Guidry v. Sheet Metal Workers National Pension Fund

by Harry Blackmun

United States Supreme Court

493 U.S. 365

Guidry  v.  Sheet Metal Workers National Pension Fund

No. 88-1105  Argued: Nov. 29, 1989. --- Decided: Jan 17, 1990

Syllabus

Petitioner Guidry, a former official of respondent union and trustee of one of respondent pension plans, pleaded guilty to embezzling funds from the union in violation of § 501(c) of the Labor-Management Reporting and Disclosure Act of 1959 (LMRDA). Since his union employment had made him eligible for benefits from respondent plans, he filed suit in the District Court against two of the plans when they determined that he had forfeited his right to benefits as a result of his criminal activity. The union intervened, joined the third plan as a party, and stipulated with Guidry to the entry of a money judgment in its favor. The court rejected the funds' contention that Guidry had forfeited his right to benefits. It ruled, however, that a constructive trust in the union's favor should be imposed on Guidry's pension benefits until the judgment was satisfied. Reading the Employee Retirement Income Security Act of 1974 (ERISA) in pari materia with, inter alia, the LMRDA-which seeks to combat union officials' corruption and to protect membership interests-the court concluded that a narrow exception to ERISA's prohibition on assignment or alienation of pension benefits, § 206(d)(1), is appropriate where "the viability of a union and the members' pension plans was damaged by the knavery of a union official." The Court of Appeals affirmed. Relying on ERISA § 409(a)-which makes a faithless plan fiduciary personally liable for losses to the plan resulting from his breach and subjects him to other appropriate equitable or remedial relief-the court concluded that § 206(d)(1) did not preclude the imposition of the constructive trust, deeming it unlikely that Congress intended to ignore equitable principles by protecting individuals such as Guidry from the consequences of their misconduct.

Held: The constructive trust violates ERISA's prohibition on assignment or alienation of pension benefits. Pp. 371-377.

(a) The constructive trust remedy is prohibited by § 206(d)(1) unless some exception to the general statutory ban is applicable. Cf. Mackey v. Lanier Collection Agency & Service, Inc., 486 U.S. 825, 836-837, 108 S.Ct. 2182, 2188-2189, 100 L.Ed.2d 836. P. 371-372.

(b) It is unnecessary to decide whether § 409(a)'s remedial provisions supersede § 206(d)(1)'s bar, since Guidry has not been found to have breached any fiduciary duty to the pension plans. Although his actions may have harmed the union's members who were fund beneficiaries, he was convicted of stealing money only from the union, and the funds and the union are distinct legal entities. Pp. 372-374.

(c) Assuming that LMRDA § 501 authorizes the imposition of a constructive trust when a union officer has breached his fiduciary duties, that authorization does not override ERISA's anti-alienation provision. Contrary to respondents' argument, the LMRDA will not be modified, impaired, or superseded in violation of ERISA § 514(d)'s saving clause if ERISA pension plans cannot be used to effectuate the LMRDA's remedial goals. A broad reading of § 514(d) would eviscerate § 206(d)'s protections by rendering § 206(d)(1) inapplicable whenever a judgment creditor relied on the remedial provisions of a federal statute. The two statutes are more persuasively reconciled by holding that the LMRDA determines what sort of judgment the aggrieved party may obtain while ERISA governs the narrow question whether that judgment may be collected through a particular means. Pp. 374-376.

(d) It is also inappropriate to approve any generalized equitable exception to ERISA's anti-alienation provision. The identification of exceptions to the statutory bar is a task for Congress, not the courts. An equitable exception to an antigarnishment rule would be especially problematic, since a restriction on garnishment can be defended only on the view that the effectuation of certain broad social policies sometimes takes precedence over the desire to do equity between particular parties. Pp. 376-377.

856 F.2d 1457, reversed and remanded.

BLACKMUN, J., delivered the opinion of the Court, in which REHNQUIST, C.J., and BRENNAN, WHITE, STEVENS, O'CONNOR, SCALIA, and KENNEDY, JJ., joined, and in all but Part II-C of which MARSHALL, J., joined.

Eldon E. Silverman, Denver, Colo., for petitioner.

Joseph M. Goldhammer, Denver, Colo., for respondents.

Justice BLACKMUN delivered the opinion of the Court.

Notes