CURTIS GUIDRY, PETITIONER V. SHEET METAL WORKERS' NATIONAL PENSION
FUND, ET AL.

   No. 88-1105

   In the Supreme Court of the United States

   October Term, 1988

   On Petition for a Writ of Certiorari to the United States Court of
Appeals for the Tenth Circuit

   Brief for the United States as Amicus Curiae

   This brief is submitted in response to the Court's invitation to
the Solicitor General to express the views of the United States.

           TABLE OF CONTENTS
   Questions Presented
   Statement
   Argument
   Conclusion

                          QUESTIONS PRESENTED

   1. Whether the anti-alienation provision of the Employee Retirement
Income Security Act of 1974 (ERISA), 29 U.S.C. 1056(d)(1), bars the
imposition of a constructive trust on the pension benefits of a former
union officer who embezzled union funds.

   2. If ERISA does not bar such a remedy, whether 75 percent of
petitioner's monthly pension benefits are protected from garnishment
by the federal Consumer Credit Protection Act, even if petitioner did
not object to the garnishment in accordance with the procedural
requirements of state garnishment law.

                               STATEMENT

   1. Petitioner Curtis Guidry was formerly employed as the chief
executive officer, business manager, and financial secretary-treasurer
of respondent Sheet Metal Workers' International Association, Local
No. 9 (the Union).  He also served as a trustee of the Union's pension
and welfare plans.  In 1982, petitioner pleaded guilty to violating
the Labor-Management Reporting and Disclosure Act of 1959 (LMRDA), 29
U.S.C. 501(c), by embezzling more than $377,000 from the Union.  As
the Union's chief financial officer, petitioner was able to use
several methods to embezzle from the Union.  For example, he
transferred money from the Union's checking account to his own account
and also made unauthorized cash withdrawals from the Union's savings
account for his personal use.  In addition, he deposited into his
personal account checks payable to the Union, including checks
received by the Union from the pension and welfare plans for
administrative services.  Petitioner was charged with, and convicted
of, embezzling from the Union only;  there was no allegation he had
stolen from the pension or welfare plans.  Pet. App. A2-A3, B2,
C8-C10;  App., infra, 1a-2a.

   After serving a prison term and resigning from his employment with
the Union, petitioner applied for early retirement benefits from the
three respondent pension plans.  When two of the plans refused to pay,
he brought this action against those two plans under 29 U.S.C.
1132(a)(1)(B), a provision of the Employee Retirement Income Security
Act of 1974 (ERISA), to enforce his right to accrued and future
benefits.  While not disputing that petitioner was otherwise entitled
to benefits, the plans contended that he had forfeited his eligibility
by his misconduct.  The Union intervened, joined the third pension
plan as a party, and asserted six claims against petitioner.  The
first claim alleged breaches of petitioner's fiduciary duties to the
Union in violation of Section 501(a) of the LMRDA, 29 U.S.C. 501(a),
while the second through fifth claims essentially restated the first
claim under various state common law theories.  The sixth claim asked
the court to impose a constructive trust on petitioner's pension
benefits in favor of the Union, and to enjoin the plans from paying
any further benefits to petitioner until the Union was made whole for
its losses.  Petitioner and the Union stipulated to the entry of a
$275,000 judgment on the Union's first five claims, while agreeing to
litigate the availability of the constructive trust remedy.  The plans
that had denied benefits continued to argue that petitioner had
totally forfeited his right to those benefits, but asserted in the
alternative that, if pension benefits were owed, the Union should
receive them.  Pet. App. A3, B2;  App., infra, 3a-9a.

   2. The district court held that petitioner had not forfeited his
pension benefits.  It relied on several cases interpreting ERISA's
anti-forfeiture provision, Section 203(a), 29 U.S.C. 1053(a) (1982 &
Supp. V 1987), /1/ to preclude forfeiture of pension benefits because
of employee misconduct, even where that misconduct amounted to
criminal fraud against the employer.  /2/ However, the court imposed a
constructive trust on petitioner's pension benefits, making them
payable to the Union.  Pet. App. B5.  It held that ERISA does not bar
the imposition of such a constructive trust, despite what the court
described (id. at B3) as the "unconditional" language of the statute's
anti-alienation provision for pension benefits.  Section 206(d)(1), 29
U.S.C. 1056(d)(1).  /3/ The court observed that Congress had recently
enacted an exception to the anti-alienation provision for "qualified
domestic relations order(s)" after courts had found an implied
exception for that purpose in cases such as AT&T v. Merry, 592 F.2d
118 (2d Cir. 1979).  Pet. App. B3-B4.

   The district court also noted that two circuits had reached
contrary conclusions on the question whether to imply an exception to
the anti-alienation provision in cases involving criminal misconduct
or fraud.  Pet. App. B4, citing Ellis National Bank v. Irving Trust
Co., 786 F.2d 466 (2d Cir. 1986) (no exception), and St. Paul Fire &
Marine Ins. Co. v. Cox, 752 F.2d 550 (11th Cir. 1985) (exception
implied).  However, the court did not consider this case to be
entirely comparable to either Ellis National Bank or St. Paul Fire &
Marine because, unlike those cases, here the "question is not whether
particular state law is preempted by ERISA," but instead is "how to
interpret the non-alienability provision's effect on other federal
statutes." Pet. App. B4.  In particular, the court believed that ERISA
should be read "in pari materia" with the Labor-Management Relations
Act of 1947 (LMRA) tit. II, 29 U.S.C. 171 et seq. and the LMRDA, whose
purposes are to protect workers against "corrupt practices on the part
of union officers." Pet. App. B4.  Considering the protectie purposes
of all three statutes, the court concluded that "(i)n circumstances
where the viability of a union and the members' pension plans was
damaged by the knavery of a union official, a narrow exception to
ERISA's anti-alienation provision is appropriate." Id. at B5.
Therefore, the court granted the constructive trust remedy sought by
the Union.  Ibid.  /4/

