Salomon smith barney logo11/11/2023 ![]() ![]() It thus follows that a participant, beneficiary, or fiduciary may bring suit against an other person under the similarly worded subsection (a)(3). The matter is conclusively resolved by §502( l), which provides for assessment by the Secretary of Labor of a civil penalty against a fiduciary or other person who knowingly participates in a fiduciarys ERISA violation, defining the amount of such penalty by reference to the amount ordered by a court to be paid by such other person in a judicial proceeding by the Secretary under subsection (a)(5). (Emphasis added.) The plain implication is that the Secretary may bring a civil action under §502(a)(5) against an other person who knowing participat in a fiduciarys violation, notwithstanding the absence of any ERISA provision explicitly imposing a duty upon an other person not to engage in such knowing participation. ![]() And, in providing that a civil action may be brought by a participant, beneficiary, or fiduciary (emphasis added), §502(a) itself demonstrates Congress care in delineating the universe of plaintiffs who may bring certain civil actions. (Emphasis added.) Other provisions of ERISA, by contrast, expressly address who may be a defendant. Indeed, §502(a)(3) makes no mention at all of which parties may be proper defendantsthe focus, instead, is on redressing the act or practice which violates any provision of. 349, 353, the section admits of no limit (aside from the appropriate equitable relief caveat) on the universe of possible defendants. While §502(a)(3) does not authorize appropriate equitable relief at large, but only for the purpose of redress violations or enforc any provisions of ERISA or an ERISA plan, e.g., Peacock v. Because §502(a)(3) itself imposes certain duties, liability under that provision does not depend on whether ERISAs substantive provisions impose a specific duty on the party being sued. However, this Court rejects the Seventh Circuits and Salomons conclusion that, absent a substantive ERISA provision expressly imposing a duty on a nonfiduciary party in interest, the nonfiduciary party may not be held liable under §502(a)(3), one of ERISAs remedial provisions. (a) In providing that fiduciary shall not cause the plan to engage in a transaction (emphasis added), §406(a)(1) imposes a duty only on the fiduciary that causes the plan to engage in the transaction. Held: Section 502(a)(3)s authorization to a plan participant, beneficiary, or fiduciary to bring a civil action for appropriate equitable relief extends to a suit against a nonfiduciary party in interest to a prohibited transaction barred by §406(a). The Seventh Circuit reversed, holding that the authority to sue under §502(a)(3) does not extend to a suit against a nonfiduciary party in interest to a transaction barred by §406(a). The District Court denied the motion, holding that ERISA provides a private cause of action against nonfiduciaries who participate in a prohibited transaction, but granted Salomons motion for certification of the issue for interlocutory appeal. Salomon moved for summary judgment, arguing that §502(a)(3), when used to remedy a transaction prohibited by §406(a), authorizes a suit only against the party expressly constrained by §406(a)the fiduciary who caused the plan to enter the transactionand not against the counterparty to the transaction. ![]() APTs fiduciariesits trustee, petitioner Harris Trust and Savings Bank, and its administrator, petitioner Ameritech Corporationsued 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 Title I. (Salomon), a nonfiduciary party in interest. 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. Section 406s prohibitions are subject to both statutory and regulatory exemptions. 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 plans beneficiaries, see §3(14). ![]()
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