U.S. Supreme Court Pilot Life Ins. Co. v. Dedeaux, 481 U.S.
41 (1987) Pilot Life Insurance Co. v.
Dedeaux No. 85-1043. Argued January 21,
1987 Decided April 6, 1987 481 U.S.
41 CERTIORARI TO THE UNITED STATES
COURT OF APPEALS FOR THE FIFTH CIRCUIT Syllabus The "preemption clause" (§ 514(a)) of the Employee Retirement
Income Security Act of 1974 (ERISA) provides that ERISA supersedes
all state laws insofar as they "relate to any employee benefit
plan," but ERISA's "saving clause" (§ 514(b)(2)(A)) excepts from
the preemption clause any state law that "regulates insurance."
ERISA's "deemer clause" (§ 514(b)(2)(B)) provides that no employee
benefit plan shall be deemed to be an insurance company for
purposes of any state law "purporting to regulate insurance." On
the basis of a work-related injury occurring in Mississippi in
1975, respondent began receiving permanent disability benefits
under his employer's ERISA-regulated welfare benefit plan, under
which claims were handled by petitioner, the employer's insurer.
However, after two years, petitioner terminated respondent's
benefits, and during the following three years his benefits were
reinstated and terminated by petitioner several times. Respondent
ultimately instituted a diversity action against petitioner in
Federal District Court, alleging tort and breach of contract claims
under Mississippi common law for petitioner's failure to pay
benefits under the insurance policy. The court granted summary
judgment for petitioner, finding that respondent's common law
claims were preempted by ERISA. The Court of Appeals reversed. Held: ERISA preempts respondent's suit under state
common law for alleged improper processing of his claim for
benefits under the ERISA-regulated benefit plan. Pp. 481 U. S.
44 -57.

															(a) The common law causes of action asserted in respondent's
complaint, each based on alleged improper processing of a benefit
claim under an employee benefit plan, "relate to" an employee
benefit plan, and therefore fall under ERISA's preemption clause. Cf. Metropolitan Life Ins. Co. v. Massachusetts, 471 U. S. 724 , 471 U. S. 739 ; Shaw v. Delta Air Lines, Inc., 463 U. S.
85 , 463 U. S.
96 -100. The preemption clause is not limited to state
laws specifically designed to affect employee benefit plans. Pp. 481 U. S.
47 -48.

															(b) Under the guidelines set forth in Metropolitan
Life, respondent's causes of action under state decisional
common law -- particularly the cause, presently asserted, based on
the Mississippi law of bad faith -- do not fall under ERISA's
saving clause, and thus are not excepted from Page 481 U. S. 42 preemption. A common-sense understanding of the language of the
saving clause excepting from preemption a state law that "regulates
insurance" does not support the argument that the Mississippi law
of bad faith falls under the clause. To "regulate" insurance, a law
must not just have an impact on the insurance industry, but must be
specifically directed toward that industry. Mississippi Supreme
Court decisions establish that its law of bad faith applies to any
breach of contract, not merely a breach of an insurance contract.
Neither do the factors for interpreting the phrase "business of
insurance" under the McCarran-Ferguson Act (which factors are
appropriate for consideration here) support the assertion that the
Mississippi law of bad faith "regulates insurance" for purposes of
ERISA's saving clause. Pp. 481 U. S. 48 -51.

															(c) Moreover, interpretation of the saving clause must be
informed by the legislative intent concerning ERISA's civil
enforcement provisions. The language and structure of those
provisions support the conclusion that they were intended to
provide exclusive remedies for ERISA-plan participants and
beneficiaries asserting improper processing of benefit claims.
ERISA's detailed provisions set forth a comprehensive civil
enforcement scheme that represents a careful balancing of the need
for prompt and fair claims settlement procedures against the public
interest in encouraging the formation of employee benefit plans.
The policy choices reflected in the inclusion of certain remedies
and the exclusion of others under the federal scheme would be
completely undermined if ERISA-plan participants and beneficiaries
were free to obtain remedies under state law that Congress rejected
in ERISA. The conclusion that ERISA's civil enforcement provisions
were intended to be exclusive is also confirmed by the legislative
history of those provisions, particularly the history demonstrating
that the preemptive force of ERISA's enforcement provisions was
modeled after the powerful preemptive force of § 301 of the Labor
Management Relations Act, 1947. Pp. 481 U. S.
51 -56.

															770 F.2d 1311, reversed.

															O'CONNOR, J., delivered the opinion for a unanimous Court. Page 481 U. S. 43 JUSTICE O'CONNOR delivered the opinion of the Court.

															This case presents the question whether the Employee Retirement
Income Security Act of 1974 (ERISA), 88 Stat. 829, as amended, 29
U.S.C. § 1001 et seq., preempts state common law tort and
contract actions asserting improper processing of a claim for
benefits under an insured employee benefit plan. I In March, 1975, in Gulfport, Mississippi, respondent Everate W.
Dedeaux injured his back in an accident related to his employment
for Entex, Inc. (Entex). Entex had at this time a long-term
disability employee benefit plan established by purchasing a group
insurance policy from petitioner, Pilot Life Insurance Co. (Pilot
Life). Entex collected and matched its employees' contributions to
the plan and forwarded those funds to Pilot Life; the employer also
provided forms to its employees for processing disability claims,
and forwarded completed forms to Pilot Life. Pilot Life bore the
responsibility of determining who would receive disability
benefits. Although Dedeaux sought permanent disability benefits
following the 1975 accident, Pilot Life terminated his benefits
after two years. During the following three years, Dedeaux's
benefits were reinstated and terminated by Pilot Life several
times.

															In 1980, Dedeaux instituted a diversity action against Pilot
Life in the United States District Court for the Southern District
of Mississippi. Dedeaux's complaint contained three counts:
"Tortious Breach of Contract"; "Breach of Fiduciary Duties"; and
"Fraud in the Inducement." App. 18-23. Dedeaux sought "[d]amages
for failure to provide benefits under the insurance policy in a sum
to be determined at the time of trial," "[g]eneral damages for
mental and emotional distress and other incidental damages in the
sum of $250,000.00," and "[p]unitive and exemplary damages in
the Page 481 U. S. 44 sum of $500,000.00." Id. at 23-24. Dedeaux did not
assert any of the several causes of action available to him under
ERISA, see infra at 481 U. S.
53 .

															At the close of discovery, Pilot Life moved for summary
judgment, arguing that ERISA preempted Dedeaux's common law claim
for failure to pay benefits on the group insurance policy. The
District Court granted Pilot Life summary judgment, finding all
Dedeaux's claims preempted. App. to Pet. Cert. 16a.

															The Court of Appeals for the Fifth Circuit reversed, primarily
on the basis of this Court's decision in Metropolitan Life Ins.
Co. v. Massachusetts, 471 U. S. 724 (1985). See 770 F.2d 1311 (1985). We granted certiorari,
478 U.S. 1004 (1986), and now reverse. II In ERISA, Congress set out to

															"protect . . . participants in employee benefit plans and their
beneficiaries, by requiring the disclosure and reporting to
participants and beneficiaries of financial and other information
with respect thereto, by establishing standards of conduct,
responsibility, and obligation for fiduciaries of employee benefit
plans, and by providing for appropriate remedies, sanctions, and
ready access to the Federal courts."

															§ 2, as set forth in 29 U.S.C. § 1001(b). ERISA comprehensively
regulates, among other things, employee welfare benefit plans that,
"through the purchase of insurance or otherwise," provide medical,
surgical, or hospital care, or benefits in the event of sickness,
accident, disability, or death. § 3(1), 29 U.S.C. § 1002(1).

															Congress capped off the massive undertaking of ERISA with three
provisions relating to the preemptive effect of the federal
legislation:

															"Except as provided in subsection (b) of this section [the
saving clause], the provisions of this subchapter and Page 481 U. S. 45 subchapter III of this chapter shall supersede any and all State
laws insofar as they may now or hereafter relate to any employee
benefit plan. . . ."

															§ 514(a), as set forth in 29 U.S.C. § 1144(a) (preemption
clause).

															"Except as provided in subparagraph (B) [the deemer clause],
nothing in this subchapter shall be construed to exempt or relieve
any person from any law of any State which regulates insurance,
banking, or securities."

															§ 514(b)(2)(A), as set forth in 29 U.S.C. § 1144(b)(2)(A)
(saving clause).

															"Neither an employee benefit plan . . . nor any trust
established under such a plan, shall be deemed to be an insurance
company or other insurer, bank, trust company, or investment
company or to be engaged in the business of insurance or banking
for purposes of any law of any State purporting to regulate
insurance companies, insurance contracts, banks, trust companies,
or investment companies."

															§ 514(b)(2)(B), 29 U.S.C. § 1144(b)(2)(B) (deemer clause).

