238
OCTOBER TERM, 1999
Syllabus
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 Title I. 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 transaction—and not against the counterparty to the transaction. 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 Salomon's motion for certification of the issue for interlocutory appeal. 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).
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). Pp. 245-254.
(a) In providing that "[a] fiduciary . . . shall not cause the plan to engage in a [prohibited] transaction" (emphasis added), § 406(a)(1) imposes a duty only on the fiduciary that causes the plan to engage in the transaction. However, this Court rejects the Seventh Circuit's and
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