   3.  The court of appeals affirmed, concluding that the district
court properly used its "inherent equitable authority" to impose a
constructive trust "to redress breaches of ERISA" and to recover
"money embezzled by (petitioner) from the pension fund." Pet. App. A2,
A4, A5.  In the court's view, ERISA's anti-alienation provision is
subject to an implied exception for fraud, an exception the court
defined as a "narrow" one "applicable only to a trustee-beneficiary
(of a pension fund) who has directly or indirectly damaged the fund
through his fraudulent actions." Id. at A12 n.3.  The court relied
largely on the decisions of the District of Columbia and Eleventh
Circuits in Crawford v. La Boucherie Bernard, Ltd., 815 F.2d 117 (D.C.
Cir.), cert. denied, 108 S. Ct. 328 (1987), and St. Paul Fire &
Marine, which it described as authorizing a court to "garnish a
beneficial interest in a plan to satisfy a judgment based on a breach
of ERISA." Pet. App. A4.  It declined to follow the holdings of the
Sixth and Second Circuits in United Metal Products Corp. v. National
Bank, 811 F.2d 297 (6th Cir. 1987), cert. dismissed, No. 86-1786 (Apr.
22, 1988), and Ellis National Bank, where the courts refused to imply
a criminal misconduct exception to ERISA's anti-alienation provision.

   Emphasizing both the importance of fiduciary responsibility and the
broad scope of the remedies provided in ERISA's enforcement
provisions, the court of appeals found "no indication in (ERISA) that
the unscrupulous fiduciary is to be protected from the natural legal
consequences of his or her misdeeds." Pet. App. A5.  According to the
court, "(w)hen (petitioner) left office after embezzling at least
$370,000, the Union had only $150,000 in cash assets remaining, and
the financial security of workers who relied upon the Union's pension
plan was severely undermined." Ibid.  Under these circumstances, the
court concluded that imposing a constructive trust on petitioner's
pension benefits "both accorded with (established) principles of trust
law and was well within its discretionary power as defined by the
common law and ERISA." Id. at A7.  /5/

   Finally, the court of appeals rejected petitioner's effort to
exempt 75 percent of his pension benefits from garnishment under the
Consumer Credit Protection Act (CCPA), 15 U.S.C. 1671 et seq.  The
court recognized that the CCPA's definitions of "earnings" and
"garnishment" (15 U.S.C. 1672(a) and (c), respectively) encompass
periodic pension payments subjected to a constructive trust.  /6/
However, it declined to reach the issue on the ground that petitioner
had not filed a timely objection to the writ of garnishment as
required by governing state law.  Pet. App. A10-A11.  The court cited
Mackey v. Lanier Collection Agency & Service, Inc., 108 S. Ct. 2182
(1988), for the proposition that state garnishment laws are not
preempted by ERISA, but did not address the question whether such laws
might nevertheless be preempted by the CCPA.  Pet. App. A13 n.7.

                              DISCUSSION

   There is a clear and acknowledged conflict in the circuits as to
the first question presented:  whether a constructive trust may be
imposed on the pension benefits of an employee who has stolen from his
employer.  In our view, the Sixth Circuit in United Metal Products and
the Second Circuit in Ellis National Bank reached the correct result
by concluding that an employee's pension benefits may not be paid to
his employer even in cases involving criminal misconduct, whereas the
Eleventh Circuit erred by reaching the opposite conclusion in St. Paul
Fire & Marine.  On its facts, the decision below places the Tenth
Circuit in agreement with the Eleventh Circuit and in opposition to
the Second and Sixth Circuits because petitioner embezzled from his
employer and not, as the court below appeared to think, from the
pension plans.  Although we believed two years ago that the lower
courts could resolve this issue correctly without review by this
Court, /7/ we now believe that review by this Court is warranted, and
we think this case is suitable for resolution of the conflict.

   1. The two circuits holding that ERISA's anti-alienation provision
bars the imposition of a constructive trust on an employee's pension
benefits reasoned that, "(d)espite its equitable appeal, (a) 'criminal
misconduct' exception * * * undermines a fundamental purpose of ERISA
* * * that 'if a worker has been promised a defined pension benefit
upon retirement * * * he actually receives it.'" Ellis National Bank,
786 F.2d at 471, quoting Alessi v. Raybestos-Manhattan, Inc., 451 U.S.
504, 510 (1981);  accord, United Metal Products, 811 F.2d at 300.
Moreover, "whether an exception should be created is a question for
legislative rather than judicial judgment." Ibid.; accord, Ellis
National Bank, 786 F.2d at 472.  In refusing to imply a criminal
misconduct exception, both courts expressly rejected (811 F.2d at 299;
 786 F.2d at 471) the earlier contrary holding of the Eleventh Circuit
in St. Paul Fire & Marine, which permitted garnishment on the theory
that accomplishing the purposes of ERISA does not require "abrogation
of the equitable principle that a wrongdoer should not benefit from
his misdeeds." 752 F.2d at 552.