															To summarize the pure mechanics of the provisions quoted above:
If a state law "relate[s] to . . . employee benefit plan[s]," it is
preempted. § 514(a). The saving clause excepts from the preemption
clause laws that "regulat[e] insurance." § 514(b)(2)(A). The deemer
clause makes clear that a state law that "purport[s] to regulate
insurance" cannot deem an employee benefit plan to be an insurance
company. § 514(b)(2)(B).

															"[T]he question whether a certain state action is preempted by
federal law is one of congressional intent. " The purpose of
Congress is the ultimate touchstone.'"" Allis-Chalmers Corp. v. Lueck, 471 U.
S. 202 , 471 U. S. 208 (1985), quoting Malone v. White Motor Corp., 435 U.
S. 497 , 435 U. S. 504 (1978), quoting Retail Clerks v. Schermerhorn, 375 U. S. 96 , 375 U. S. 103 (1963). We have observed in the past that the express
preemption Page 481 U. S. 46 provisions of ERISA are deliberately expansive, and designed to
"establish pension plan regulation as exclusively a federal
concern." Alessi v. Raybestos-Manhattan, Inc., 451 U. S. 504 , 451 U. S. 523 (1981). As we explained in Shaw v. Delta Air Lines, Inc., 463 U. S. 85 , 463 U. S. 98 (1983):

															"The bill that became ERISA originally contained a limited
preemption clause, applicable only to state laws relating to the
specific subjects covered by ERISA. The Conference Committee
rejected those provisions in favor of the present language, and
indicated that section's preemptive scope was as broad as its
language. See H.R.Conf.Rep. No. 93-1280, p. 383 (1974);
S.Conf.Rep. No. 93-1090, p. 383 (1974)."

															The House and Senate sponsors emphasized both the breadth and
importance of the preemption provisions. Representative Dent
described the "reservation to Federal authority [of] the sole power
to regulate the field of employee benefit plans" as ERISA's
"crowning achievement." 120 Cong.Rec. 29197 (1974). Senator
Williams said:

															"It should be stressed that, with the narrow exceptions
specified in the bill, the substantive and enforcement provisions
of the conference substitute are intended to preempt the field for
Federal regulations, thus eliminating the threat of conflicting or
inconsistent State and local regulation of employee benefit plans.
This principle is intended to apply in its broadest sense to all
actions of State or local governments, or any instrumentality
thereof, which have the force or effect of law." Id. at 29933. See also Shaw v. Delta Air Lines,
Inc., supra, at 463 U. S.
99 -100, n. 20 (describing remarks of Sen. Javits).

															In Metropolitan Life, this Court, noting that the
preemption and saving clauses "perhaps are not a model of
legislative drafting," 471 U.S. at 471 U. S. 739 ,
interpreted these clauses in relation to a Massachusetts statute
that required minimum Page 481 U. S. 47 mental health care benefits to be provided Massachusetts
residents covered by general health insurance policies. The
appellants in Metropolitan Life argued that the state statute, as
applied to insurance policies purchased by employee health care
plans regulated by ERISA, was preempted.

															The Court concluded, first, that the Massachusetts statute did
"relate to . . . employee benefit plan[s]," thus placing the state
statute within the broad sweep of the preemption clause, § 514(a). Metropolitan Life, supra, at 471 U. S. 739 .
However, the Court held that, because the state statute was one
that "regulate[d] insurance," the saving clause prevented the state
law from being preempted. In determining whether the Massachusetts
statute regulated insurance, the Court was guided by case law
interpreting the phrase "business of insurance" in the
McCarran-Ferguson Act, 59 Stat. 33, as amended, 15 U.S.C. § 1011 et seq. Given the "statutory complexity" of ERISA's three preemption
provisions, Metropolitan Life, supra, at 471 U. S. 740 ,
as well as the wide variety of state statutory and decisional law
arguably affected by the federal preemption provisions, it is not
surprising that we are again called on to interpret these
provisions. III There is no dispute that the common law causes of action
asserted in Dedeaux's complaint "relate to" an employee benefit
plan, and therefore fall under ERISA's express preemption clause, §
514(a). In both Metropolitan Life, supra, and Shaw v.
Delta Air Lines, Inc., supra, at 463 U. S.
96 -100, we noted the expansive sweep of the preemption
clause. In both cases

															"[t]he phrase 'relate to' was given its broad common-sense
meaning, such that a state law 'relate[s] to' a benefit plan 'in
the normal sense of the phrase, if it has a connection with or
reference to such a plan.'" Metropolitan Life, supra, at 471 U. S. 739 ,
quoting Shaw v. Delta Air Lines, supra, at 463 U. S. 97 . In
particular, we have emphasized that the preemption clause is not
limited to "state laws specifically designed Page 481 U. S. 48 to affect employee benefit plans." Shaw v. Delta Air Lines,
supra, at 463 U. S. 98 .
The common law causes of action raised in Dedeaux's complaint, each
based on alleged improper processing of a claim for benefits under
an employee benefit plan, undoubtedly meet the criteria for
preemption under § 514(a).

															Unless these common law causes of action fall under an exception
to § 514(a), therefore, they are expressly preempted. Although
Dedeaux's complaint pleaded several state common law causes of
action, before this Court Dedeaux has described only one of the
three counts -- called "tortious breach of contract" in the
complaint, and "the Mississippi law of bad faith" in respondent's
brief -- as protected from the preemptive effect of § 514(a). The
Mississippi law of bad faith, Dedeaux argues, is a law "which
regulates insurance," and thus is saved from preemption by §
514(b)(2)(A). [ Footnote 1 ]

															In Metropolitan Life, we were guided by several
considerations in determining whether a state law falls under the
saving clause. First, we took what guidance was available from a
"common-sense view" of the language of the saving clause itself.
471 U.S. at 471 U. S. 740 .
Second, we made use of the case law interpreting the phrase
"business of insurance" under the McCarran-Ferguson Act, 15 U.S.C.
§ 1011 et seq., in interpreting the saving clause.
[ Footnote 2 ] Three criteria
have been used to determine whether a practice falls under the
"business of insurance" for purposes of the McCarran-Ferguson
Act:

															" [F]irst, whether the practice has the effect of
transferring or spreading a policyholder's risk; second, whether"

															the practice is an integral part of the policy relationship Page 481 U. S. 49 between the insurer and the insured; and third, whether
the practice is limited to entities within the insurance
industry. Union Labor Life Ins. Co. v. Pireno, 458 U.
S. 119 , 458 U. S. 129 (1982) (emphasis in original).

															In the present case, the considerations weighed in Metropolitan Life argue against the assertion that the
Mississippi law of bad faith is a state law that "regulates
insurance."

															As early as 1915, the Mississippi Supreme Court had recognized
that punitive damages were available in a contract case when "the
act or omission constituting the breach of the contract amounts
also to the commission of a tort." See Nood v. Moffett, 109 Miss. 757, 767, 69 So. 664, 666 (1915) (involving a physician's
breach of a contract to attend to a woman at her approaching
"accouchement"). In American Railway Express Co. v.
Bailey, 142 Miss. 622, 631, 107 So. 761, 763 (1926), a case
involving a failure of a finance company to deliver to the
plaintiff the correct amount of money cabled to the plaintiff
through the finance company's offices, the Mississippi Supreme
Court explained that punitive damages could be available when the
breach of contract was "attended by some intentional wrong, insult,
abuse, or gross negligence, which amounts to an independent tort."
In Standard Life Insurance Co. v. Veal, 354 So. 2d
239 (1977), the Mississippi Supreme Court, citing D. L.
Fair Lumber Co. v. Weems, 196 Miss. 201, 16 So. 2d 770 (1944)
(breach of contract was accompanied by "the breaking down and
destruction of another's fence"), American Railway Express Co.
v. Bailey, supra, and Hood v. Moffett, supra, upheld
an award of punitive damages against a defendant insurance company
for failure to pay on a credit life policy. Since Veal, the Mississippi Supreme Court has considered a large number of
cases in which plaintiffs have sought punitive damages from
insurance companies for failure to pay a claim under an insurance
contract, and in a great many of these cases the court has used the
identical formulation, first stated in Bailey, of what
must "attend" the breach of contract in order for punitive Page 481 U. S. 50 damages to be recoverable. See, e.g., Employers Mutual
Casualty Co. v. Tompkins, 490 So. 2d
897 , 902 (1986); State Farm Fire & Casualty Co. v.
Simpson, 477 So. 2d
242 , 248 (1985); Consolidated American Life Ins. Co. v.
Toche, 410 So. 2d
1303 , 1304 (1982); Gulf Guaranty Life Ins. Co. v.
Kelley, 389 So. 2d
920 , 922 (1980); State Farm Mutual Automobile Ins. Co. v.
Roberts, 379 So. 2d
321 , 322 (1980); New Hampshire Ins. Co. v.
Smith, 357 So. 2d
119 , 121 (1978); Lincoln National Life Ins. Co. v.
Crews, 341 So. 2d
1321 , 1322 (1977). Recently, the Mississippi Supreme Court
stated that

															"[w]e have come to term an insurance carrier which refuses to
pay a claim when there is no reasonably arguable basis to deny it
as acting in 'bad faith,' and a lawsuit based upon such an
arbitrary refusal as a 'bad faith' cause of action." Blue Cross & Blue Shield of Mississippi, Inc. v.
Campbell, 466 So. 2d
833 , 842 (1984).

