Sereboff v. Mid Atlantic Medical Services, Inc.

(Slip Opinion)              OCTOBER TERM, 2005                                       1

                                       Syllabus

         NOTE: Where it is feasible, a syllabus (headnote) will be released, as is
       being done in connection with this case, at the time the opinion is issued.
       The syllabus constitutes no part of the opinion of the Court but has been
       prepared by the Reporter of Decisions for the convenience of the reader.
       See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337.


SUPREME COURT OF THE UNITED STATES

                                       Syllabus

      SEREBOFF ET UX. v. MID ATLANTIC MEDICAL 

                  SERVICES, INC.


CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR
                 THE FOURTH CIRCUIT

      No. 05–260.      Argued March 28, 2006—Decided May 15, 2006
Petitioner Sereboffs are beneficiaries under a health insurance plan
  administered by respondent Mid Atlantic and covered by the Em
  ployee Retirement Income Security Act of 1974 (ERISA). The plan
  provides for payment of covered medical expenses and has an “Acts of
  Third Parties” provision. This provision requires a beneficiary who is
  injured as a result of an act or omission of a third party to reimburse
  Mid Atlantic for benefits it pays on account of those injuries, if the
  beneficiary recovers for those injuries from the third party. The
  Sereboffs were involved in an automobile accident and suffered inju
  ries. The plan paid the couple’s medical expenses. The Sereboffs
  sought compensatory damages for the accident from third parties in
  state court. After the Sereboffs settled their tort suit, Mid Atlantic
  filed suit in District Court under §502(a)(3) of ERISA, seeking to col
  lect from the Sereboffs’ tort recovery the medical expenses it had paid
  on the Sereboffs’ behalf. The Sereboffs agreed to set aside from their
  tort recovery a sum equal to the amount Mid Atlantic claimed, and
  preserve this sum in an investment account pending the outcome of
  the suit. The court found in Mid Atlantic’s favor and ordered the
  Sereboffs to turn over the amount set aside. The Fourth Circuit af
  firmed in relevant part, and observed that the Courts of Appeals are
  divided on the question whether §502(a)(3) authorizes recovery in
  these circumstances. This Court granted review to resolve this dis
  agreement.
Held: Mid Atlantic’s action properly sought “equitable relief” under
 §502(a)(3). Pp. 3–11.
    (a) A fiduciary may bring a civil action under §502(a)(3)(B) “to ob
 tain . . . appropriate equitable relief . . . to enforce . . . the terms of the
2      SEREBOFF v. MID ATLANTIC MEDICAL SERVICES, INC.

                                   Syllabus

    plan.” The only question here is whether the relief requested was
    “equitable.” In Mertens v. Hewitt Associates, 508 U. S. 248, this
    Court construed §502(a)(3)(B) to authorize only “those categories of
    relief that were typically available in equity,” and thus rejected a
    claim that this Court found sought “nothing other than compensatory
    damages.” Id., at 207–208. This Court elaborated on this construc
    tion of §502(a)(3) in Great-West Life & Annuity Ins. Co. v. Knudson,
    534 U. S. 204, which involved a provision in an ERISA plan similar to
    the “Acts of Third Parties” provision in the Sereboffs’ plan. Relying
    on such a provision, Great-West sought equitable restitution of bene
    fits it had paid when Knudson recovered in tort from a third party.
    In considering whether §502(a)(3)(b) authorized such relief, this
    Court asked whether the restitutionary remedy Great-West sought
    would have been equitable in “the days of the divided bench,” id., at
    212. This Court found that it would not have been equitable, because
    the funds Great-West sought were not in Knudson’s possession but
    had been placed in a trust under California law. That impediment is
    not present here. Mid Atlantic sought identifiable funds within the
    Sereboffs’ possession and control—that part of the tort settlement
    due Mid Atlantic under the ERISA plan and set aside in the invest
    ment account. Pp. 3–5.
       (b) This Court’s case law from the days of the divided bench con
    firms that Mid Atlantic’s claim is equitable. In Barnes v. Alexander,
    232 U. S. 117, attorney Barnes promised two other attorneys “one
    third of the contingent fee” he expected in a case, id., at 119. Based
    on “the familiar rul[e] of equity that a contract to convey a specific ob
    ject even before it is acquired will make the contractor a trustee as
    soon as he gets a title to the thing,” id., at 121, the Court found that
    Barnes’ undertaking “create[d] a lien” upon the portion of the recov
    ery due him from the client, ibid., which the other attorneys could
    “follow . . . into [Barnes’] hands” “as soon as [the fund] was identi
    fied,” id., at 123. The “Acts of Third Parties” provision in the Sere
    boffs’ plan, like Barnes’ promise, specifically identified a particular
    fund distinct from the Sereboffs’ general assets, and a particular
    share of that fund to which Mid Atlantic was entitled. Thus, Mid At
    lantic could rely on a “familiar rul[e] of equity” to collect for the medi
    cal bills it had paid by following a portion of the recovery “into the
    [Sereboffs’] hands” “as soon as [the settlement fund] was identified,”
    and imposing on that portion a constructive trust or equitable lien.
    Ibid.
       The Sereboffs object that Mid Atlantic’s suit would not have satis
    fied the strict tracing rules that they say accompanied equitable res
    titution at common law. But Barnes confirms that no such tracing
    requirement applies to equitable liens imposed by agreement or as
                     Cite as: 547 U. S. ____ (2006)                     3

