Firestone Tire & Rubber Co. v. Bruch (SCOTUS 1989)

Summary

Justice O'Connor's opinion held that benefit denials based on plan interpretations challenged under ERISA § 1132(a)(1)(B) receive de novo review unless the plan grants the administrator or fiduciary discretionary authority. When such discretion exists, a conflict of interest is a factor in reviewing for abuse of discretion. The Court also held that participant status does not extend to everyone merely claiming benefits; it includes covered employees and qualifying former employees, including those with colorable claims to vested benefits. The Court affirmed in part, reversed in part, and remanded without deciding whether respondents qualified as participants. Justice Scalia, writing alone, joined Parts I and II and the judgment but disagreed with Part III's reasoning: he would require actual vested benefits or the potential for future vesting, rather than a colorable but potentially unsuccessful claim to vested benefits.

Holding

Standard of review for benefit denials based on plan interpretations.. A denial challenged under § 1132(a)(1)(B) is reviewed de novo unless the plan gives the administrator or fiduciary discretionary authority to determine eligibility or construe plan terms. This rule applies to funded and unfunded plans alike. Where discretion is granted, a conflict of interest must be weighed in determining whether discretion was abused.

Meaning of participant for ERISA disclosure obligations.. Participants include employees in, or reasonably expected to be in, covered employment and former employees with a reasonable expectation of returning to covered employment or a colorable claim to vested benefits. A claim of possible future eligibility must be colorable as to success in a benefits action or fulfillment of eligibility requirements in the future. Merely claiming participant status is insufficient.

Firestone Tire & Rubber Co. v. Bruch

Summary

Holding

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