															Certainly a common-sense understanding of the phrase "regulates
insurance" does not support the argument that the Mississippi law
of bad faith falls under the saving clause. A common-sense view of
the word "regulates" would lead to the conclusion that, in order to
regulate insurance, a law must not just have an impact on the
insurance industry, but must be specifically directed toward that
industry. Even though the Mississippi Supreme Court has identified
its law of bad faith with the insurance industry, the roots of this
law are firmly planted in the general principles of Mississippi
tort and contract law. Any breach of contract, and not merely
breach of an insurance contract, may lead to liability for punitive
damages under Mississippi law.

															Neither do the McCarran-Ferguson Act factors support the
assertion that the Mississippi law of bad faith "regulates
insurance." Unlike the mandated-benefits law at issue in Metropolitan Life, the Mississippi common law of bad faith
does not effect a spreading of policyholder risk. The state common
law of bad faith may be said to concern "the policy relationship
between the insurer and the insured. " The connection Page 481 U. S. 51 to the insurer-insured relationship is attenuated, at best,
however. In contrast to the mandated-benefits law in Metropolitan Life, the common law of bad faith does not
define the terms of the relationship between the insurer and the
insured; it declares only that, whatever terms have been agreed
upon in the insurance contract, a breach of that contract may in
certain circumstances allow the policyholder to obtain punitive
damages. The state common law of bad faith is therefore no more
"integral" to the insurer-insured relationship than any State's
general contract law is integral to a contract made in that State.
Finally, as we have just noted, Mississippi's law of bad faith,
even if associated with the insurance industry, has developed from
general principles of tort and contract law available in any
Mississippi breach of contract case. Cf. Hart v. Orion Ins.
Co., 453 F.2d 1358 (CA10 1971) (general state arbitration
statutes do not regulate the business of insurance under the
McCarran-Ferguson Act); Hamilton Life Ins. Co. v. Republic
National Life Ins. Co., 408 F.2d 606 (CA2 1969) (same).
Accordingly, the Mississippi common law of bad faith, at most,
meets one of the three criteria used to identify the "business of
insurance" under the McCarran-Ferguson Act, and used in Metropolitan Life to identify laws that "regulat[e]
insurance" under the saving clause.

															In the present case, moreover, we are obliged in interpreting
the saving clause to consider not only the factors by which we were
guided in Metropolitan Life, but also the role of the
saving clause in ERISA as a whole. On numerous occasions we have
noted that

															"" "[i]n expounding a statute, we must not be guided by a
single sentence or member of a sentence, but look to the provisions
of the whole law, and to its object and policy."'"" Kelly v. Robinson, 479 U. S. 36 , 479 U. S. 43 (1986), quoting Offshore Logistics, Inc. v. Tallentire, 477 U. S. 207 , 477 U. S. 221 (1986) (quoting Mastro Plastics Corp. v. NLRB, 350 U. S. 270 , 350 U. S. 285 (1956) (in turn quoting United States v. Heirs of
Boisdore , 8 How. 113, 49 U. S. 122 (1849))). Because, in this case, Page 481 U. S. 52 the state cause of action seeks remedies for the improper
processing of a claim for benefits under an ERISA-regulated plan,
our understanding of the saving clause must be informed by the
legislative intent concerning the civil enforcement provisions
provided by ERISA § 502(a), 29 U.S.C. § 1132(a).

															The Solicitor General, for the United States as amicus
curiae, argues that Congress clearly expressed an intent that
the civil enforcement provisions of ERISA § 502(a) be the exclusive
vehicle for actions by ERISA-plan participants and beneficiaries
asserting improper processing of a claim for benefits, and that
varying state causes of action for claims within the scope of §
502(a) would pose an obstacle to the purposes and objectives of
Congress. Brief for United States as Amicus Curiae 18-19.
We agree. The conclusion that § 502(a) was intended to be exclusive
is supported, first, by the language and structure of the civil
enforcement provisions, and second, by legislative history in which
Congress declared that the preemptive force of § 502(a) was modeled
on the exclusive remedy provided by § 301 of the Labor Management
Relations Act, 1947 (LMRA), 61 Stat. 156, 29 U.S.C. § 185.

															The civil enforcement scheme of § 502(a) is one of the essential
tools for accomplishing the stated purposes of ERISA. [ Footnote 3 ] The civil enforcement
scheme is sandwiched between Page 481 U. S. 53 two other ERISA provisions relevant to enforcement of ERISA and
to the processing of a claim for benefits under an employee benefit
plan. Section 501, 29 U.S.C. § 1131, authorizes criminal penalties
for violations of the reporting and disclosure provisions of ERISA.
Section 503, 29 U.S.C. § 1133, requires every employee benefit plan
to comply with Department of Labor regulations on giving notice to
any participant or beneficiary whose claim for benefits has been
denied, and affording a reasonable opportunity for review of the
decision denying the claim. Under the civil enforcement provisions
of § 502(a), a plan participant or beneficiary may sue to recover
benefits due under the plan, to enforce the participant's rights
under the plan, or to clarify rights to future benefits. Relief may
take the form of accrued benefits due, a declaratory judgment on
entitlement to benefits, or an injunction against a plan
administrator's improper refusal to pay benefits. A participant or
beneficiary may also bring a cause of action for breach of
fiduciary duty, and under this cause of action may seek removal of
the fiduciary. §§ 502(a)(2), 409. In an action under these civil
enforcement provisions, the court in its discretion may allow an
award of attorney's fees to either party. § 502(g). See
Massachusetts Mutual Life Ins. Co. v. Russell, 473 U.
S. 134 , 473 U. S. 147 (1985). In Russell, we concluded that ERISA's breach of
fiduciary duty provision, § 409(a), 29 U.S.C. Page 481 U. S. 54 § 1109(a), provided no express authority for an award of
punitive damages to a beneficiary. Moreover, we declined to find an
implied cause of action for punitive damages in that section,
noting that

															"'[t]he presumption that a remedy was deliberately omitted from
a statute is strongest when Congress has enacted a comprehensive
legislative scheme including an integrated system of procedures for
enforcement.'" Russell, supra, at 473 U. S. 147 ,
quoting Northwest Airlines, Inc. v. Transport Workers, 451 U. S. 77 , 451 U. S. 97 (1981). Our examination of these provisions made us "reluctant to
tamper with an enforcement scheme crafted with such evident care as
the one in ERISA." Russell, supra, at 473 U. S.
147 .

															In sum, the detailed provisions of § 502(a) set forth a
comprehensive civil enforcement scheme that represents a careful
balancing of the need for prompt and fair claims settlement
procedures against the public interest in encouraging the formation
of employee benefit plans. The policy choices reflected in the
inclusion of certain remedies and the exclusion of others under the
federal scheme would be completely undermined if ERISA plan
participants and beneficiaries were free to obtain remedies under
state law that Congress rejected in ERISA.

															"The six carefully integrated civil enforcement provisions found
in § 502(a) of the statute as finally enacted . . . provide strong
evidence that Congress did not intend to authorize other
remedies that it simply forgot to incorporate expressly." Russell, supra, at 473 U. S. 146 (emphasis in original).

															The deliberate care with which ERISA's civil enforcement
remedies were drafted and the balancing of policies embodied in its
choice of remedies argue strongly for the conclusion that ERISA's
civil enforcement remedies were intended to be exclusive. This
conclusion is fully confirmed by the legislative history of the
civil enforcement provision. The legislative history demonstrates
that the preemptive force of § 502(a) was modeled after § 301 of
the LMRA. Page 481 U. S. 55 The Conference Report on ERISA describing the civil enforcement
provisions of § 502(a) says:

															"Under the conference agreement, civil actions may be brought by
a participant or beneficiary to recover benefits due under the
plan, to clarify rights to receive future benefits under the plan,
and for relief from breach of fiduciary responsibility. . . .
[W]ith respect to suits to enforce benefit rights under the plan or
to recover benefits under the plan which do not involve application
of the title I provisions, they may be brought not only in U.S.
district courts, but also in State courts of competent
jurisdiction. All such actions in Federal or State courts are
to be regarded as arising under the laws of the United States in
similar fashion to those brought under section 301 of the
Labor-Management Relations Act of 1947. "

															H.R.Conf.Rep. No. 93-1280, p. 327 (1974) (emphasis added).