   In our view, United Metal Products and Ellis National Bank were
correctly decided.  To ensure that employees actually receive the
pension benefits they were promised, ERISA includes detailed
provisions for vesting and nonforfeitability of pension rights,
"concepts * * * critical to the ERISA scheme." Alessi, 451 U.S. at
510.  For example, Section 203(a), the anti-forfeiture provision,
directs each pension plan to "provide() that an employee's right to
his normal retirement benefit is nonforfeitable upon the attainment of
normal retirement age" and requires pre-retirement vesting of accrued
benefits according to a prescribed schedule.  Except as specifically
provided by the statute itself, "an employee's rights, once vested,
are not to be forfeitable for any reason." H.R. Conf. Rep. No. 1280,
93d Cong., 2d Sess. 271 (1974), reprinted in 3 Senate Comm. on Labor
and Public Welfare, 94th Cong., 2d Sess., Legislative History of the
Employee Retirement Income Security Act of 1974, at 4538 (Comm. Print
1976) (hereinafter Leg. Hist.).

   This general prohibition against forfeiture of vested pension
benefits was aimed directly at outlawing so-called "bad boy" clauses
that denied benefits "because the employee later went to work for a
competitor, or in some other way was considered 'disloyal' to the
employer." H.R. Rep. No. 93-807, 93d Cong., 2d Sess. 60 (1974),
reprinted in 2 Leg. Hist. 3180;  see also 120 Cong. Rec. 29,197 (1974)
(remarks of Rep. Dent), reprinted in 3 Leg. Hist. 4669.  The drafters
therefore intended to prevent the cancellation of retirement benefits
as a tool for punishing employees for real or imagined offenses
against their employers, including outright theft or fraud.  See
Fremont v. McGraw-Edison Co., 606 F.2d 752 (7th Cir. 1979), cert.
denied, 445 U.S. 951 (1980);  Winer v. Edison Bros. Stores Pension
Plan, 593 F.2d 307 (8th Cir. 1979);  and Vink v. SHV N. A. Holding
Corp., 549 F. Supp. 268 (S.D.N.Y 1982).  Relying on this authority,
the district court below properly rejected the plans' argument that
petitioner had forfeited his pension benefits by his criminal
misconduct.  Pet. App. B3.

   Like the anti-forfeiture provision, ERISA's anti-alienation
provision, Section 206(d)(1), which requires all tax-qualified pension
plans to provide that benefits under the plan "may not be assigned or
alienated," was included to reinforce the policy of "ensur(ing) that
the employee's accured benefits are actually available for retirement
purposes." H.R. Rep. No. 807, supra, at 68, reprinted in 2 Leg. Hist.
3188.  The legislative history confirms the unsurprising conclusion
that garnishments are to be viewed as involuntary assignments, and
thus do not come within a limited statutory exception to the
anti-alienation provision for certain voluntary assignments.  /8/

   ERISA further safeguards pension benefits by directing that "the
assets of a plan shall never inure to the benefit of any employer" (29
U.S.C. 1103(c)(1)) and "shall be held for the exclusive purposes of
providing benefits to participants in the plan and their beneficiaries
and defraying reasonable expenses of administering the plan" (29
U.S.C. 1104(a)(1)(A)).  To achieve those ends, the statute imposes
strict fiduciary duties on plan trustees and prohibits entire
categories of financial transactions between plans and parties in
interest, defined to include both employers and unions.  29 U.S.C.
1002(14)(C) and (D), 1106.  As this Court has emphasized, the purpose
of these ERISA provisions is "specifically (to) insulate the trust
from the employer's interest." NLRB v. Amax Coal Co., 453 U.S. 322,
333 (1981).  Similarly, the purpose of the trust requirement for
union-sponsored welfare and pension plans, which is contained in
Section 302(c)(5) of the LMRA, 29 U.S.C. 186(c)(5), is to insulate
such plans from excessive control by unions.  Amax Coal, 453 U.S. at
328-329.  Under all of those statutory provisions, plan assets may be
used only for plan purposes, not to further the interests of such
related parties as employers and unions.

   Consistent with the statutory language and the legislative history,
a regulation promulgated by the Treasury Department in 1978 interprets
the anti-alienation provision in a manner that clearly prohibits the
constructive trust imposed in this case.  /9/ That regulation states
that "benefits provided under (a qualified) plan may not be
anticipated, assigned (either at law or in equity), alienated or
subject to attachment, garnishment, levy, execution or other legal or
equitable process." 26 C.F.R. 1.401(a)-13(b)(1).  It further defines a
prohibited "assignment" or "alienation" to include "(a)ny arrangement
providing for the payment to the employer of plan benefits which
otherwise would be due the participant under the plan." 26 C.F.R.
1.401(a)-13(c)(1)(i) (emphasis added).  The constructive trust
utilized here is precisely the type of "other * * * equitable process
* * * providing for the payment to the employer of plan benefits" that
is barred by the Treasury regulation.

   Since it enacted ERISA in 1974, Congress has added only one
exception to ERISA's anti-alienation provision, the limited exception
for "qualified domestic relations orders" contained in the Retirement
Equity Act of 1984, Pub. L. No. 98-397, Sections 104(a), 104(b),
204(a), 98 Stat. 1433, 1436, 1445 (codified at 29 U.S.C. 1056(d)(3),
1144(b)(7) (1982 & Supp. V 1987), 26 U.S.C. 401(a)(13)(B) (1982 &
Supp. V 1987)).  That amendment was in response to a series of cases
in which the courts had recognized an implied exception to the
anti-alienation provision to permit garnishment of pension benefits to
satisfy spousal and child support and community property obligations
contained in the orders of state domestic relations courts.  S. Rep.
No. 575, 98th Cong., 2d Sess. 18-19 (1984).  In "carving out an
appropriate and well-defined exception for domestic relations orders
meeting specific standards" (130 Cong. Rec. 23,481 (1984) (remarks of
Rep. Erlenborn)), Congress reaffirmed its intent to make no other
changes in the anti-alienation or reemption provisions of ERISA.
Ibid.; see also H.R. Rep. No. 655, 98th Cong., 2d Sess. Pt. 1, at 39,
42 (1984).

