## Facts

- Ameritech Pension Trust (APT) was an ERISA-governed employee pension plan administered by Ameritech Corporation, with Harris Trust and Savings Bank as trustee and fiduciary.
- In the late 1980s, APT used Salomon Smith Barney Inc. to execute nondiscretionary trades as directed by APT’s fiduciaries.
- For purposes of the case, Salomon was treated as a nonfiduciary “party in interest” under ERISA.
- Harris alleged that Salomon sold the plan interests in motel properties for about $21 million in a transaction directed by another plan fiduciary.
- The motel interests allegedly became essentially worthless.
- The case proceeded on the assumption that the transaction was prohibited by ERISA § 406(a) and not exempt under § 408.
- Harris sued Salomon under ERISA § 502(a)(3) seeking equitable relief, including rescission, restitution (with interest), and disgorgement of profits.

## Issues

1. Whether ERISA § 502(a)(3) authorizes a fiduciary to sue a nonfiduciary “party in interest” that is the counterparty to a transaction prohibited by ERISA § 406(a).
2. Whether the absence of an express substantive ERISA duty imposed on nonfiduciary parties in interest bars § 502(a)(3) equitable claims against them.

## Decision

- The Supreme Court unanimously reversed the Seventh Circuit and remanded.
- The Court held that ERISA § 502(a)(3) authorizes suits for “appropriate equitable relief” against nonfiduciary parties in interest that participate in prohibited § 406(a) transactions.
- The Court rejected the view that liability under § 502(a)(3) depends on an ERISA provision expressly imposing duties on the nonfiduciary defendant.
- The Court relied on trust-law principles recognizing equitable remedies against third parties who receive or benefit from trust property in breach-related transactions, subject to traditional equitable conditions such as notice.

## Legal Principles

- ERISA § 502(a)(3) is a remedial provision that focuses on who may sue (participant, beneficiary, or fiduciary) and what relief may be sought (appropriate equitable relief), and it does not limit defendants to fiduciaries.
- A nonfiduciary “party in interest” may be sued under § 502(a)(3) for equitable remedies arising from a non-exempt prohibited transaction under § 406(a).
- Traditional equitable remedies available under § 502(a)(3) include rescission, restitution, and disgorgement, consistent with trust-law practice.
- Equitable relief against a nonfiduciary generally requires satisfaction of ordinary equitable conditions, including the transferee’s knowledge or notice where relevant.

## Conclusion

ERISA allows plan fiduciaries, participants, and beneficiaries to seek appropriate equitable relief under § 502(a)(3) directly from nonfiduciary parties in interest that engage in prohibited, non-exempt transactions with a plan, subject to traditional equitable limits; the case was remanded for further proceedings.


Harris Tr. & Sav. Bank v. Salomon Smith Barney Inc., 530 U.S. 238 (2000)