section 199(c), allows the beneficiary “to compel the trustee to redress a breach of trust.” | Restatement (Sec- ond) of Trusts 437 (1959). The comment to Section 199(c) explains that the suit to gain redress should be governed by Section 205 of the Restatement, see id. comment c, at 438, which permits an award of monetary relief by making the trustee liable for any “loss” to the trust caused by a breach of fiduciary duty.'* Indeed, each of the ten illustrations in the comments to Section 205 involves a monetary award against the trustee. /d. comments c-h, at 459-462.'4 Moreover, it is clear that the monetary relief available under Section 20S included a right to “make-whole” damages. Comment a explains that the beneficiary has a number of options, one of which is “the option * * * of pursuing a remedy which will put him in the position in which he would have been if the trustee had not committed the breach of trust.” 1 Restatement (Second) of Trusts 458 (1959). Thus, “the general rule fis] that the object of damages is to make the injured party whole, that is, to put '* Section 205 provides that a trustee who has committed a breach of trust “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.” | Re- statement (Second) of Trusts 458. ‘* For example, Ilustration § provides: “A is trustee of $10,000 in cash. He deposits the money in a bank which he knows or has reason to know is insolvent. The bank fails and A recovers only $4000 from the bank. A is liable for the loss.” 1 Restatement (Second) of Trusts 489 13 him in the same condition in which he would have been if the wrong had not been committed and the trustee had done his duty. Both direct and consequential damages may be awarded.” George Gleason Bogert & George Taylor Bogert, The Law of Trusts and Trustees § 701, at 198 (2d ed. rev. 1982) [hereinafter Bogert & Bogert] (footnote omitted) (liability for breach of investment duties): see Russell, 473 U.S. at 187 (Brennan, J., concurring); see also Albemarle Paper Co. v. Moody, 422 U.S. 408, 418-419 (1975) (application of similar principles of equity to Title VII). As the materials discussed above demonstrate, respond- ent errs in suggesting (Br. in Opp. 8-9) that the make- whole relief requested by petitioners constitutes a “damage[s]” remedy not cognizable in equity.'’ “Trusts are, and have been since they were first enforced, within the peculiar province of courts of equity.” 3 Austin Wake- man Scott & William Franklin Fratcher, The Law of Trusts § 197, at 188 (4th ed. 1988) [hereinafter Scott & Fratcher].'© Thus. although a beneficiary's action to '* Respondent's analysis resembles the analysis of the Eleventh Cir cuit in Useden v. Acker, 947 F.2d 1563, 1880 (1991), petition for cert pending, No. 91-1944 (filed June 1, 1992). '* See Lessee of Smith v. McCann, 658 U.S. (24 How.) 998, 407 (1861) (equity has “exclusive jurisdiction of trusts and trust estates”); 2 Joseph Story, Commentaries on Equity Jurisprudence § 1302, at 648 (WH. Lyon, Ir. 14th ed. 1918) (“For the most part indeed matters of trust and confidence are exclusively cognizable in Courts of Equity: there being few cases except bailments, and rights founded in contract * * *in which a remedy can be administered in the Courts of Law.”): 3 William Blackstone, Commentaries on the Laws of England *43\ (“fraud, accident, and trust are the proper and peculiar objects of a court of equity”); Sir Edward Coke, The First Part of the Institutes of the Laws of England § 464, at 272b* (beneficiary of trust “had no remedie by the common law, but for breach of trust, his remedie was only by subpoena in chancerie”) 14 recover losses resulting from a breach of duty superficially resembles an action at law for damages, such relief tradi- tionally has been obtained in courts of equity.'’ Hence, hecause that relief is, by definition, “equitable relief,” there is no reason it should not be available in an action under Section S02(a)(3) of ERISA, 29 U.S.C. 1132(a)(3). See Ingersoll-Rand Co. v. McClendon, 1118S. Ct. 478, 486 (1990) (noting that “there is no basis in § 502(a)’s language for limiting ERISA actions to only those which seek ‘pen- sion benefits,’ " and explaining that “[i]t is clear that the relief requested” in that case — which included a prayer for compensatory damages—“is well within the power of federal courts to provide” under ERISA). b. It also is clear that equitable remedies for a breach of trust included monetary awards against nonfiduciaries who knowingly participated in a breach of trust. Again, the Second Restatement of Trusts is explicit. Section 326 provides that “[a] third person who * * * has notice that the trustee is committing a breach of trust and participates therein is liable to the beneficiary for any loss caused by the breach of trust.” 