   Moreover, the overwhelming majority of courts have held that ERISA
precludes garnishment by general creditors of pension plan
participants, a proposition whose validity was assumed by this Court
in Mackey, 108 S. Ct. at 2188-2189.  /10/ Those courts reasoned that
the anti-alienation provision is designed to insulate pension plan
benefits from garnishment so that plan participants and their
dependents will actually receive their pension benefits.  In our view,
and that of the Second and Sixth Circuits, nothing in the language or
legislative history of ERISA places an employer harmed by an
employee's embezzlement in any better position than that of any other
third-party creditor attempting to collect a debt by garnishing a plan
account.  /11/ In both instances, the message of ERISA's
anti-alienation provision is that creditors cannot invade a debtor's
promised pension benefits.

   2. Respondents contend that review of the first question presented
is not warranted for three reasons.  First, they argue (Br. in Opp.
6-9) that this case does not present an opportunity to resolve the
conflict in the circuits because it is more like Crawford v. La
Boucherie Bernard, Ltd., 815 F.2d 117 (D.C. Cir. 1987), cert. denied,
108 S. Ct. 735 (1988), where a fiduciary of an employee benefit plan
embezzled from the plan itself, that it is to the cases where an
employee embezzled from his employer.  Second, they contend (Br. in
Opp. 9) that this case is unique, and hence unsuitable for review,
because it involves a violation of Section 501 of the LMRDA.  Third,
they suggest (Br. in Opp. 9-10) that, because petitioner failed to
object to the Union's garnishment action as required by state law, he
should be precluded from raising the argument that ERISA's
anti-alienation provision bars the imposition of a constructive trust
on his pension benefits.  All three contentions should be rejected.

   a. The court of appeals misunderstood the relevant facts.  It
repeatedly mischaracterized petitioner's misconduct as embezzling
"from the pension fund" (see, e.g., Pet. App. A2) and described the
use of a constructive trust as "redress(ing) breaches of ERISA" (id.
at A5;  see also id. at A6, A7, A9, A11 n.3, A13 n.7).  In fact,
petitioner was neither prosecuted for embezzlement from an
ERISA-covered pension plan (see 18 U.S.C. 664) nor subjected to a
civil suit under ERISA in his capacity as a plan trustee for any
breaches of his ERISA fiduciary duties (see 29 U.S.C. (1982 & Supp. V
1987) 1104, 1106, 1132).  Indeed, none of the plans involved in this
litigation suffered any actual losses as a result of petitioner's
actions.  /12/ Instead, petitioner was prosecuted for -- and pleaded
guilty to -- a criminal violation of the LMRDA for embezzlement from
the Union (29 U.S.C. 501(c);  Pet. App. B2;  App., infra, 1-2).  More
important, the Union obtained the civil judgment debt that it seeks to
enforce through the constructive trust in an LMRDA action against
petitioner for breaching his fiduciary duties as a union officer.
Pet. App. B2.  Hence, the constructive trust was imposed to remedy a
breach of the LMRDA rather than ERISA, as erroneously assumed by the
Tenth Circuit, since petitioner embezzled from the Union, not the
plans.

   The court of appeals also misconceived relevant law.  The court
characterized United Metal Products, Ellis National Bank, and St. Paul
Fire & Marine as involving instances where a trustee of a pension
plan, who was also a plan participant, damaged the pension plan
through his fradulent actions.  See Pet. App. A12 n.3.  As a result,
the court analyzed this case primarily by reference to the broad and
flexible trust law remedies incorporated by ERISA to redress fiduciary
misconduct against employee benefit plans.  In fact, however, none of
those three cases involved ERISA fiduciary misconduct against pension
plans.  Instead, like this case, each of those cases involved an
employee who stole from his or her employer.  /13/ Accordingly, the
result here is in accord with the decision in St. Paul Fire & Marine,
and in conflict with the results in United Metal Products and Ellis
National Bank.

   Contrary to respondents' view (Br. in Opp. 7-9), this case is not
comparable to Crawford.  In that case, the trustees of a pension plan
were found to have breached their ERISA-mandated fiduciary duties by
misusing plan assets in various ways, costing the plan nearly #$1
million.  The District of Columbia Circuit held that ERISA "authorizes
a court to offset a party's interest in a plan covered by that statute
against a judgment based on the party's breaches of duty to the same
plan." 815 F.2d at 118.  /14/ In affording this remedy to the plan
itself, Crawford by no means carved out a general criminal misconduct
exception to ERISA's anti-alienation provision for the benefit of
employers, unions, or other third-party creditors.  Crawford thus
provides no authority for the result in this case.