                                Syllabus

  signment, like that in Barnes itself. And Knudson did not endorse
  application of all restitutionary conditions, like the tracing rules the
  Sereboffs identify, to every action for an equitable lien under
  §502(a)(3). Knudson simply held that equitable restitution was un
  available because the funds Great-West sought were not in
  Knudson’s possession.
     The Sereboffs also argue that equitable relief is inappropriate, even
  under Barnes, because at the time they agreed to the plan terms, no
  fund existed in which they could grant Mid Atlantic an equitable in
  terest. But Barnes explicitly disapproved of a rule requiring identifi
  cation at the time a contract is made of the fund to which a lien speci
  fied in the contract attached.
     The Sereboffs also claim that the rule announced in Barnes applies
  only to equitable liens claimed under an attorney’s contingency fee
  arrangement. But Barnes did not attach any particular significance
  to the identify of the parties seeking recovery, and other cases of this
  Court, not involving attorneys’ contingency fees, have applied the
  same “familiar rul[e] of equity” that Barnes did. See, e.g., Walker v.
  Brown, 165 U. S. 654. Pp. 5–10.
     (c) The Sereboffs’ contention that the lower courts erred in allowing
  enforcement of the “Acts of Third Parties” provision, without impos
  ing limitations that would apply to an equitable subrogation action,
  is rejected. Mid Atlantic’s claim is not considered equitable because
  it is a subrogation claim. Rather, it is considered equitable because it
  is indistinguishable from an action to enforce an equitable lien estab
  lished by agreement, of the sort epitomized by Barnes. Pp. 10–11.
407 F. 3d 212, affirmed in relevant part.

  ROBERTS, C. J., delivered the opinion for a unanimous Court.
                        Cite as: 547 U. S. ____ (2006)                              1

                             Opinion of the Court

     NOTICE: This opinion is subject to formal revision before publication in the
     preliminary print of the United States Reports. Readers are requested to
     notify the Reporter of Decisions, Supreme Court of the United States, Wash
     ington, D. C. 20543, of any typographical or other formal errors, in order
     that corrections may be made before the preliminary print goes to press.


SUPREME COURT OF THE UNITED STATES
                                   _________________

                                   No. 05–260
                                   _________________


    JOEL SEREBOFF, ET UX., PETITIONERS v. MID 

       ATLANTIC MEDICAL SERVICES, INC. 

 ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF 

           APPEALS FOR THE FOURTH CIRCUIT

                                 [May 15, 2006] 


  CHIEF JUSTICE ROBERTS delivered the opinion of the
Court.
  In this case we consider again the circumstances in
which a fiduciary under the Employee Retirement Income
Security Act of 1974 (ERISA) may sue a beneficiary for
reimbursement of medical expenses paid by the ERISA
plan, when the beneficiary has recovered for its injuries
from a third party.
                              I
   Marlene Sereboff ’s employer sponsors a health insur
ance plan administered by respondent Mid Atlantic Medi
cal Services, Inc., and covered by ERISA, 88 Stat. 829, as
amended, 29 U. S. C. §1001 et seq. (2000 ed. and Supp.
III). Marlene Sereboff and her husband Joel are benefici
aries under the plan. The plan provides for payment of
certain covered medical expenses and contains an “Acts
of Third Parties” provision. This provision “applies when
[a beneficiary is] sick or injured as a result of the act or
omission of another person or party,” and requires a bene
ficiary who “receives benefits” under the plan for such
injuries to “reimburse [Mid Atlantic]” for those benefits
2   SEREBOFF v. MID ATLANTIC MEDICAL SERVICES, INC.