															Congress was well aware that the powerful preemptive force of §
301 of the LMRA displaced all state actions for violation of
contracts between an employer and a labor organization, even when
the state action purported to authorize a remedy unavailable under
the federal provision. Section 301 preempts any

															"state law claim [whose resolution] is substantially dependent
upon the analysis of the terms of an agreement made between the
parties in a labor contract." Allis-Chalmers Corp. v. Lueck, 471 U.S. at 471 U. S. 220 .
As we observed in Allis-Chalmers, the broad preemptive
effect of § 301 was first analyzed in Teamsters v. Lucas Flour
Co., 369 U. S. 95 (1962). In Lucas Flour, the Court found that

															"[t]he dimensions of § 301 require the conclusion that
substantive principles of federal labor law must be paramount in
the area covered by the statute." Id. at 369 U. S. 103 .
"[I]n enacting § 301, Congress intended doctrines of federal labor
law uniformly to prevail over inconsistent local rules." Id. at 369 U. S. 104 .
Indeed, for purposes of determining federal jurisdiction, this
Court has singled out § 301 of the LMRA as having

															"preemptive Page 481 U. S. 56 force . . . so powerful as to displace entirely any state cause
of action 'for violation of contracts between an employer and a
labor organization.' Any such suit is purely a creature of federal
law. . . ." Franchise Tax Board of Cal. v. Construction Laborers
Vacation Trust for Southern Cal., 463 U. S.
1 , 463 U. S. 23 (1983), referring to Avco Corp. v. Machinists, 390 U. S. 557 (1968).

															Congress' specific reference to § 301 of the LMRA to describe
the civil enforcement scheme of ERISA makes clear its intention
that all suits brought by beneficiaries or participants asserting
improper processing of claims under ERISA-regulated plans be
treated as federal questions governed by § 502(a). See
also H.R.Rep. No. 93-533, p. 12 (1973), reprinted in 2 Senate
Committee on Labor and Public Welfare, Legislative History of
ERISA, 94th Cong., 2d Sess., 2359 (Comm. Print 1976) ("The
uniformity of decision which the Act is designed to foster will
help administrators, fiduciaries and participants to predict the
legality of proposed actions without the necessity of reference to
varying state laws"); 120 Cong.Rec. 29933 (1974) (remarks of Sen.
Williams) (suits involving claims for benefits "will be regarded as
arising under the laws of the United States, in similar fashion to
those brought under section 301 of the Labor Management Relations
Act"); id. at 29942 (remarks of Sen. Javits) ("[i]t is
also intended that a body of Federal substantive law will be
developed by the courts to deal with issues involving rights and
obligations under private welfare and pension plans"). The
expectations that a federal common law of rights and obligations
under ERISA-regulated plans would develop, indeed, the entire
comparison of ERISA's § 502(a) to § 301 of the LMRA, would make
little sense if the remedies available to ERISA participants and
beneficiaries under § 502(a) could be supplemented or supplanted by
varying state laws.

															In Metropolitan Life Ins. Co. v. Massachusetts, 471
U.S. at 471 U. S. 746 ,
this Court rejected an interpretation of the saving clause of
ERISA's express preemption provisions, § 514(b) (2)(A), 29 U.S.C. §
1144(b)(2)(A), that saved from preemption Page 481 U. S. 57 "only state regulations unrelated to the substantive provisions
of ERISA," finding that "[n]othing in the language, structure, or
legislative history of the Act" supported this reading of the
saving clause. Metropolitan Life, however, did not involve
a state law that conflicted with a substantive provision of ERISA.
Therefore the Court's general observation -- that state laws
related to ERISA may also fall under the saving clause -- was not
focused on any particular relationship or conflict between a
substantive provision of ERISA and a state law. In particular, the
Court had no occasion to consider in Metropolitan Life the
question raised in the present case: whether Congress might clearly
express, through the structure and legislative history of a
particular substantive provision of ERISA, an intention that the
federal remedy provided by that provision displace state causes of
action. Our resolution of this different question does not conflict
with the Court's earlier general observations in Metropolitan
Life .

															Considering the common-sense understanding of the saving clause,
the McCarran-Ferguson Act factors defining the business of
insurance, and, most importantly, the clear expression of
congressional intent that ERISA's civil enforcement scheme be
exclusive, we conclude that Dedeaux's state law suit asserting
improper processing of a claim for benefits under an
ERISA-regulated plan is not saved by § 514(b)(2)(A), and therefore
is preempted by § 514(a). [ Footnote
4 ] Accordingly, the judgment of the Court of Appeals is Reversed. [ Footnote 1 ]

															Decisional law that "regulates insurance" may fall under the
saving clause. The saving clause, § 514(b)(2)(A), covers "any law
of any State." For purposes of § 514, "[t]he term state law'
includes all laws, decisions, rules, regulations, or other State
action having the effect of law, of any State." 29 U.S.C. §§
1144(c)(1) and (2). [ Footnote 2 ]

															The McCarran-Ferguson Act provides, in relevant part:

															"The business of insurance, and every person engaged therein,
shall be subject to the laws of the several States which relate to
the regulation or taxation of such business."

															15 U.S.C. § 1012(a).

															[ Footnote 3 ]

															Section 502(a), as set forth in 29 U.S.C. § 1132(a),
provides:

															"A civil action may be brought -- "

															"(1) by a participant or beneficiary -- "

															"(A) for the relief provided for in subsection (c) of this
section [concerning requests to the administrator for information],
or"

															"(B) to recover benefits due to him under the terms of his plan,
to enforce his rights under the terms of the plan, or to clarify
his rights to future benefits under the terms of the plan;"

															"(2) by the Secretary, or by a participant, beneficiary or
fiduciary for appropriate relief under section 1109 of this title
[breach of fiduciary duty];"

															"(3) by a participant, beneficiary, or fiduciary (A) to enjoin
any act or practice which violates any provision of this subchapter
or the terms of the plan, or (B) to obtain other appropriate
equitable relief (i) to redress such violations or (ii) to enforce
any provisions of this subchapter or the terms of the plan;"

															"(4) by the Secretary, or by a participant, or beneficiary for
appropriate relief in the case of a violation of 1025(c) of this
title [information to be furnished to participants];"

															"(5) except as otherwise provided in subsection (b) of this
subsection, by the Secretary (A) to enjoin any act or practice
which violates any provision of this subchapter, or (B) to obtain
other appropriate equitable relief (i) to redress such violation or
(ii) to enforce any provision of this subchapter;"

															"(6) by the Secretary to collect any civil penalty under
subsection (i) of this section."

															[ Footnote 4 ]

															Because we conclude that Dedeaux's state common law claims fall
under the ERISA preemption clause and are not rescued by the saving
clause, we need not reach petitioner's argument that, when an
insurance company is engaged in the processing and review of claims
for benefits under an employee benefit plan, it is acting in place
of the plan's trustees, and should be protected from direct state
regulation by the deemer clause.

Summary: In Pilot Life Ins. Co. v. Dedeaux, the U.S. Supreme Court held that ERISA (Employee Retirement Income Security Act of 1974) preempts state common law claims for improper processing of benefit claims under an ERISA-regulated benefit plan. The Court found that the state law claims "related to" an employee benefit plan and were therefore preempted by ERISA's broad preemption clause. Additionally, the state law claims did not fall under ERISA's saving clause, which exempts state laws that "regulate insurance," as they were not specifically directed toward the insurance industry.


U.S. Supreme Court Firestone Tire & Rubber Co. v.
Bruch, 489
U.S. 101 (1989) Firestone Tire & Rubber Co. v.
Bruch No. 87-1054 Argued November 30,
1988 Decided February 21,
1989 489
U.S. 101 CERTIORARI TO THE UNITED STATES
COURT OF APPEALS FOR THE THIRD CIRCUIT Syllabus Petitioner Firestone Tire & Rubber Co. (Firestone)
maintained, and was the plan administrator and fiduciary of, a
termination pay plan and two other unfunded employee benefit plans
governed by the Employee Retirement Income Security Act of 1974
(ERISA), 29 U.S.C. § 1001 et seq. After Firestone sold its
Plastics Division to Occidental Petroleum Co. (Occidental),
respondents, Plastics Division employees who were rehired by
Occidental, sought severance benefits under the termination pay
plan, but Firestone denied their requests on the ground that there
had not been a "reduction in workforce" that would authorize
benefits under the plan's terms. Several respondents also sought
information about their benefits under all three plans pursuant to
§ 1024(b)(4)'s disclosure requirements, but Firestone denied those
requests on the ground that respondents were no longer plan
"participants" entitled to information under ERISA. Respondents
then brought suit for severance benefits under § 1132(a)(1)(B) and
for damages under §§ 1132(a)(1)(A) and (c)(1)(B) based on
Firestone's breach of its statutory disclosure obligation. The
Federal District Court granted summary judgment for Firestone,
holding that the company had satisfied its fiduciary duty as to the
benefits requests because its decision not to pay was not arbitrary
or capricious, and that it had no disclosure obligation to
respondents because they were not plan "participants" within the
meaning of § 1002(7) at the time they requested the information.
The Court of Appeals reversed and remanded, holding that benefits
denials should be subject to de novo judicial review,
rather than review under the arbitrary and capricious standard,
where the employer is itself the administrator and fiduciary of an
unfunded plan, since deference is unwarranted in that situation,
given the lack of assurance of impartiality on the employer's part.
The Court of Appeals also held that the right to disclosure of plan
information extends both to people who are entitled to plan
benefits and to those who claim to be, but are not, so
entitled. Held: 1. De novo review is the appropriate standard for reviewing
Firestone's denial of benefits to respondents. Pp. 489 U. S.
108 -115. Page 489 U. S. 102 (a) The arbitrary and capricious standard -- which was developed
under the Labor Management Relations Act, 1947 (LMRA) and adopted
by some federal courts for § 1132(a)(1)(B) actions in light of
ERISA's failure to provide an appropriate standard of review for
that section -- should not be imported into ERISA on a wholesale
basis. The raison d'etre for the LMRA standard -- the need
for a jurisdictional basis in benefits denial suits against joint
labor-management pension plan trustees whose decisions are not
expressly made reviewable by the LMRA -- is not present in ERISA,
which explicitly authorizes suits against fiduciaries and plan
administrators to remedy statutory violations, including breaches
of fiduciary duty and lack of compliance with plans. Without this
jurisdictional analogy, LMRA principles offer no support for the
adoption of the arbitrary and capricious standard insofar as § 1132
(a)(1)(B) is concerned. Pp. 489 U. S.
108 -110.

