Source: Supreme Court of the United States, Cornell Law School

Harris Trust and Savings Bank, as Trustee for the Ameritech Pension Trust, et al. V. Salomon Smith Barney Inc. et al.

Certiorari to the United States Court of Appeals for the Seventh Circuit

No. 99-579.
Argued April 17, 2000
Decided June 12, 2000

The Employee Retirement Income Security Act of 1974 (ERISA) bars a fiduciary of an employee benefit plan from causing the plan to engage in certain prohibited transactions with a "party in interest," §406(a), defined to encompass entities that a fiduciary might be inclined to favor at the expense of the plan's beneficiaries, see §3(14). Section 406's prohibitions are subject to both statutory and regulatory exemptions. See §§408(a), (b). The Ameritech Pension Trust (APT), an ERISA pension plan, allegedly entered into a transaction prohibited by §406(a) and not exempted by §408 with respondent Salomon Smith Barney Inc. (Salomon), a nonfiduciary party in interest. APT's fiduciaries-its trustee, petitioner Harris Trust and Savings Bank, and its administrator, petitioner Ameritech Corporation-sued Salomon under §502(a)(3), which authorizes a fiduciary, inter alios, to bring a civil action to obtain "appropriate equitable relief" to redress violations of ERISA. [More…]

Justice Thomas delivered the opinion of the Court.

Section 406(a) of the Employee Retirement Income Security Act of 1974 (ERISA), 88 Stat. 879, bars a fiduciary of an employee benefit plan from causing the plan to engage in certain transactions with a "party in interest." 29 U.S.C. § 1106(a). Section 502(a)(3) authorizes a "participant, beneficiary, or fiduciary" of a plan to bring a civil action to obtain "appropriate equitable relief" to redress violations of ERISA Title I. 29 U.S.C. § 1132(a)(3). The question is whether that authorization extends to a suit against a nonfiduciary "party in interest" to a transaction barred by §406(a). We hold that it does.
[More on Justice Thomas' decision…]

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