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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 ERISA29 U.
Occidentalrespondents, Plastics Division Us 101 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.
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. De novo review is the appropriate standard for reviewing Firestone's denial of benefits to respondents.
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.
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 Us 101 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 Us 101 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.
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. Rather, that definition of a "participant" as "any employee or former employee.
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. 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.
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.
Most of the approximately 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: 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. 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: 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.
The District Court granted Firestone's motion for summary judgment.
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. 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.
It noted, however, that the arbitrary and capricious standard had been softened in cases where fiduciaries and administrators had some bias or adverse interest. 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 U. 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.
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, U. We now affirm in part, reverse in part, and remand the case for further proceedings.
Massachusetts Mutual Life Ins. 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.
We express no view as to the appropriate standard of review for actions under other remedial provisions of ERISA.View detailed information and reviews for N US Highway in Hoodsport, Washington and get driving directions with road conditions and live traffic updates along the way.
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