															(b) Principles of the law of trusts -- which must guide the
present determination under ERISA's language and legislative
history and this Court's decisions interpreting the statute --
establish that a denial of benefits challenged under §
1132(a)(1)(B) must be reviewed under a de novo standard
unless the benefit plan expressly gives the plan administrator or
fiduciary discretionary authority to determine eligibility for
benefits or to construe the plan's terms, in which cases a
deferential standard of review is appropriate. The latter exception
cannot aid Firestone, since there is no evidence that, under the
termination pay plan, the administrator has the power to construe
uncertain plan terms or that eligibility determinations are to be
given deference. Firestone's argument that plan interpretation is
inherently discretionary is belied by other settled trust law
principles whereby courts construe trust agreements without
deferring to either party's interpretation. Moreover, ERISA
provisions that define a fiduciary as one who "exercises any
discretionary authority," give him control over the plan's
operation and administration, and require that he provide a "full
and fair review" of claim denials cannot be interpreted to empower
him to exercise all his authority in a discretionary manner.
Adopting Firestone's interpretation would afford employees and
their beneficiaries less protection than they received under
pre-ERISA cases, which applied a de novo standard in
interpreting plans, a result that Congress could not have intended
in light of ERISA's stated purpose of "promot[ing] the interest of
employees and their beneficiaries." The fact that, after ERISA's
passage, Congress failed to act upon a bill to amend § 1132 to
provide de novo review of benefits denial decisions does
not indicate congressional approval of the arbitrary and capricious
standard that had by then been adopted by most courts, since the
bill's demise may have resulted from events having nothing to do
with Congress' views on the relative merits of the two Page 489 U. S. 103 standards, and since the views of a subsequent Congress form a
hazardous basis for inferring the intent of an earlier one.
Firestone's assertion that the de novo standard would
impose higher administrative and litigation costs on plans, and
thereby discourage employers from creating plans in contravention
of ERISA's spirit, is likewise unpersuasive, since there is nothing
to foreclose parties from agreeing upon a narrower standard of
review, and since the threat of increased litigation is not
sufficient to outweigh the reasons for a de novo standard.
Those reasons have nothing to do with the concern for impartiality
that guided the Court of Appeals, and the de novo standard
applies regardless of whether the plan at issue is funded or
unfunded and whether the administrator or fiduciary is operating
under a conflict of interest. If a plan gives discretion to such an
official, however, the conflict must be weighed as a factor in
determining whether there is an abuse of discretion. Pp. 489 U. S.
110 -115.

															2. A "participant" entitled to disclosure under § 1024(b)(4) and
to damages for failure to disclose under § 1132(c)(1)(B) does not
include a person who merely claims to be, but is not, entitled to a
plan benefit. The Court of Appeals' interpretation to the contrary
strays far from the statutory language, which does not say that all
"claimants" are entitled to disclosure; begs the question of who is
a "participant"; and renders the § 1002(7) definition of
"participant" superfluous. Rather, that definition of a
"participant" as "any employee or former employee . . . who is or
may become eligible" for benefits must be naturally read to mean
either an employee in, or reasonably expected to be in, currently
covered employment, or a former employee who has a reasonable
expectation of returning to covered employment or a colorable claim
to vested benefits. Moreover, a claimant must have a colorable
claim that (1) he will prevail in a suit for benefits, or that (2)
eligibility requirements will be fulfilled in the future in order
to establish that he "may be eligible." This view attributes
conventional meanings to the statutory language, since the "may
become eligible" phrase clearly encompasses all employees in
covered employment and former employees with a colorable claim to
vested benefits, but simply does not apply to a former employee who
has neither a reasonable expectation of returning to covered
employment nor a colorable claim to vested benefits. Congress'
purpose in enacting the ERISA disclosure provisions -- ensuring
that the individual participant knows exactly where he stands --
will not be thwarted by this natural reading of "participant,"
since a rational plan administrator or fiduciary faced with the
possibility of $100-a-day penalties under § 1132(c)(1)(B) for
failure to disclose would likely opt to provide a claimant with the
requested information if there were any doubt that he was a
participant, especially since the claimant could be required to pay
the reasonable Page 489 U. S. 104 costs of producing the information under § 1024(b)(4) and
Department of Labor regulations. Since the Court of Appeals did not
attempt to determine whether respondents were "participants" with
respect to the plans about which they sought information, it must
do so on remand. Pp. 489 U. S.
115 -118.

															828 F.2d 134, affirmed in part, reversed in part, and
remanded.

															O'CONNOR, J., delivered the opinion for a unanimous Court with
respect to Parts I and II, and the opinion of the Court with
respect to Part III, in which REHNQUIST, C.J., and BRENNAN, WHITE,
MARSHALL, BLACKMUN, STEVENS, O'CONNOR, and KENNEDY, JJ., joined.
SCALIA, J., filed an opinion concurring in part and concurring in
the judgment, post, p. 489 U. S.
119 .

															JUSTICE O'CONNOR delivered the opinion of the Court.

															This case presents two questions concerning the Employee
Retirement Income Security Act of 1974 (ERISA), 88 Stat. Page 489 U. S. 105 829, as amended, 29 U.S.C. § 1001 et seq. First, we address the appropriate standard of judicial review of
benefit determinations by fiduciaries or plan administrators under
ERISA. Second, we determine which persons are "participants"
entitled to obtain information about benefit plans covered by
ERISA. I Late in 1980, petitioner Firestone Tire and Rubber Company
(Firestone) sold, as going concerns, the five plants composing its
Plastics Division to Occidental Petroleum Company (Occidental).
Most of the approximately 500 salaried employees at the five plants
were rehired by Occidental and continued in their same positions
without interruption and at the same rates of pay. At the time of
the sale, Firestone maintained three pension and welfare benefit
plans for its employees: a termination pay plan, a retirement plan,
and a stock purchase plan. Firestone was the sole source of funding
for the plans, and had not established separate trust funds out of
which to pay the benefits from the plans. All three of the plans
were either "employee welfare benefit plans" or "employee pension
benefit plans" governed (albeit in different ways) by ERISA. By
operation of law, Firestone itself was the administrator, 29 U.S.C.
§ 1002(16)(A)(ii), and fiduciary, § 1002(21)(A), of each of these
"unfunded" plans. At the time of the sale of its Plastics Division,
Firestone was not aware that the termination pay plan was governed
by ERISA, and therefore had not set up a claims procedure, § 1133,
nor complied with ERISA's reporting and disclosure obligations, §§
1021-1031, with respect to that plan.

															Respondents, six Firestone employees who were rehired by
Occidental, sought severance benefits from Firestone under the
termination pay plan. In relevant part, that plan provides as
follows:

															"If your service is discontinued prior to the time you are
eligible for pension benefits, you will be given termination pay if
released because of a reduction in workforce Page 489 U. S. 106 or if you become physically or mentally unable to perform your
job."

															"The amount of termination pay you will receive will depend on
your period of credited company service."

															Several of the respondents also sought information from
Firestone regarding their benefits under all three of the plans
pursuant to certain ERISA disclosure provisions. See §§
1024(b)(4), 1025(a). Firestone denied respondents severance
benefits on the ground that the sale of the Plastics Division to
Occidental did not constitute a "reduction in workforce" within the
meaning of the termination pay plan. In addition, Firestone denied
the requests for information concerning benefits under the three
plans. Firestone concluded that respondents were not entitled to
the information because they were no longer "participants" in the
plans.