2 Restatement (Second) of Trusts 124 '* See, e.g., 4 John Norton Pomeroy, A Treatise on Equity Juris prudence § 1080, at 229 n.18 (Spencer W. Symons Sth ed. 1941) [here inafter Pomeroy] (explaining that the equitable liability for breach of trust is “of the same nature as that arising from breach of contract”); 3 William Blackstone, Commentaries on the Laws of England *4%9 (“The form of a trust * * * gives the courts of equity an exclusive jurisdiction as to the subject-matter of all settlements and devises in that form, * * * but the trust is governed by very nearly the same rules, as would govern the estate in a court of law, if no trustee was in terposed.”); see also F.W. Maitland, Equity 110-111 (2d ed. 1936) (ex plaining that the historical reason trusts were not enforced at law ap parently was that “the Chancellors were beforehand in this matter and, by giving a far more perfect remedy than the common law courts could give, made any remedy in those courts unnecessary”) 1S (1959).'* This Court also has recognized that principle. Seminole Nation vy. United States, 316 U.S. 286, 296 (1942) (“It is a well established principle of equity that a third party who pays money to a fiduciary for the benefit of the heneficiary, with the knowledge that the fiduciary intends to misappropriate the money or otherwise be false to his trust, is a participant in the breach of trust and liable therefor to the beneficiary.”).'? Thus, if a trustee’s agent knowingly participates and assists in a breach of fiduciary duty, the agent could be held liable for losses arising from the breach. See, e.g., 4 Scott & Fratcher, supra, § 326.4, at 310-313; 2 Restatement (Second) of Trusts, supra, § 326 comment a, at 124. Allegations such as those made by petitioners —that an actuary knowingly participated in a breach of fiduciary duty while acting as the fiduciary’s '* Treatises and commentators uniformly have supported this view as well. Bogert & Bogert, supra, § 9O1, at 257 ("[ The beneficiary, as equitable owner of the trust res has the right that third persons shall not knowingly join with the trustee in a breach of trust."); 4 Scott & Pratcher, supra, § 326.8, at 314 (“Wher ‘be third person knowingly and actively participates in the breach of vere 1s no difficulty in holding him liable.”); Austin Wakeman |, Participation in a Breach of Trust, 34 Wary. 1. Rev. 454, 481 (1921) [hereinafter Scott} (“If third persons knowingly participate with a fiduciary in a breach of his obligations it is proper to hold them liable."); 4 Pomeroy, supra, § 1080, at 230: ("If third persons are parties to a breach of trust, thes are equally lable with the trustee.”). '* State court decisions also have recognized this principle. See, ee, first National Bank of Kineman v. Byrnes, 89 Po 1056, 1058 (Kan. 1900) ("As a general principle, all persons who knowingly par Hicipate or aid in committing a breach of trust are responsible for the wrong, and may be compelled to make good the loss."); Wechsler \ Bowman, 34 N.E.2d 422, 326 (N_Y. 1941) (The principle of law which the plaintiff urges has been reiterated by this court many times Any one who knowingly participates with a fiduciary in a breach of trust ts hable for the full amount of the damage caused thereby to the cesturs que trust") 16 agent — accordingly would be sufficient to state a cause of action in equity under traditional principles of trust law.?° 2. The relief sought by petitioners is appropriate because it ensures that ERISA affords beneficiaries no less protec- tion than they would have had in courts of equity before ERISA As this Court has explained, “ERISA was enacted ‘to promote the interests of employees and their beneficiaries in employee benefit plans.’ ” Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 113 (1989) (quoting Shaw v. Delta Aur Lines, Inc., 463 U.S. 85, 90 (1983)); see 29 U.S.C. 1L001(b) (“[ T]he policy of [ERISA is] to protect * * * the in- terests of participants in employee benefit plans and their beneficiaries.”).?' Thus, the Court has been reluctant to interpret ERISA in a way that “would afford less protec- ** There is no doubt that the cause of action lies in equity. See, e.2., Seminole Nation, 316 U.S. at 296; Scott, supra, 34 Harv. L. Rev. at 454 (“Anyone who participates with a trustee in a breach of trust may be held liable in a court of equity. * * * [I)f he has never received or no longer holds the trust property or its proceeds, he may be held liable in equity for damages.”); Bogert & Bogert, supra, § 901, at 257 (rights of beneficiary rest on status “as equitable owner of the trust res”); Cahall \. Lofland, 114 A. 224, 237 (Del. Ch. 1921) (One who participates with a trustee in a breach of trust may be held liable in a court of equi- ty"), aff'd, 118 A. 1 (Del. 1922); Whitford v. Reddeman, 219 NW. 361, 368-366 (Wis. 1928) (“[ T]he power to compel an accounting by a trustee, and to hold those liable with him for mismanagement of the trust are well-recognized and well-defined powers of a court of equity.”). ** The legislative history underscores this purpose. See 120 Cong Rec. 29,932 (1974) (remarks of Sen. Williams) (the objectives of ERISA’s fiduciary-related provisions “are to make applicable the law of trusts; * * * to establish uniform fiduciary standards to prevent transactions which dissipate or endanger plan assets; and to provide effective remedies for breaches of trust”) 17 tion to employees and their beneficiaries than they enjoyed before ERISA was enacted,” Firestone, 489 U.S. at 114, and has never interpreted ERISA to circumscribe the equl- table remedies available at common law. Adopting the rule established by the court of appeals, however, would do just that. With exceptions not relevant here, Section S14(a) of ERISA preempts “any and all State laws insofar as they may now or hereafter relate to any [covered] employee benefit plan.” 29 U.S.C. 1144(a). Hence, ERISA preempts any cause of action dependent on proof that the defendant participated in a breach of a fiduciary duty to an ERISA plan, because any such cause of action would “relate to” the plan by considering the duties imposed on fiduciaries of the plan. See Ingersoll-Rand Co. v. McClendon, 111 S. Ct. 478, 483 (1990) (cause of action for wrongful termina- tion to avoid paying benefits is preempted); Pilot Life In- surance Co. v. Dedeaux, 481 U.S. 41, 47-48 (1987) (common-law causes of action based on improper proc- essing of a claim for benefits “undoubtedly meet the criteria for pre-emption”). Hence, ERISA leaves the States powerless to provide beneficiaries with a state-law remedy against nonfiduciaries. Any right of recovery dependent on proof that the defendant participated in a breach of a fiduciary duty to an ERISA plan would be preempted.?? *? TE ERISA did not preempt state-law causes of action in the area. matters would be just as unsatisfactory, because the “liability of non fiduciaries would be assessed by varving state laws, while the conduct and hability of the fiduciary whom the third party is claimed to have knowingly assisted in breaching a duty would be governed by federal law.” Diduck \. Kaszvcki & Sons Contractors, Inc., 974 F 2d 270. 281 (2d Cir, 1992). Such a result would interfere significantly with Con eress’s patent intent to bring uniformity to the administration of employee benefit plans. See Fort Halifax Packine Co... Cowne. 482 US. 1, 910 C1987) 18 Fiduciaries will not always have the financial capability to provide complete relief. See, e.g., Brock v. Gerace, 635 I. Supp. 563, 569 (D.N.J. 1986). The absence of a remedy against nonfiduciaries therefore will prevent beneficiaries in some cases from being made whole. In our view, and in the view expressed by common-law courts for centuries, it is inequitable to require innocent beneficiaries to sustain such a loss, instead of the individuals who knowingly par- ticipated in the fiduciary’s wrongful conduct. Because ERISA defines the scope of available relief through prin- ciples of equity, that traditional view of what is equitable in these circumstances should preclude dismissal of peti- tioners’ claims. In sum, the traditional existence of a right of equitable recovery for individuals in the position of petitioners, coupled with ERISA’s broad preemption clause, provides powerful support for the conclusion that the remedy sought by petitioners is “appropriate equitable relief to “redress” the alleged violations of ERISA and the plan. (. The Availability of a Civil