Mass. Mut. Life Ins. Co. v. Russell, 473 U.S. 134 (1985)

Massachusetts Mutual Life Insurance Co. v. Russell

No. 84-9

Argued January 16, 1985
Reargued April 24, 1985
Decided June 27, 1985
473 U.S. 134

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR

THE NINTH CIRCUIT

Syllabus

Respondent, a claims examiner for petitioner insurance company (petitioner), is a beneficiary under employee benefit plans administered by petitioner and governed by the Employee Retirement Income Security Act of 1974 (ERISA). In May, 1979, respondent became disabled with a back ailment, and received plan benefits until October 17, 1979, when petitioner’s disability committee terminated her benefits based on an orthopedic surgeon’s report. Respondent then requested review of that decision, and on March 11, 1980, the plan administrator reinstated her benefits based on further medical reports, and retroactive benefits were paid in full. But claiming that she had been injured by the improper refusal to pay benefits from October 17, 1979, to March 11, 1980, respondent sued petitioner in California Superior Court, alleging various causes of action based on state law and on ERISA. Petitioner removed the case to Federal District Court, which granted petitioner’s motion for summary judgment, holding, inter alia, that ERISA barred any claims for extracontractual damages arising out of the original denial of respondent’s claim for benefits. The Court of Appeals reversed in pertinent part, holding that the 132 days that petitioner took to process respondent’s claim violated the plan fiduciary’s obligation to process claims in good faith and in a fair and diligent manner, and that this violation gave rise to a cause of action for damages under § 409(a) of ERISA that could be asserted by a plan beneficiary pursuant to § 502(a)(2) authorizing civil enforcement of ERISA. Section 409(a) provides that

[a]ny person who is a fiduciary with respect to a plan who breaches any of the responsibilities, obligations, or duties imposed upon fiduciaries by this title shall be personally liable to make good to such plan any losses to the plan resulting from 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.

Held: Section 409(a) does not provide a cause of action for extracontractual damages to a beneficiary caused by improper or untimely processing of benefit claims. Pp. 139-148.

(a) The text of § 409(a) contains no express authority for an award of such damages, and there is nothing in the text to support the conclusion that a delay in processing a disputed claim gives rise to a private cause of action for compensatory or punitive relief. Rather, the text shows that Congress did not intend to authorize any relief except for the plan itself. Not only is the relevant fiduciary relationship characterized at the outset of § 409(a) as one "with respect to a plan," but the fiduciary’s potential personal liability is

to make good to such plan any losses to the plan . . . and to restore to such plan any profits of such fiduciary which have been made through use of assets of the plan.

Pp. 139-144.

(b) Nor can a private cause of action for extra-contractual damages be implied. While respondent is a member of the class for whose benefit ERISA was enacted and, in view of the preemptive effect of ERISA, there is no state law impediment to implying a remedy, legislative intent and consistency with the legislative scheme support the conclusion that Congress did not intend the judiciary to imply such a cause of action. The civil enforcement provisions of § 502(a) provide strong evidence that Congress did not intend to authorize other remedies that it did not incorporate expressly. Pp. 145-148.

722 F.2d 482, reversed.

STEVENS, J., delivered the opinion of the Court, in which BURGER, C.J., and POWELL, REHNQUIST, and O’CONNOR, JJ., joined. BRENNAN, J., filed an opinion concurring in the judgment, in which WHITE, MARSHALL, and BLACKMUN, JJ., joined, post, p. 148.