															Respondents then filed a class action on behalf of "former,
salaried, nonunion employees who worked in the five plants that
comprised the Plastics Division of Firestone." Complaint � 9, App.
94. The action was based on § 1132(a)(1), which provides that a

															"civil action may be brought . . . by a participant or
beneficiary [of a covered plan] . . . (A) for the relief provided
for in [§ 1132(c)], [and] (B) to recover benefits due to him under
the terms of his plan."

															In Count I of their complaint, respondents alleged that they
were entitled to severance benefits because Firestone's sale of the
Plastics Division to Occidental constituted a "reduction in
workforce" within the meaning of the termination pay plan.
Complaint �� 23-44, App. 98-104. In Count VII, respondents alleged
that they were entitled to damages under § 1132(c) because
Firestone had breached its reporting obligations under § 1025(a).
Complaint �� 87-94, App. 104-106.

															The District Court granted Firestone's motion for summary
judgment. 640 F.
Supp. 519 (ED Pa.1986). With respect to Count I, the District
Court held that Firestone had satisfied its fiduciary duty under
ERISA because its decision not to pay severance benefits to
respondents under the termination Page 489 U. S. 107 pay plan was not arbitrary or capricious. Id. at
521-526. With respect to Count VII, the District Court held that,
although § 1024(b)(4) imposes a duty on a plan administrator to
respond to written requests for information about the plan, that
duty extends only to requests by plan participants and
beneficiaries. Under ERISA. a plan participant is

															"any employee or former employee . . . who is or may become
eligible to receive a benefit of any type from an employee benefit
plan."

															§ 1002(7). A beneficiary is

															"a person designated by a participant, or by the terms of an
employee benefit plan, who is or may become entitled to a benefit
thereunder."

															§ 1002(8). The District Court concluded that respondents were
not entitled to damages under § 1132(c) because they were not plan
"participants" or "beneficiaries" at the time they requested
information from Firestone. 640 F. Supp. at 534.

															The Court of Appeals reversed the District Court's grant of
summary judgment on Counts I and VII. 828 F.2d 134 (CA3 1987). With
respect to Count I, the Court of Appeals acknowledged that most
federal courts have reviewed the denial of benefits by ERISA
fiduciaries and administrators under the arbitrary and capricious
standard. Id. at 138 (citing cases). It noted, however,
that the arbitrary and capricious standard had been softened in
cases where fiduciaries and administrators had some bias or adverse
interest. Id. at 138-140. See, e.g., Jung v. FMC
Corp., 755 F.2d 708, 711-712 (CA9 1985) (where "the employer's
denial of benefits to a class avoids a very considerable outlay [by
the employer], the reviewing court should consider that fact in
applying the arbitrary and capricious standard of review," and
"[l]ess deference should be given to the trustee's decision"). The
Court of Appeals held that, where an employer is itself the
fiduciary and administrator of an unfunded benefit plan, its
decision to deny benefits should be subject to de novo judicial review. It reasoned that, in such situations, deference is
unwarranted, given the lack of assurance of impartiality on Page 489 U. S. 108 the part of the employer. 828 F.2d at 137-145. With respect to
Count VII, the Court of Appeals held that the right to request and
receive information about an employee benefit plan

															"most sensibly extend[s] both to people who are in fact entitled
to a benefit under the plan and to those who claim to be, but in
fact are not." Id. at 153. Because the District Court had applied
different legal standards in granting summary judgment in favor of
Firestone on Counts I and VII, the Court of Appeals remanded the
case for further proceedings consistent with its opinion.

															We granted certiorari, 485 U.S. 986 (1988), to resolve the
conflicts among the Courts of Appeals as to the appropriate
standard of review in actions under § 1132(a)(1)(B) and the
interpretation of the term "participant" in § 1002(7). We now
affirm in part, reverse in part, and remand the case for further
proceedings. II ERISA provides "a panoply of remedial devices" for participants
and beneficiaries of benefit plans. Massachusetts Mutual Life
Ins. Co. v. Russell, 473 U. S. 134 , 473 U. S. 146 (1985). Respondents' action asserting that they were entitled to
benefits because the sale of Firestone's Plastics Division
constituted a "reduction in workforce" within the meaning of the
termination pay plan was based on the authority of § 1132(a)(1)(B).
That provision allows a suit to recover benefits due under the
plan, to enforce rights under the terms of the plan, and to obtain
a declaratory judgment of future entitlement to benefits under the
provisions of the plan contract. The discussion which follows is
limited to the appropriate standard of review in § 1132(a)(1)(B)
actions challenging denials of benefits based on plan
interpretations. We express no view as to the appropriate standard
of review for actions under other remedial provisions of ERISA. A Although it is a "comprehensive and reticulated statute," Nachman Corp. v. Pension
Benefit Guaranty Corp. , 446 Page 489 U. S. 109 U.S. 359, 446 U. S. 361 (1980), ERISA does not set out the appropriate standard of review
for actions under § 1132(a)(1)(B) challenging benefit eligibility
determinations. To fill this gap, federal courts have adopted the
arbitrary and capricious standard developed under 61 Stat. 157, 29
U.S.C. § 186(c), a provision of the Labor Management Relations Act,
1947 (LMRA). See, e.g., Struble v. New Jersey Brewery
Employees' Welfare Trust Fund, 732 F.2d 325, 333 (CA3 1984); Bayles v. Central States, Southeast and Southwest Areas Pension
Fund, 602 F.2d 97, 99-100, and n. 3 (CA5 1979). In light of
Congress' general intent to incorporate much of LMRA fiduciary law
into ERISA, see NLRB v. Amax Coal Co., 453 U.
S. 322 , 453 U. S. 32 (1981), and because ERISA, like the LMRA, imposes a duty of loyalty
on fiduciaries and plan administrators, Firestone argues that the
LMRA arbitrary and capricious standard should apply to ERISA
actions. See Brief for Petitioners 13-14. A comparison of
the LMRA and ERISA, however, shows that the wholesale importation
of the arbitrary and capricious standard into ERISA is
unwarranted.

															In relevant part, 29 U.S.C. § 186(c) authorizes unions and
employers to set up pension plans jointly and provides that
contributions to such plans be made "for the sole and exclusive
benefit of the employees . . . and their families and dependents."
The LMRA does not provide for judicial review of the decisions of
LMRA trustees. Federal courts adopted the arbitrary and capricious
standard both as a standard of review and, more importantly, as a
means of asserting jurisdiction over suits under § 186(c) by
beneficiaries of LMRA plans who were denied benefits by trustees. See Van Boxel v. Journal Co. Employees' Pension Trust, 836
F.2d 1048, 1052 (CA7 1987) ("[W]hen a plan provision as interpreted
had the effect of denying an application for benefits unreasonably,
or as it came to be said, arbitrarily and capriciously, courts
would hold that the plan as structured' was not for the sole
and exclusive benefit of the employees, so that the denial Page 489 U. S.
110 of benefits violated [§ 186(c)])." See also Comment, The Arbitrary and Capricious Standard Under ERISA: Its
Origins and Application, 23 Duquesne L.Rev. 1033, 1037-1039 (1985).
Unlike the LMRA, ERISA explicitly authorizes suits against
fiduciaries and plan administrators to remedy statutory violations,
including breaches of fiduciary duty and lack of compliance with
benefit plans. See 29 U.S.C. §§ 1132(a), 1132(f). See
generally Pilot Life Ins. Co. v. Dedeaux, 481 U. S.
41 , 481 U. S. 52 -57
(1987) (describing scope of § 1132(a)). Thus, the raison
d'etre for the LMRA arbitrary and capricious standard -- the
need for a jurisdictional basis in suits against trustees -- is not
present in ERISA. See Note, Judicial Review of Fiduciary
Claim Denials Under ERISA: An Alternative to the Arbitrary and
Capricious Test, 71 Cornell L.Rev. 986, 994, n. 40 (1986). Without
this jurisdictional analogy, LMRA principles offer no support for
the adoption of the arbitrary and capricious standard insofar as §
1132(a)(1)(B) is concerned. B ERISA abounds with the language and terminology of trust law. See, e.g., 29 U.S.C. §§ 1002(7) ("participant"), 1002(8)
("beneficiary"), 1002(21)(A) ("fiduciary"), 1103(a) ("trustee"),
1104 ("fiduciary duties"). ERISA's legislative history confirms
that the Act's fiduciary responsibility provisions, 29 U.S.C. §§
1101-1114, "codif[y] and mak[e] applicable to [ERISA] fiduciaries
certain principles developed in the evolution of the law of
trusts." H.R.Rep. No. 93-533, p. 11 (1973). Given this language and
history, we have held that courts are to develop a "federal common
law of rights and obligations under ERISA-regulated plans." Pilot Life Ins. Co. v. Dedeaux, supra, at 481 U. S. 56 . See also Franchise Tax Board v. Construction Laborers Vacation
Trust, 463 U. S. 1 , 463 U. S. 24 , n.
26 (1983) (" [A] body of Federal substantive law will be
developed by the courts to deal with issues involving rights and
obligations under private welfare and pension plans'") (quoting 129
Cong.Rec. 29942 (1974) (remarks of Sen. Javits)). Page 489 U. S.
111 In determining the appropriate standard of review for
actions under § 1132(a)(1)(B), we are guided by principles of trust
law. Central States, Southeast and Southwest Areas Pension Fund
v. Central Transport, Inc., 472 U. S. 559 , 472 U. S. 570 (1985). Trust principles make a deferential standard of review
appropriate when a trustee exercises discretionary powers. See Restatement (Second) of Trusts § 187 (1959) ("Where
discretion is conferred upon the trustee with respect to the
exercise of a power, its exercise is not subject to control by the
court except to prevent an abuse by the trustee of his
discretion"). See also G. Bogert & G. Bogert, Law of
Trusts and Trustees § 560, pp.193-208 (2d. rev. ed.1980). A trustee
may be given power to construe disputed or doubtful terms, and in
such circumstances the trustee's interpretation will not be
disturbed if reasonable. Id. § 559, at 169-171. Whether
"the exercise of a power is permissive or mandatory depends upon
the terms of the trust." 3 W. Fratcher, Scott on Trusts § 187, p.
14 (4th ed.1988). Hence, over a century ago we remarked that

