Massachusetts Mutual Life Insurance Co. v. Russell

Doris Russell (plaintiff) was an employee of Massachusetts Mutual Life Insurance Company (Mutual) (defendant). Russell was a beneficiary under two employee benefit plans administered by Mutual, funded by the company’s general assets, and governed by the Employee Retirement Income Security Act (ERISA). Russell was disabled due to back problems and was paid benefits until October 1979. The benefits were cancelled on a surgeon’s recommendation, and Russell requested review of the decision. Russell submitted a psychiatrist’s testimony that she had a psychosomatic disability. Mutual reinstated benefits in March 1980 and paid contractual retroactive benefits dating back to October 1979. Russell sued in California state court for damages caused by the denial of benefits from October 1979 to March 1980. Russell stated that during the coverage gap, her husband was forced to deplete his retirement savings, aggravating her psychological ailment. Russell asserted that the 132-day delay in processing her claim violated Mutual’s fiduciary duty under ERISA and provided causes of action under § 409(a) that could be claimed by plan beneficiaries under § 502(a)(2). Mutual removed the case to federal district court, which granted summary judgment in favor of Mutual. Russell appealed to the United States Court of Appeals for the Ninth Circuit, which reversed the judgment as to the ERISA claims. The court of appeals found that ERISA authorized extracontractual damages for Russell in §§ 409(a) and 502(a)(2) as appropriate equitable relief that followed the legislative intent behind ERISA. Mutual appealed to the United States Supreme Court.