   Nor is there any evidence that Congress intended to permit any
general criminal misconduct exception to ERISA's anti-alienation
provision for pension benefits.  /15/ Instead, barring the diversion
of pension benefits to accomplish other societal goals is fully
consistent with the language of the statute and congressional intent.
ERISA was enacted primarily for "the protection of individual pension
rights." H.R. Rep. No. 533, 93d Cong., 1st Sess. 1 (1973), reprinted
in 2 Leg. Hist. 2348.  Indeed, Congress's considered judgment was that
the economic security of retirees -- and their dependents -- was
paramount, even against other worth objectives.  The whole point of a
provision barring involuntary alienation is to prevent third parties
with legitimate claims against a person from collecting out of the
pension assets protected by the provision.  Consequently, contrary to
the court's belief (Pet. App. A5), Congress did intend in the
anti-alienation provision "to protect() individuals such as
(petitioner) from the consequences of their misconduct." /16/ See
Crausman v. Curtis-Wright Corp., 676 F. Supp. 1302, 1304 (D.N.J. 1988)
("Congress did not intend to include or permit an employee misconduct
exception").

   In sum, this case is similar in all its material facts to United
Metal Products, Ellis National Bank, and St. Paul Fire & Marine, where
employers sought to garnish a former employee's pension plan benefits
to recover a loss resulting from the employee's embezzlement or fraud
against the employer.  For purposes of the anti-alienation provision,
it is immaterial that a union, rather than a corporation, happened to
be petitioner's employer as well as a sponsor of and contributor to
the pension plans.  ERISA's strict fiduciary duties ensure that a
plan's assets cannot be diverted to either a sponsoring employer or
union.  Since ERISA's anti-alienation provision is designed to
preserve pension benefits solely for the use of retirees and their
dependents, divsersion of those benefits to any other entity is
equally contrary to the statutory purpose.

   Accordingly, this case presents an opportunity to resolve the
conflict in the circuits.  Moreover, we have come to the view that
authoritative guidance is needed in this area.  Two years ago, we
believed that additional circuits would embrace Ellis National Bank
and United Metal Products and would reject the St. Paul Fire & Marine
decision, which we consider clearly wrong.  See Brief for the United
States as Amicus Curiae at 12-13 in United Metal Products v. National
Bank of Detroit, supra.  But the Tenth Circuit in this case not only
preferred the result in St. Paul Fire & Marine over the result in
Ellis National Bank and United Metal Products, but also so
mischaracterized those cases as to spawn further confusion in the
area.  /17/ We now believe that this confusion can be eliminated only
by review by this Court.

   b. Respondents also contend (Br. in Opp. 9) that this case is
unsuitable for review because the judgment debt arose under the LMRDA.
 As respondents correctly observe, this case differs from the three
earlier employer garnishment cases in that the judgment debt arose
under a federal, not a state, law.  Since ERISA preserves all other
laws of the United States (29 U.S.C. 1144(d);  /18/ see Shaw v. Delta
Air Lines, Inc., 463 U.S. 85, 100-101 (1983)), it is necessary to
consider whether anything in the LMRDA should be construed as
authorizing the attachment of an unfaithful union officer's pension
benefits, despite the strong policy concerns behind ERISA's
anti-alienation provision.  This question is not without difficulty.
Nonetheless, in our view the fact that this case arises under the
LMRDA should not affect the result here.

   The LMRDA was designed to protect union members and other employees
by establishing "high standards of responsibility and ethical conduct"
for union officials.  29 U.S.C. 401(b) (Supp. V 1987).  Accordingly,
Section 501(a) of that Act declares that officers of a labor
organization "occupy positions of trust in relation to such
organization and its members as a group" and therefore have a duty "to
hold its money and property solely for the benefit of the organization
and its members." 29 U.S.C. 501(a).  These fiduciary duties are
enforceable through a private right of action by the union or any of
its members "to recover damages or secure an accounting or other
appropriate relief for the benefit of the labor organization." 29
U.S.C. 501(b).  A separate criminal provision forbids embezzlement
from a union.  29 U.S.C. 501(c).

   Although the Tenth Circuit did not specifically refer to Section
501(b) of the LMRDA as a basis for its imposition of a constructive
trust, that Section's authorization of "other appropriate relief" is a
possible statutory source -- indeed the only possible source -- for
such a remedy in this case.  The courts have read Section 501(b) to
authorize "a wide array of remedies for fiduciary breaches," including
damages, accounting, injunctions, surcharge, and restitution.
Morrissey v. Curran, 650 F.2d 1267, 1281 (2d Cir. 1981).  /19/ In
particular, two courts of appeals have enjoined unions from paying the
salaries of culpable union officers until those officers satisfied
their judgment debts to the unions for violating the LMRDA.  Local 92,
Int'l Ass'n of Bridge Workers v. Norris, 383 F.2d 735 (5th Cir. 1967);
 Highway Truck Drivers & Helpers v. Cohen, 334 F.2d 378 (3d Cir.),
cert. denied, 379 U.S. 921 (1964).  The latter court explained its
action as "'merely an injunction in aid of a judgment creditor to set
off claims owed it by the judgment debtor.'" Id. at 381 (citation
omitted).

   Nonetheless, neither the statutory language, the legislative
history, nor any case under Section 501 of the LMRDA of which we are
aware specifically authorizes imposition of a constructive trust on
the pension benefits of a union officer to recover the officer's
judgment debt to a union.  /20/ Such a remedy is not simply an offset
between a judgment creditor and a judgment debtor, as in the two LMRDA
cases cited above (Local 92 and Highway Truck Drivers).  Instead, the
constructive trust more closely resembles a third-party garnishment,
where the pension plan, an outsider to the LMRDA dispute, is asked to
divert payments from its intended beneficiary to the union.