															"[w]hen trustees are in existence, and capable of acting, a
court of equity will not interfere to control them in the exercise
of a discretion vested in them by the instrument under
which they act." Nichols v. Eaton, 91 U. S. 716 , 91 U. S.
724 -725 (1875) (emphasis added). See also Central
States, Southeast and Southwest Areas Pension Fund v. Central
Transport, Inc., supra, at 568 ("The trustees' determination
that the trust documents authorize their access to records here in
dispute has significant weight, for the trust agreement explicitly
provides that any construction [of the agreement's provisions]
adopted by the Trustees in good faith shall be binding upon the
Union, Employees, and Employers'"). Firestone can seek no shelter
in these principles of trust law, however, for there is no evidence
that under Firestone's termination pay plan the administrator has
the power to construe uncertain terms or that eligibility
determinations are to be given deference. See Brief for
Respondents Page 489 U. S. 112 24-25; Reply Brief for Petitioners 7, n. 2; Brief for United
States as Amicus Curiae 14-15, n. 11.

															Finding no support in the language of its termination pay plan
for the arbitrary and capricious standard, Firestone argues that,
as a matter of trust law, the interpretation of the terms of a plan
is an inherently discretionary function. But other settled
principles of trust law, which point to de novo review of
benefit eligibility determinations based on plan interpretations,
belie this contention. As they do with contractual provisions,
courts construe terms in trust agreements without deferring to
either party's interpretation.

															"The extent of the duties and powers of a trustee is determined
by the rules of law that are applicable to the situation, and not
the rules that the trustee or his attorney believes to be
applicable, and by the terms of the trust as the court may
interpret them, and not as they may be interpreted by the
trustee himself or by his attorney."

															3 W. Fratcher, Scott on Trusts § 201, at 221 (emphasis added). A
trustee who is in doubt as to the interpretation of the instrument
can protect himself by obtaining instructions from the court.
Bogert & Bogert supra, § 559, at 162-168; Restatement
(Second) of Trusts § 201, Comment b (1959). See also United
States v. Mason, 412 U. S. 391 , 412 U. S. 399 (1973). The terms of trusts created by written instruments are

															"determined by the provisions of the instrument as interpreted
in light of all the circumstances and such other evidence of the
intention of the settlor with respect to the trust as is not
inadmissible."

															Restatement (Second) of Trusts § 4, Comment d (1959).

															The trust law de novo standard of review is consistent
with the judicial interpretation of employee benefit plans prior to
the enactment of ERISA. Actions challenging an employer's denial of
benefits before the enactment of ERISA were governed by principles
of contract law. If the plan did not give the employer or
administrator discretionary or final authority to construe
uncertain terms, the court reviewed the employee's claim as it
would have any other contract claim -- Page 489 U. S. 113 by looking to the terms of the plan and other manifestations of
the parties' intent. See, e.g., Conner v. Phoenix Steel
Corp., 249 A.2d
866 (Del.1969); Atlantic Steel Co. v. Kitchens, 228
Ga. 708, 187 S.E.2d 824 (1972); Sigman v. Rudolph Wurlitzer Co., 57 Ohio App. 4,
11 N.E.2d 878 (1937).

															Despite these principles of trust law pointing to a de
novo standard of review fOr claims like respondents',
Firestone would have us read ERISA to require the application of
the arbitrary and capricious standard to such claims. ERISA defines
a fiduciary as one who

															"exercises any discretionary authority or discretionary control
respecting management of [a] plan or exercises any authority or
control respecting management or disposition of its assets."

															29 U.S.C. § 1002(21)(A)(i). A fiduciary has "authority to
control and manage the operation and administration of the plan," §
1102(a)(1), and must provide a "full and fair review" of claim
denials, § 1133(2). From these provisions, Firestone concludes that
an ERISA plan administrator, fiduciary, or trustee is empowered to
exercise all his authority in a discretionary manner subject only
to review for arbitrariness and capriciousness. But the provisions
relied upon so heavily by Firestone do not characterize a fiduciary
as one who exercises entirely discretionary authority or
control. Rather, one is a fiduciary to the extent he exercises any discretionary authority or control. Cf. United
Mine Workers of America Health and Retirement Funds v.
Robinson, 455 U. S. 562 , 455 U. S.
573 -574 (1982) (common law of trusts did not alter
nondiscretionary obligation of trustees to enforce eligibility
requirements as required by LMRA trust agreement).

															ERISA was enacted "to promote the interests of employees and
their beneficiaries in employee benefit plans," Shaw v. Delta
Airlines, Inc., 463 U. S. 85 , 463 U. S. 90 (1983), and "to protect contractually defined benefits," Massachusetts Mutual Life Ins. Co. v. Russell, 473 U.S. at 473 U. S. 148 . See generally 29 U.S.C. § 1001 (setting forth
congressional findings and declarations of policy regarding ERISA).
Adopting Firestone's Page 489 U. S. 114 reading of ERISA would require us to impose a standard of review
that would afford less protection to employees and their
beneficiaries than they enjoyed before ERISA was enacted.
Nevertheless, Firestone maintains that congressional action after
the passage of ERISA indicates that Congress intended ERISA claims
to be reviewed under the arbitrary and capricious standard. At a
time when most federal courts had adopted the arbitrary and
capricious standard of review, a bill was introduced in Congress to
amend § 1132 by providing de novo review of decisions
denying benefits. See H.R. 6226, 97th Cong., 2d Sess.
(1982), reprinted in Pension Legislation: Hearings on H.R.
1614 et al. before the Subcommittee on Labor-Management
Relations of the House Committee on Education and Labor, 97th
Cong., 2d Sess., 60 (1983). Because the bill was never enacted,
Firestone asserts that we should conclude that Congress was
satisfied with the arbitrary and capricious standard. See Brief for Petitioners 19-20. We do not think that this bit of
legislative inaction carries the day for Firestone. Though
"instructive," failure to act on the proposed bill is not
conclusive of Congress' views on the appropriate standard of
review. Bowsher v. Merck & Co., 460 U.
S. 824 , 460 U. S. 837 ,
n. 12 (1983). The bill's demise may have been the result of events
that had nothing to do with Congress' view on the propriety of de novo review. Without more, we cannot ascribe to
Congress any acquiescence in the arbitrary and capricious standard.
"[T]he views of a subsequent Congress form a hazardous basis for
inferring the intent of an earlier one." United States v.
Price, 361 U. S. 304 , 361 U. S. 313 (1960).

															Firestone and its amici also assert that a de
novo standard would contravene the spirit of ERISA because it
would impose much higher administrative and litigation costs, and
therefore discourage employers from creating benefit plans. See, e.g., Brief for American Council of Life Insurance et al. as Amici Curiae 10-11. Because even under
the arbitrary and capricious standard, an employer's denial of
benefits could Page 489 U. S. 115 be subject to judicial review, the assumption seems to be that a de novo standard would encourage more litigation by
employees, participants, and beneficiaries who wish to assert their
right to benefits. Neither general principles of trust law nor a
concern for impartial decisionmaking, however, forecloses parties
from agreeing upon a narrower standard of review. Moreover, as to
both funded and unfunded plans, the threat of increased litigation
is not sufficient to outweigh the reasons for a de novo standard that we have already explained.