                     Opinion of the Court

from “[a]ll recoveries from a third party (whether by law
suit, settlement, or otherwise).” App. to Pet. for Cert. 38a.
The provision states that “[Mid Atlantic’s] share of the
recovery will not be reduced because [the beneficiary] has
not received the full damages claimed, unless [Mid Atlan
tic] agrees in writing to a reduction.” Ibid.
   The Sereboffs were involved in an automobile accident
in California and suffered injuries. Pursuant to the plan’s
coverage provisions, the plan paid the couple’s medical
expenses. The Sereboffs filed a tort action in state court
against several third parties, seeking compensatory dam
ages for injuries suffered as a result of the accident. Soon
after the suit was commenced, Mid Atlantic sent the Sere
boffs’ attorney a letter asserting a lien on the anticipated
proceeds from the suit, for the medical expenses Mid
Atlantic paid on the Sereboffs’ behalf. App. 87–90. On
several occasions over the next 2½ years, Mid Atlantic
sent similar correspondence to the attorney and to the
Sereboffs, repeating its claim to a lien on a portion of the
Sereboffs’ recovery, and detailing the medical expenses as
they accrued and were paid by the plan.
   The Sereboffs’ tort suit eventually settled for $750,000.
Neither the Sereboffs nor their attorney sent any money to
Mid Atlantic in satisfaction of its claimed lien which, after
Mid Atlantic completed its payments on the Sereboffs’
behalf, totaled $74,869.37.
   Mid Atlantic filed suit in District Court under §502(a)(3)
of ERISA, 29 U. S. C. §1132(a)(3), seeking to collect from
the Sereboffs the medical expenses it had paid on their
behalf. Since the Sereboffs’ attorney had already distrib
uted the settlement proceeds to them, Mid Atlantic sought
a temporary restraining order and preliminary injunction
requiring the couple to retain and set aside at least
$74,869.37 from the proceeds. The District Court ap
proved a stipulation by the parties, under which the Sere
boffs agreed to “preserve $74,869.37 of the settlement
                     Cite as: 547 U. S. ____ (2006)                    3

                          Opinion of the Court

funds” in an investment account, “until the [District]
Court rules on the merits of this case and all appeals, if
any, are exhausted.” App. 69.
   On the merits, the District Court found in Mid Atlantic’s
favor and ordered the Sereboffs to pay Mid Atlantic the
$74,869.37, plus interest, with a deduction for Mid Atlan
tic’s share of the attorney’s fees and court costs the Sere
boffs had incurred in state court. See 303 F. Supp. 2d 691,
316 F. Supp. 2d 265 (Md. 2004). The Sereboffs appealed
and the Fourth Circuit affirmed in relevant part. 407
F. 3d 212 (2005). The Fourth Circuit observed that the
Courts of Appeal are divided on the question whether
§502(a)(3) authorizes recovery in these circumstances. See
id., at 219–220, n. 7.1 We granted certiorari to resolve the
disagreement. 546 U. S. ___ (2005).
                              II 

                              A

   A fiduciary may bring a civil action under §502(a)(3) of
ERISA “(A) to enjoin any act or practice which violates
any provision of this subchapter or the terms of the plan,
or (B) to obtain other appropriate equitable relief (i) to
redress such violations or (ii) to enforce any provisions
of this subchapter or the terms of the plan.” 29 U. S. C.
§1132(a)(3). There is no dispute that Mid Atlantic is a
fiduciary under ERISA and that its suit in District Court
was to “enforce . . . the terms of ” the “Acts of Third Par
ties” provision in the Sereboffs’ plan. The only question is
whether the relief Mid Atlantic requested from the Dis

——————
  1 Compare Administrative Comm. of Wal-Mart Assoc. Health & Wel

fare Plan v. Willard, 393 F. 3d 1119 (CA10 2004), Bombardier Aero
space Employee Welfare Benefits Plan v. Ferrer, Poirot & Wansbrough,
354 F. 3d 348 (CA5 2003), and Administrative Comm. of Wal-Mart
Stores, Inc. v. Varco, 338 F. 3d 680 (CA7 2003), with Qualchoice, Inc. v.
Rowland, 367 F. 3d 638 (CA6 2004), and Westaff (USA) Inc. v. Arce, 298
F. 3d 1164 (CA9 2002).
4   SEREBOFF v. MID ATLANTIC MEDICAL SERVICES, INC.

