Mertens v. Hewitt Associates, and the ERISA Liability of the Professional Service Provider

Abstract

In Mertens v. Hewitt Associates, the United States Supreme Court held that money damages cannot be recovered as equitable relief under section 502(a)(3) of the Employee Retirement Income Security Act of 1974 (ERISA) when the liability of professional service providers who are not fiduciaries under ERISA is in question. Nonetheless, the author main tains, Mertens is not the last word on ERISA liability of the professional providing services to ERISA plans. The 5-4 decision reflects a sharp split among members of the Court as to the appropriate construction to be given ERISA's remedial provisions. In both the discussion of the money damages issue and the undecided issue of whether the knowing claim underlying Mertens is available at all, the Court was divided. The dissent ing Justices held that the statute commands a broad construction consistent with its remedial purpose and its foundation in the common law of trusts. The majority, on the other hand, rejected any interpretation which lay outside the statute's text. Mertens is important to the employee benefits practitioner, the author writes, not only because its holding reduces the risk that the professional will be subject to tenuous suits aimed primarily at the deep pocket, but also because it raises new questions in connection with the theories most favored by ERISA plaintiffs seeking to recover from in dependent service providers: the knowing participation cause of action and the claim that the service provider is liable as an ERISA fiduciary for plan losses.