															As this case aptly demonstrates, the validity of a claim to
benefits under an ERISA plan is likely to turn on the
interpretation of terms in the plan at issue. Consistent with
established principles of trust law, we hold that a denial of
benefits challenged under § 1132(a)(1)(B) is to be reviewed under a de novo standard unless the benefit plan gives the
administrator or fiduciary discretionary authority to determine
eligibility for benefits or to construe the terms of the plan.
Because we do not rest our decision on the concern for impartiality
that guided the Court of Appeals, see 828 F.2d at 143-146,
we need not distinguish between types of plans or focus on the
motivations of plan administrators and fiduciaries. Thus, for
purposes of actions under § 1132(a)(1)(B), the de novo standard of review applies regardless of whether the plan at issue
is funded or unfunded and regardless of whether the administrator
or fiduciary is operating under a possible or actual conflict of
interest. Of course, if a benefit plan gives discretion to an
administrator or fiduciary who is operating under a conflict of
interest, that conflict must be weighed as a "facto[r] in
determining whether there is an abuse of discretion." Restatement
(Second) of Trusts § 187, Comment d (1959) III Respondents unsuccessfully sought plan information from
Firestone pursuant to 29 U.S.C. § 1024(b)(4), one of Page 489 U. S. 116 ERISA's disclosure provisions. That provision reads as
follows:

															"The administrator shall, upon written request of any
participant or beneficiary, furnish a copy of the latest updated
summary plan description, plan description, and the latest annual
report, any terminal report, the bargaining agreement, trust
agreement, contract, or other instruments under which the plan is
established or operated. The administrator may make a reasonable
charge to cover the cost of furnishing such complete copies. The
Secretary [of Labor] may by regulation prescribe the maximum amount
which will constitute a reasonable charge under the preceding
sentence."

															When Firestone did not comply with their request for
information, respondents sought damages under 29 U.S.C. §
1132(c)(1)(B) (1982 ed., Supp. IV), which provides that

															"[a]ny administrator . . . who fails or refuses to comply with a
request for any information which such administrator is required by
this subchapter to furnish to a participant or beneficiary . . .
may in the court's discretion be personally liable to such
participant or beneficiary in the amount of up to $100 a day."

															Respondents have not alleged that they are "beneficiaries" as
defined in § 1002(8). See Complaint �� 87-95, App.
104-106. The dispute in this case therefore centers on the
definition of the term "participant," which is found in §
1002(7):

															"The term 'participant' means any employee or former employee of
an employer, or any member or former member of an employee
organization, who is or may become eligible to receive a benefit of
any type from an employee benefit plan which covers employees of
such employer or members of such organization, or whose
beneficiaries may be eligible to receive any such benefit."

															The Court of Appeals noted that § 1132(a)(1) allows suits for
benefits "by a participant or beneficiary." Finding that it would
be illogical to say that a person could only bring a claim for
benefits if he or she was entitled to benefits, the Court of Page 489 U. S. 117 Appeals reasoned that § 1132(a)(1) should be read to mean that
" a civil action may be brought by someone who claims to be a
participant or beneficiary.'" 828 F.2d at 152. It went on to
conclude that the same interpretation should apply with respect to
§ 1024(b)(4): "A provision such as that one, entitling people to information
on the extent of their benefits, would most sensibly extend both to
people who are in fact entitled to a benefit under the plan and to
those who claim to be, but in fact are not." Id. at 153.

															The Court of Appeals

															"concede[d] that it is expensive and inefficient to provide
people with information about benefits -- and to permit them to
obtain damages if information is withheld -- if they are clearly
not entitled to the benefits about which they are informed." Ibid. It tried to solve this dilemma by suggesting that
courts use discretion and not award damages if the employee's claim
for benefits was not colorable or if the employer did not act in
bad faith. There is, however, a more fundamental problem with the
Court of Appeals' interpretation of the term "participant": it
strays far from the statutory language. Congress did not say that
all "claimants" could receive information about benefit plans. To
say that a "participant" is any person who claims to be one begs
the question of who is a "participant" and renders the definition
set forth in § 1002(7) superfluous. Indeed, respondents admitted at
oral argument that "the words point against [them]." Tr. of Oral
Arg. 40.

															In our view, the term "participant" is naturally read to mean
either "employees in, or reasonably expected to be in, currently
covered employment," Saladino v. I.L.G.W.U. National Retirement
Fund, 754 F.2d 473, 476 (CA2 1985), or former employees who
"have . . . a reasonable expectation of returning to covered
employment" or who have "a colorable claim" to vested benefits, Kuntz v. Reese, 785 F.2d 1410, 1411 (CA9) (per curiam), cert. denied, 479 U.S. 916 (1986). In order to establish
that he or she "may become eligible" for benefits, a claimant must
have a colorable claim that (1) he or she will prevail in a suit
for benefits, or that (2) eligibility requirements Page 489 U. S. 118 will be fulfilled in the future.

															"This view attributes conventional meanings to the statutory
language, since all employees in covered employment and former
employees with a colorable claim to vested benefits 'may become
eligible.' A former employee who has neither a reasonable
expectation of returning to covered employment nor a colorable
claim to vested benefits, however, simply does not fit within the
[phrase] 'may become eligible.'" Saladino v. I.L.G.W.U. National Retirement Fund, supra, at 476.

															We do not think Congress' purpose in enacting the ERISA
disclosure provisions -- ensuring that "the individual participant
knows exactly where he stands with respect to the plan," H.R.Rep.
No. 93-533, p. 11 (1973) -- will be thwarted by a natural reading
of the term "participant." Faced with the possibility of $100 a day
in penalties under § 1132(c)(1)(B), a rational plan administrator
or fiduciary would likely opt to provide a claimant with the
information requested if there is any doubt as to whether the
claimant is a "participant," especially when the reasonable costs
of producing the information can be recovered. See 29 CFR
§ 2520.104b-30(b) (1987) (the "charge assessed by the plan
administrator to cover the costs of furnishing documents is
reasonable if it is equal to the actual cost per page to the plan
for the least expensive means of acceptable reproduction, but in no
event may such charge exceed 25 cents per page").

															The Court of Appeals did not attempt to determine whether
respondents were "participants" under § 1002(7). See 828
F.2d at 152-153. We likewise express no views as to whether
respondents were "participants" with respect to the benefit plans
about which they sought information. Those questions are best left
to the Court of Appeals on remand.

															For the reasons set forth above, the decision of the Court of
Appeals is affirmed in part and reversed in part, and the case is
remanded for proceedings consistent with this opinion. So ordered. Page 489 U. S. 119 JUSTICE SCALIA, concurring in part and concurring in the
judgment.

															I join the judgment of the Court, and Parts I and II of its
opinion. I agree with its disposition, but not all of its
reasoning, regarding Part III.

															The Court holds that a person with a colorable claim is one who
" may become eligible' for benefits" within the meaning of the
statutory definition of "participant," because, it reasons, such a
claim raises the possibility that "he or she will prevail in a suit
for benefits." Ante at 489 U. S. 117 .
The relevant portion of the definition, however, refers to an
employee "who is or may become eligible to receive a
benefit." There is an obvious parallelism here: one "may become"
eligible by acquiring, in the future, the same characteristic of
eligibility that someone who "is" eligible now possesses. And I
find it contrary to normal usage to think that the characteristic
of "being" eligible consists of "having prevailed in a suit for
benefits." Eligibility exists not merely during the brief period
between formal judgment of entitlement and payment of benefits.
Rather, one is eligible whether or not he has yet been
adjudicated to be -- and similarly one can become eligible
before he is adjudicated to be. It follows that the phrase "may
become eligible" has nothing to do with the probabilities of
winning a suit. I think that, properly read, the definition of
"participant" embraces those whose benefits have vested, and those
who (by reason of current or former employment) have some potential
to receive the vesting of benefits in the future, but not those who
have a good argument that benefits have vested, even though they
have not. Applying the definition in this fashion would mean, of course,
that, if the employer guesses right that a person with a colorable
claim is in fact not entitled to benefits, he can deny that person
the information required to be provided under 29 U.S.C. §
1024(b)(4) without paying the $100-a-day damages assessable for
breach of that obligation, 29 U.S.C. § 1132(c)(1)(B) (1982 ed.,
Supp. IV). Since, however, no employer Page 489 U. S. 120 sensible enough to consult the law would be senseless enough to
take that risk, giving the term its defined meaning would produce
precisely the same incentive for disclosure as the Court's
opinion.

Summary:
Here is a summary of the case:

The case of Firestone Tire & Rubber Co. v. Bruch dealt with the denial of severance benefits and requests for information about employee benefit plans. The respondents, former employees of Firestone, sought severance benefits after the company sold its Plastics Division, but Firestone denied their requests. The respondents also asked for information about their benefits, but Firestone refused, claiming they were no longer plan "participants." The courts disagreed on the appropriate standard of review for benefits denials and the extent of the right to disclosure of plan information.

The Supreme Court held that a de novo review, rather than an arbitrary and capricious standard, should be used to review Firestone's denial of benefits. They also decided that the right to disclosure extends to those who claim to be entitled to benefits, even if they are not. The Court affirmed in part, reversed in part, and remanded the case for further proceedings.

This case sets a precedent for how courts should review benefit denials and who has the right to request information about employee benefit plans. It highlights the importance of a fair and impartial review process and ensures that employees have access to the information they need to understand their benefits.