   While such a result would undoubtedly further the general
protective purposes of the LMRDA, it would just as clearly undermine
the more specific protective purpose of ERISA's anti-alienation
provision.  Thus it is especially significant that the drafters of the
LMRDA carefully specified their intent to preserve union members'
rights under other federal laws from defeasance by the LMRDA.  Section
603(a) of the LMRDA, 29 U.S.C. 523(a), states that "(e)xcept as
explicitly provided to the contrary, nothing in this chapter shall * *
* take away any right * * * to which members of a labor organization
are entitled under * * * other Federal law." Here petitioner was a
union member with a right to pension benefits protected by ERISA, /21/
another federal law;  and, as stated, nothingin the LMRDA "explicitly
provide(s)" that his pension benefits are subject to attachment by the
Union.  Moreover, petitioner's substantive right is firmly grounded in
specific statutory language under ERISA -- its anti-alienation
provision -- while the Union's claim to a constructive trust is
grounded at best on general equitable principles implied from the
LMRDA's catch-all authorization of "other appropriate relief" in
Section 501(b).  In contrast to the precise focus of the LMRDA savings
clause on individual rights, the ERISA savings clause for other
federal laws is general in nature.  Reading all four of these
provisions together in accordance with sound principles of statutory
construction, the specific should control the general, so that
petitioner's right to receive his pension benefits is preserved.  See
Radzanower v. Touche Ross & Co., 426 U.S. 148, 153 (1976);  Morton v.
Mancari, 417 U.S. 535, 550-551 (1974).

   Further tipping the scales in favor of ERISA is that statute's
history.  The Congress that enacted ERISA was well aware of the
existence (and limitations) of the LMRDA and other federal labor
statutes then regulating various aspects of pension and welfare plans.
 See S. Rep. No. 127, 93d Cong., 1st Sess. 3 (1973), reprinted in 1
Leg. Hist. 589.  Had it wished, Congress could have created exceptions
to ERISA's anti-alienation and anti-forfeiture provisions to permit
garnishment of pension benefits to satisfy LMRDA judgment debts.
However, Congress did not do so, and nothing in ERISA (or its
legislative history) suggests that it would approve the judicial gloss
added to the anti-alienation provision by the court of appeals.  To
the contrary, Congress especially intended to insulate pension
benefits from interference by all employers.  Amax Coal, 453 U.S. at
333.  On balance, then, we believe the better view of the two federal
statutes is that ERISA's anti-alienation provision precludes the use
of pension benefits to satisfy an LRMDA judgment debt.  Thus the fact
that this case involves embezzlement by a union official does not
militate against review.

   c. Nor is review of the first question inappropriate because
petitioner failed to object to the garnishment of his pension account
in accordance with state law.  The court below held (Pet. App.
A10-A11) that petitioner's failure to follow state law precluded
presentation of his claim for a 75 percent exemption from garnishment
under the Consumer Credit Protection Act, 15 U.S.C. 1671 et seq.
Respondent urges (Br. in Opp. 9-10) that in view of this holding,
petitioner's failure to follow state law should also bar presentation
of his claim for a "100% exemption under ERISA's anti-alienation
provision."

   This contention is frivolous.  Whatever the correctness of the
holding of the court below with respect to the CCPA (see point 3,
infra), no court has ever held that state law need be followed in
claiming a right to plan benefits under the anti-alienation provision
of ERISA.  Nor could such a holding be reconciled with the clear
language and purpose of that provision.

   3. The second question presented by the petition is whether the
court below was correct in holding that failure to conform to state
law barred presentation of the claim for 75 percent exemption under
the CCPA.  Although we believe the court below reached an erroneous
conclusion on this issue, we do not believe the question is one that
warrants review in the circumstances of this case.

   a. The restrictions on garnishmentin the CCPA were adopted to
protect individual debtors from predatory extensions of credit, loss
of employment, and personal bankruptcy.  15 U.S.C. 1671(a).  The
statute generally limits garnishment to 25 percent of the debtor's
weekly disposable earning.  15 U.S.C. 1673(a).  "Earnings" are defined
to include "periodic payments pursuant to a pension or retirement
program" (15 U.S.C. 1672(a)) and "garnishment" is defined broadly as
"any legal or equitable procedure through which the earnings of any
individual are required to be withheld for payment of any debt." 15
U.S.C. 1672(c).  The restrictions on garnishment are phrased as
limitations on the power of the court:  "No court of the United States
or any State * * * may make, execute, or enforce any order or process
in violation of this section." 15 U.S.C. 1673(c).  The Secretary of
Labor is empowered to enforce the CCPA garnishment provisions (15
U.S.C. 1676), and the federal statute preempts state laws that provide
less protection to debtors.  15 U.S.C. 1677;  see generally H.R. Rep.
No. 1040, 90th Cong., 1st Sess. (1967);  First National Bank v.
Columbia Credit Corp., 179 Colo. 242, 499 P.2d 1163 (1972).