Penalty Against Nonfiduciaries Under Section 80201) of ERISA Demonstrates the Propriety of Awarding Such Relief Under Section $02(a)(3) 1. Section 502(/) of ERISA, 29 U.S.C. 1132(/) (Supp. Il 1990) confirms that Section 502(a)(3) should be inter- preted to authorize monetary relief against nonfiduciaries. Section $02(/)(1) provides in relevant part: In the case of — (A) any breach of fiduciary responsibility under * * * part 4 of this subtitle by a fiduciary, or (B) any knowing participation in such a breach * * * by any other person, the Secretary shall assess a civil penalty against such fiduciary or other person in an amount equal to 20 percent of the applicable recovery amount. 19 Section 502(/42)(B), in turn, defines the term “applicable recovery amount” to include “any amount * * * ordered by a court to be paid by such fiduciary or other person to a plan or its participants and beneficiaries in a judicial pro- ceeding instituted by the Secretary under subsection (a)(2) or (a(S) of this section.” 29 U.S.C. 1132(/)(2)(B) (Supp. Il 1990). Because Section 5$02(/)(2)(B) by its terms applies only to actions instituted under Sections 502(a)(2) and $02(a)(5). the reference to sums recovered from a fiduciary “or other person” necessarily indicates that it is possible to recover sums from “other person[s]” under at least one of those two subsections. Because Section 502(a)(2) authorizes only “relief under [Section 409],” and because Section 409 au- thorizes relief only against “[aJny person who is a fiduciary,” Section S02(a)(S) is t! 2 only provision under which the Secretary plausibly could recover sums from any “other person.” The authority granted to the Secretary by Section S02(a)(5), however, is substantively identical to the authority granted to beneficiaries under Section 502(a)(3) to “obtain other appropriate equitable relief (i) to redress such violations or (ii) to enforce any provisions of this sub- chapter.”?* Hence, the only logical alternatives to our reading of Section S02(a)(3) are (a) to conclude that the reference to an “other person” in Section $02(/)(2)(B) was erroneous, or (b) to hold that the substantively identical passages in Sections S02(a)(3) and 502(a)(5) have different meanings. Neither course comports with ordinary- prin- ciples of statutory construction. See, e.g., Moskal v. United States, WS. Ct. 461, 466 (1990) (“{A] court “The only difference between the provisions is that Section SO2(a 3) contains plural references to “violations” and “provisions” of ERISA, where Section SO2aMS) contains singular references to a “vrolation” and a “provision” of FRISA 20 should give effect, if possible, to every clause and word of a Statute.” (internal quotation marks omitted)); Estate of Cowart v. Nicklos Drilling Co., 112 S. Ct. 2589, 2596 (1992) (noting “the basic canon of statutory construction that identical terms within an Act bear the same meaning”); Patterson v. Shumate, 112 S. Ct. 2242, 2251 (1992) (Scalia, J., concurring) (“[CJonsistency of usage within the same statute is to be presumed.”). Therefore, Section 502(/) indicates that Section S02(a)(3)'s grant of power to afford “appropriate equitable relief includes the power to afford the time-honored equitable remedy grant- ing make-whole monetary relief against nonfiduciaries who knowingly participate in breaches of fiduciary duty.?* 2. Notwithstanding the import of Section S02(/) ex- plained above, the court of appeals concluded that the statute that enacted Section $02(/)—the Omnibus Budget Reconciliation Act of 1989 (OBRA), Pub. L. No. 101-239, § 2101, 103 Stat. 2123 —actually supports the position of respondent. The court noted that when Congress enacted OBRA, it considered and did not enact an amendment to ERISA that explicitly would have authorized claims ** Section 4978 of the Internal Revenue Code also mdicates that Section S02(a)4) authorizes actions against nonfiduciaries. That pro vision, which was enacted contemporanecously with Tithe Lof ERISA, levies a tax on “disqualified person|s}]” who engage in prohibited trans actions, a class of persons that includes nonfiducianies. 26 U.S¢ 4975(a) and (b), see Nieto, 845 F.2d at 874.6. The provision provides that before sending a notice of deficiency to such parties, the Secretary of the Treasury shall notify the Secretary of Labor to give her a reasonable opportunity to obtain a correction of the prohibited trans action. 