LaRue v. DeWolff, Boberg & Associates, Inc., 552 U.S. 248 (2008)
Primary Holding
A participant in a defined contribution pension plan may sue a fiduciary under §502(a)(2) of the Employee Retirement Income Security Act (ERISA) for breaches of fiduciary duty that impair the value of their individual account, allowing for recovery that benefits the individual rather than solely the plan as a whole.
In the case of LaRue v. DeWolff, Boberg & Associates, the Supreme Court ruled that if someone has a retirement account and their employer mishandles it, they can sue the employer for any losses directly affecting their individual account. This is important because it gives consumers the right to seek compensation for mistakes that hurt their personal retirement savings, rather than just the overall plan. This case is relevant if you believe your employer has failed to follow your investment directions in your retirement plan, resulting in a loss of money.
AI-generated plain-language summary to help you understand this case
In LaRue v. DeWolff, Boberg & Associates, Inc., the petitioner, James LaRue, filed a lawsuit against his former employer, DeWolff, Boberg & Associates, and the 401(k) retirement savings plan administered by the company. LaRue alleged that in 2001 and 2002, he directed DeWolff to make specific changes to the investments in his individual account, but the company failed to execute these instructions. As a result of this inaction, LaRue claimed that his account was depleted by approximately $150,000, which he argued constituted a breach of fiduciary duty under the Employee Retirement Income Security Act of 1974 (ERISA). LaRue sought equitable relief under ERISA, specifically requesting that the court ensure his account accurately reflected what it would have been had the fiduciary duty not been breached. The procedural history of the case began with LaRue's filing of the action in 2004. The respondents moved for judgment on the pleadings, contending that LaRue's complaint was essentially a claim for monetary damages, which was not recoverable under ERISA's §502(a)(3). LaRue countered that he was not seeking monetary compensation but rather a correction to his account reflecting his rightful interest. The District Court ruled in favor of the respondents, stating that LaRue was seeking damages rather than the equitable relief available under ERISA. LaRue appealed the decision, arguing that he had a valid claim under both §502(a)(2) and §502(a)(3) of ERISA, although the Court of Appeals noted that his §502(a)(2) argument was raised for the first time on appeal and ultimately rejected it on the merits. The background context of this case centers on the interpretation of ERISA's provisions regarding fiduciary duties and the rights of individual plan participants. The Supreme Court had previously ruled in Massachusetts Mutual Life Insurance Co. v. Russell that participants could not seek consequential damages for delays in processing claims under §502(a)(2). The Fourth Circuit Court of Appeals held that §502(a)(2) only provides remedies for entire plans rather than for individual participants. This case presented the question of whether a participant in a defined contribution pension plan could sue for alleged misconduct that impaired the value of their individual account, challenging the established interpretations of ERISA.
Whether a participant in a defined contribution pension plan can sue a fiduciary under §502(a)(2) of the Employee Retirement Income Security Act (ERISA) for alleged misconduct that impaired the value of the participant's individual account.
The judgment is reversed and remanded.
- Court
- Supreme Court
- Decision Date
- November 26, 2007
- Jurisdiction
- federal
- Case Type
- landmark
- Majority Author
- Stevens
- Damages Awarded
- N/A
- Data Quality
- high
Beck v. PACE Int’l Union, 551 U.S. 96 (2007)
Consumer LostAn employer that sponsors and administers a single-employer defined-benefit pension plan does not have a fiduciary obligation under the Employee Retirement Income Security Act (ERISA) to consider a merger with a multiemployer plan as a method of terminating the plan.
Sereboff v. Mid Atlantic Medical Services, Inc., 547 U.S. 356 (2006)
Consumer LostA fiduciary under the Employee Retirement Income Security Act (ERISA) may sue a beneficiary for reimbursement of medical expenses paid by the ERISA plan when the beneficiary has recovered damages from a third party, as long as the plan contains a valid reimbursement provision.
Metropolitan Life Ins. Co. v. Glenn, 554 U.S. 105 (2008)
Consumer WonA plan administrator's dual role as both the decision-maker and the payor of benefits creates a conflict of interest, which a reviewing court must consider as a factor in determining whether the administrator abused its discretion in denying benefits under ERISA.
Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Dabit, 547 U.S. 71 (2006)
Consumer LostTitle I of the Securities Litigation Uniform Standards Act of 1998 (SLUSA) preempts state-law class action claims alleging misrepresentation or omission of material facts in connection with the purchase or sale of covered securities, regardless of whether federal law provides a private remedy for those claims.