   The Secretary of Labor has interpreted the statutory provisions in
15 U.S.C. 1673(a) and (c) as "not requiring the raising of the
subsection (a) restrictions (the percentage exemptions) as affirmative
defenses in garnishment proceedings." 29 C.F.R. 870.51(c).  This
construction of the statute has been given deference by most courts,
which have held that the percentage limitations in Section 1673(a) are
"self-executing," and thus need not be timely and personally demanded
by the debtor under state law or pain of waiver.  Donovan v. Hamilton
County Municipal Court, 580 F. Supp. 554, 557 (S.D. Ohio 1984);  see
also Hodgson v. Cleveland Municipal Court, 326 F. Supp. 419, 431 (N.D.
Ohio 1971);  First National Bank v. Columbia Credit Corp., 179 Colo.
at 251-252, 499 P.2d at 1168 (deferring to Secretary of Labor's
regulations on garnishment);  but see Lutes v. Lutes, 722 S.W.2d 314,
318-319 (Mo. Ct. App. 1986) (CCPA exemptions not self-executing but
can be waived).  The decision below, holding petitioner bound by the
procedural requirements of Colorado garnishment law (Pet. App.
A10-A11), thus directly contravenes Section 1673(c) of the CCPA, as
interpreted by the Secretary of Labor and prior federal court
decisions.  Apparently the courts and the parties below simply
overlooked these authoritative interpretations of the preemptive
effect and operation of the CCPA's garnishment exemptions, and thus
the court erroneously dismissed petitioner's CCPA claims.

   b. Because the relevant provisions of the CCPA were not called to
the attention of the court below, we do not think the second question
presented, on which there is no conflict in the circuits (no other
court of appeals having addressed it), warrants review by this Court.
And, in any event, the second question would not be reached if the
Court holds that ERISA's anti-alienation provision bars the imposition
of a constructive trust on pension benefits.

                              CONCLUSION

   The petition for a writ of certiorari should be granted, limited to
the first question presented.

   Respectfully submitted.

   KENNETH W. STARR

      Solicitor General

   DAVID L. SHAPIRO

      Deputy Solicitor General

   CHRISTOPHER J. WRIGHT

      Assistant to the Solicitor General

   JERRY G. THORN

      Acting Solicitor of Labor

   ALLEN H. FELDMAN

      Associate Solicitor

   MARY-HELEN MAUTNER

      Counsel for Appellate Litigation

   ELLEN L. BEARD

      Attorney Department of Labor

   JUNE 1989

   /1/ Section 203(a) states that "(e)ach pension plan shall provide
that an employee's right to his normal retirement benefit is
nonforfeitable upon the attainment of normal retirement age." It
further provides that an employee's own contributions to a plan are at
all times nonforfeitable and that employer's contributions must become
nonforfeitable according to a vesting schedule set out in the statute.
 See also 26 U.S.C. 411(a) (1982 & Supp. V 1987).

   /2/ Pet. App. B3, citing Fremont v. McGraw-Edison Co., 606 F.2d 752
(7th Cir. 1979), cert. denied, 445 U.S. 951 (1980);  Winer v. Edison
Bros. Stores Pension Plan, 593 F.2d 307 (8th Cir. 1979);  Vink v. SHV
N. A. Holding Corp., 549 F. Supp. 268 (S.D.N.Y. 1982).

   /3/ Section 206(d)(1) states that "(e)ach pension plan shall
provide that benefits provided under the plan may not be assigned or
alienated." See also 26 U.S.C. 401(a)(13)(A) (1982 & Supp. V 1987).

   /4/ Although no mention of the issue was made in the district
court's opinion, the hearing transcript shows that the court believed
that, by imposing a constructive trust rather than a "garnishment," it
could avoid any exemption issues that might arise under the Consumer
Credit Protection Act.  Pet. App. C22.

   /5/ The court also rejected petitioner's argument that a
constructive trust could be imposed only on embezzled funds that could
be traced back into the pension plan.  Pet. App. A7-A9.  That issue
was not presented in the petition for a writ of certiorari.

   /6/ Section 1672(a) defines "earnings" to include "periodic
payments pursuant to a pension or retirement program." Section 1672(c)
defines "garnishment" as "any legal or equitable procedure through
which the earnings of any individual are required to be withheld for
payment of any debt."

   /7/ See Brief for the United States as Amicus Curiae in United
Metal Products Corp. v. National Bank of Detroit, No. 86-1786 (filed
Sept. 18, 1987).  We are serving a copy of that brief on counsel for
the parties here.

   /8/ The anti-alienation provision exempts from its prohibition
voluntary and revocable assignments that do not exceed ten percent of
any benefit payment, as well as loans from a plan to its participants
and beneficiaries that are secured by the participant's nonforfeitable
benefits.  26 U.S.C. 401(a)(13)(A) (1982 & Supp. V 1987);  29 U.S.C.
1056(d)(2).  The Conference Report notes that "(f)or purposes of this
rule, a garnishment or levy is not to be considered a voluntary
assignment." H.R. Rep. No. 1280, supra, at 280, reprinted in 3 Leg.
Hist. 4547.

   /9/ All rulemaking and interpretive authority with respect to
ERISA's minimum funding, participation, and vesting standards for
employee benefit plans is consolidated in the Secretary of the
Treasury (in practice, the Internal Revenue Service (IRS)).  Reorg.
Plan No. 4 of 1978, Section 101(a), 3 C.F.R. 332 (1979).  The
Secretary of Labor, however, retains authority under Section 502 of
ERISA, 29 U.S.C. 1132 (1982 & Supp. V 1987), to bring civil actions to
enforce fiduciary obligations under such plans consistent with the
IRS's interpretation of those standards.  Reorg. Plan No. 4 of 1978,
Section 104, 3 C.F.R. 333 (1979).  Thus, both agencies have
responsibility for enforcement of the anti-alienation provision.