26U' S.C. 497S¢th). The only way the Secretary of Labor could obtain a correction, however, would be by a civil action pursuant to Section S02(aS) against the “disqualified person.” Thus, 26 US.¢ 4975, like Section $02(/) of ERISA, rests on the premise that Section SO2(anS), and thus Section SO02(a4) as well, allows actions against parties other than fiduciaries 2) against persons who knowingly participate in fiduciary breaches. See H.R. 3299, 101st Cong., Ist Sess. § JISHeM6MA) (1989), 135 Cong. Rec. H6006 (daily ed. Sept. 27, 1989). As this Court repeatedly has indicated, however, Congress’s failure to act “lacks ‘persuasive Significance’ because ‘several equally tenable inferences’ may be drawn from such inaction, ‘including the inference that the existing legislation already incorporated the of. fered change.’ ” Pension Benefit Guaranty Corporation \. LIV Corp., 496 U.S. 633, 650 (1990) (quoting United States v. Wise, 370 U.S. 405, 411 (1962)). In this case, two of the circumstances surrounding OBRA’s enactment support the inference that Congress failed to act because of its view that ERISA already authorized the relief sought by petitioners, not because it wished to deny that relief. First, the House Report accom- panying OBRA noted that, at the time of the proposed amendment, “[a]ll but one of the Circuit Courts of Appeal that ha[d] considered the issue hafd] held that the broad remedial powers conferred on federal courts under ERISA section SC>’a)(3) and (5) create an implied cause of action against non-fiduciaries who knowingly participate in breaches of fiduciary duty proscribed by ERISA.” H.R. Rep. No. 247, 101st Cong., Ist Sess. 77 (1989). The Ninth Circuit alone had held to the contrary. See ihid. It is im- plausible to infer that congressional inaction reflected ac- quiescence in what Congress apparently understood to be the minority view of the statute. Second, the amendment was proposed to “clarif[y]” the existence of a right of ac- tion against nonfiduciaries. /hid. Starting from = that motivation, it would have been reasonable for Congress to remove the amendment when it chose to enact another prosision — Section $02(/)—that indicated that such relief was avarlable. Accordingly, Congress’s failure to overrule Nieto expressly does not undermine the strong indication 22 Section S02(/) offers: Section 502(a)(3), like Section 502(a)(S), allows monetary relief against nonfiduciaries who knowingly participate in a breach of trust with respect to an ERISA plan. D. This Court’s Decision In Massachusetts Mutual Life tn- surance Co. v. Russell Does Not loreclose the Claim for Relief in This Case 1. Interpreting ERISA to incorporate the trust-law principles of nonfiduciary liability also is consistent with Massachusetts Mutual Life Insurance Co. v. Russell, 473 U.S. 134 (1985), on which the Ninth Circuit relied to sup- port its contrary conclusion in Nieto, 845 F.2d at 872. In Russell, a beneficiary sued a plan fiduciary for bad-faith processing of her claim for benefits, asserting a right to recover compensatory and punitive damages that were not available under the terms of the plan. But the remedy in Section 502(a)(1)(B) for a beneficiary who is denied bene- fits wrongfully allows the beneficiary only “to recover benefits due to him under the terms of his plan.” 29 U.S.C. 1132(a)(1)(B) (emphasis added). Accordingly, be- cause the beneficiary was seeking relief in excess of the relief available under Section 502(a)(1)(B), the beneficiary relied on Section S02(a)(2), 29 U.S.C. 1132(ay(2), which permits a beneficiary to sue a fiduciary for a breach of fiduciary duty under Section 409. See Russell, 473 U.S. at 139-140. The Court declined to read Section 409 as enlarging the beneficiary's “explicitly authoriz[ed]"” (473 U.S. at 144) right to recovery for wrongful denial of benefits. Relying heavily on the overall purpose of Section 409(a)— which provides that a fiduciary “with respect to [an ERISA] plan” is personally liable to “make good to such plan any losses to the plan” that result from a breach of the fidu- 23 clary’s duties—the Court concluded that the general reference to “other equitable or remedial relief” that ap- pears in Section 409(a) authorizes only “ ‘plan-related’ relief,” which could not encompass a right to recover damages on a beneficiary's own account. 473 U.S. at 142. 