   /10/ See, e.g., Tenneco Inc. v. First Virginia Bank, 698 F.2d 688,
689-690 (4th Cir. 1983);  General Motors Corp. v. Buha, 623 F.2d 455,
460-463 (6th Cir. 1980);  Commercial Mortgage Ins., Inc. v. Citizens
Nat. Bank, 526 F. Supp. 510, 516-520 (N.D. Tex. 1981);  Christ
Hospital v. Greenwald, 82 Ill. App. 3d 1024, 1027-1028, 403 N.E.2d
700, 703 (1980);  Helmsley-Spear, Inc. v. Winter, 74 A.D.2d 195, 199,
426 N.Y.S.2d 778, 781 (1980), aff'd, 52 N.Y.2d 984, 419 N.E.2d 1078,
438 N.Y.S.2d 79 (1981).

   /11/ Neither employers nor other creditors, of course, can claim
the same equitable interest in pension benefits as can a participant's
spouse and children, who are part of the class of persons ERISA was
designed to protect.  See, e.g., Ellis National Bank, 786 F.2d at
470-471, and cases discussed therein.

   /12/ Part of the $377,000 petitioner admitted to embezzling from
the Union originated from the employee benefit plans, as payments from
the plans to the Union for administrative services the Union had
provided.  But when petitioner converted this money to his personal
use, it had already been paid to the Union and belonged to the Union.
The parties agreed that the plans suffered no losses as a result of
petitioner's embezzlement.  Pet. App. C10, C13.

   /13/ In United Metal Products, the company sought to garnish the
pension account of a bookkeeper who had embezzled nearly half a
million dollars from it and was believed to be residing in Brazil.
811 F.2d at 298 & n.1.  In Ellis National Bank, Prudential-Bache
sought to garnish the pension account of a former officer who had
pleaded guilty to grand theft and securities fraud in connection with
unauthorized transactions in customers' accounts.  786 F.2d at 467.
In St. Paul Fire & Marine, a bank's insurer sought to garnish the
pension account of the bank's former president, who had been convicted
of misapplying bank funds.  752 F.2d at 551.

   /14/ The correctness of the holding in Crawford need not be decided
here since this case does not involve an ERISA breach or remedy.
However, the Secretary of Labor, a party in Crawford, supported the
offset remedy there on the ground that ERISA authorizes broad remedies
to counter breaches of fiduciary duty by trustees of employee benefit
plans.  See 29 U.S.C. 1109, 1132(a)(2).

   /15/ The confidence of the court below (see Pet. App. A5, A12 n.3)
that a "narrow," "easily defined" exception to the anti-alienation
provision can be carved out for fraudulent actions that "directly or
indirectly" damage a pension plan is misplaced.  Such an exception
could encompass virtually any crime against an employer or union plan
sponsor that might have ripple effects on the plan, e.g., by reducing
the level of future contributions by the sponsor.  As several courts
have observed, delineating the scope of such an exception would likely
require a "boundless stream of suits and disputes." Vink, 549 F. Supp.
at 273;  see also United Metal Products, 811 F.2d at 300;  Ellis
National Bank, 786 F.2d at 471.

   /16/ Congress also intended to protect employees' dependents, who
ordinarily bear no responsibility for the employee's misconduct.  29
U.S.C. 1001(a);  Vink, 549 F. Supp. at 271.

   /17/ Moreover, additional uncertainty is created by the reference
of the court below to direct "or indirect()" damage to a covered plan
as a basis for an exception to the anti-alienation provision (e.g.,
Pet. App. A12 n.3 (emphasis added)).  See note 15, supra.

   /18/ Section 514(d) of ERISA, 29 U.S.C. 1144(d), provides that
"(n)othing in this subchapter shall be construed to alter, amend,
modify, invalidate, impair, or supersede any law of the United States
(except as provided in sections 1031 and 1137(c) of this title) or any
rule or regulation issued under any such law."

   /19/ Earlier versions of Section 501(b) specifically listed
injunctions and restitution among the available remedies, and there is
no indication that Congress intended to exclude them by substituting
the catch-all "other appropriate relief." See H.R. 4473, 86th Cong.,
1st Sess. Section 201(b) (1959), reprinted in 1 NLRB, Legislative
History of the Labor-Management Reporting and Disclosure Act of 1959,
at 218-219 (1959);  S. 1137, 86th Cong., 1st Sess. Section 403(a)
(1959), reprinted in 1 NLRB, Legislative History of the
Labor-Management Reporting and Disclosure Act of 1959, at 308 (1959).

   /20/ This lack of specific statutory authority distinguishes
collection of LMRDA judgment debts from collection of federal taxes,
which is permitted by the same Treasury regulation that bars most
other attachments or alienations of pension benefits.  26 C.F.R.
1.401(a)-13(b)(2).  As the Internal Revenue Service explained in
promulgating the regulation (43 Fed. Reg. 6942 (1978)), that exception
to the general rule prohibiting garnishment of pension plans is based
both on ERISA's savings clause for other federal laws, 29 U.S.C.
1144(d), and on language in the Internal Revenue Code that overrides
other federal statutes.  Specifically, 26 U.S.C. 6334(c) provides that
"(n)otwithstanding any other law of the United States, no property or
rights to property shall be exempt from levy other than the property
specifically made exempt by subsection (a)." Section 6334(a), in turn,
contains ten exemptions, including an exemption for pension payments
to railroad employees and military personnel (Section 6334(a)(6)), but
contains no general exemption for pension funds.  It is, therefore,
clear that Congress intended pension plan accounts other than those
listed in Section 6334(a)(6) to be subject to federal tax levies.

   /21/ We do not read Section 603(a) of the LMRDA as referring only
to those federal rights to which union members are entitled qua union
members.

   Appendix