2. For several reasons, Russell is not controlling here. birst, and most obviously, the beneficiary in Russel! sued exclusively under Sections 409 and S02(a)(2), and placed no reliance on Section 502(a)(3), the provision at issue in this case. Russel/, 473 U.S. at 139 n.5 (respondent “ex- pressly disclaim[ed] reliance on § $02(a)(3), [so] we have no occasion to consider whether any other provision of ERISA authorizes recovery of extracontractual damages”); see id. at 149 (Brennan, J., concurring). Second, the question at issue in this case is quite differ- ent from the question at issue in Russell. As noted above, Russell involved a claim for relief brought by a beneficiary against a fiduciary, based on a particular violation, with respect to which the provisions of Sections 409 and S02(a) provided for a specified recovery that was less than the recovery sought by the beneficiary; moreover, it was not suggested that the relief was traditionally available under the law of trusts. By contrast, the beneficiary here is at- tempting to obtain “equitable relief as authorized by the Statute; the only question is whether the statutory term in- cludes make-whole monetary relief against nonfiduciaries. In answering that question, we believe that it is entirely consistent with Russe// to interpret ERISA (as the Court did in Firestone) to carry forward traditional principles of trust law. binally, a broad reading of Russell barring the relict sought in this case would render Section $02(a3)(B) essentially useless, because Section 409 and the other pro- visions of Section SO2(a) already authorize removal of the trustee, as well as declaratory and injunctive relief to 24 prevent future violations. If “other appropriate equitable relief * * * to redress * * * violations” does not include other types of rehef courts of equity would have issued to redress violations of fiduciary duties, then it has no substantial purpose. See Russell, 473 US. at 18S (Bren nan, J., concurring); compare, e.g., Moskal v. United States, TIES. Ct. 461, 466 (1990) ([A] court should give effect, if possible, to every clause and word of a statute.” (internal quotation marks omitted)). 3. Although portions of the Court's opinion in Russell reflect reluctance to recognize new remedies that Congress “simply forgot to mecorporate” in ERISA, 473 U.S. at 146-—on the theory that implying new remedies would render the existing remedies set forth in Sections 409 and S02(a) 1B) superfluous — that concern is not implicated here. Section 409 not only provides general authority to award appropriate relief against a fiduciary who breaches his duties under ERISA, but also provides that a fiduciary shall be subject to certain very definite remedies for breaching the duties imposed under ERISA: make-whole relief for the plan, disgorgement of profits earned in breach of trust, and removal of a fiduciary. 29 U.S.C. 110%a). Even if Section $02(a)3) authorizes courts to derive the same remedies by incorporating equitable trust principles into ERISA, the enumeration of certain remedies in Section 409 would not be superfluous, because it would ensure that the specified relief would be available irrespective of the federal courts’ conclusions regarding the content of the equitable principles incorporated into Section S02(a)(3). In effect, therefore, Section 409, as im. plemented by Section S02(a(2), places a floor under the types of rehef available from a fiduciary. In sum, Section S02(a)(2) and the other precise remedial provisions Congress included in Section $02(a) form the first part of the “comprehensive civil enforcement scheme” - 2s set forth in Section SO2(a), Ingersoll Rand Co. v. McC len don, 111 S. Ct. 478, 485 (1990): they establish the basic minimum remedies Sections SO2(a M3) and SO2aMS) com plete the scheme, by broadly authorizing courts to develop other remedies as appropriate im light of the equitable principles underlying ERISA, as modified in light of ERISA’s particular terms. Because those principles allow heneficiarics to seck make whole relief from nonfidu cranes, Section $02(a)3) should do the same. CONCTEUSION The judgment of the court of appeals should be re versed, Respectfully submitted Rita W Stape Yolu. or Greneral Niawoseate Fo Bereae Mint erin bo Magione Selector of Labor Deputy Solwitor General Vere BE Brrinsgas RONALD B Mas Wssectate Sele tter Ihestant to the Soluior General NATHANDED TE Srurie f ounsel for Appellat I thivation Maren S Brynn Nfrornes Department of 1 ate NovE