                     Opinion of the Court

trict Court was “equitable” under §502(a)(3)(B).
   This is not the first time we have had occasion to clarify
the scope of the remedial power conferred on district
courts by §502(a)(3)(B). In Mertens v. Hewitt Associates,
508 U. S. 248 (1993), we construed the provision to author
ize only “those categories of relief that were typically
available in equity,” and thus rejected a claim that we
found sought “nothing other than compensatory damages.”
Id., at 255–256. We elaborated on this construction of
§502(a)(3)(B) in Great-West Life & Annuity Ins. Co. v.
Knudson, 534 U. S. 204 (2002), which involved facts simi
lar to those in this case. Much like the “Acts of Third
Parties” provision in the Sereboffs’ plan, the plan in
Knudson reserved “ ‘a first lien upon any recovery,
whether by settlement, judgment or otherwise,’ that the
beneficiary receives from [a] third party.” Id., at 207.
After Knudson was involved in a car accident, Great-West
paid medical bills on her behalf and, when she recovered
in tort from a third party for her injuries, Great-West
sought to collect from her for the medical bills it had paid.
Id., at 207–209.
   In response to the argument that Great-West’s claim in
Knudson was for “restitution” and thus equitable under
§502(a)(3)(B) and Mertens, we noted that “not all relief
falling under the rubric of restitution [was] available in
equity.” 534 U. S., at 212. To decide whether the restitu
tionary relief sought by Great-West was equitable or legal,
we examined cases and secondary legal materials to de
termine if the relief would have been equitable “[i]n the
days of the divided bench.” Ibid. We explained that one
feature of equitable restitution was that it sought to im
pose a constructive trust or equitable lien on “particular
funds or property in the defendant’s possession.” Id., at
213. That requirement was not met in Knudson, because
“the funds to which petitioners claim[ed] an entitlement”
were not in Knudson’s possession, but had instead been
                 Cite as: 547 U. S. ____ (2006)            5

                     Opinion of the Court

placed in a “Special Needs Trust” under California law.
Id., at 207, 214. The kind of relief Great-West sought,
therefore, was “not equitable—the imposition of a con
structive trust or equitable lien on particular property—
but legal—the imposition of personal liability for the
benefits that [Great-West] conferred upon [Knudson].”
Id., at 214. We accordingly determined that the suit could
not proceed under §502(a)(3). Ibid.
   That impediment to characterizing the relief in Knudson
as equitable is not present here. As the Fourth Circuit
explained below, in this case Mid Atlantic sought “specifi
cally identifiable” funds that were “within the possession
and control of the Sereboffs”—that portion of the tort
settlement due Mid Atlantic under the terms of the ERISA
plan, set aside and “preserved [in the Sereboffs’] invest
ment accounts.” 407 F. 3d, at 218. Unlike Great-West,
Mid Atlantic did not simply seek “to impose personal
liability . . . for a contractual obligation to pay money.”
Knudson, 534 U. S., at 210. It alleged breach of contract
and sought money, to be sure, but it sought its recovery
through a constructive trust or equitable lien on a specifi
cally identified fund, not from the Sereboffs’ assets gener
ally, as would be the case with a contract action at law.
ERISA provides for equitable remedies to enforce plan
terms, so the fact that the action involves a breach of
contract can hardly be enough to prove relief is not equi
table; that would make §502(a)(3)(B)(ii) an empty promise.
This Court in Knudson did not reject Great-West’s suit out
of hand because it alleged a breach of contract and sought
money, but because Great-West did not seek to recover a
particular fund from the defendant. Mid Atlantic does.
                             B
  While Mid Atlantic’s case for characterizing its relief as
equitable thus does not falter because of the nature of the
recovery it seeks, Mid Atlantic must still establish that
6   SEREBOFF v. MID ATLANTIC MEDICAL SERVICES, INC.

                      Opinion of the Court

the basis for its claim is equitable. See id., at 213
(whether remedy “is legal or equitable depends on ‘the
basis for [the plaintiff ’s] claim’ and the nature of the un
derlying remedies sought”). Our case law from the days of
the divided bench confirms that Mid Atlantic’s claim is
equitable. In Barnes v. Alexander, 232 U. S. 117 (1914),
for instance, attorneys Street and Alexander performed
work for Barnes, another attorney, who promised them
“one-third of the contingent fee” he expected in the case.
Id., at 119. In upholding their equitable claim to this
portion of the fee, Justice Holmes recited “the familiar
rul[e] of equity that a contract to convey a specific object
even before it is acquired will make the contractor a trus
tee as soon as he gets a title to the thing.” Id., at 121. On
the basis of this rule, he concluded that Barnes’ undertak
ing “create[d] a lien” upon the portion of the monetary
recovery due Barnes from the client, ibid., which Street
and Alexander could “follow . . . into the hands of . . .
Barnes,” “as soon as [the fund] was identified,” id., at 123.
  Much like Barnes’ promise to Street and Alexander, the
“Acts of Third Parties” provision in the Sereboffs’ plan
specifically identified a particular fund, distinct from the
Sereboffs’ general assets—“[a]ll recoveries from a third
party (whether by lawsuit, settlement, or otherwise)”—
and a particular share of that fund to which Mid Atlantic
was entitled—“that portion of the total recovery which is
due [Mid Atlantic] for benefits paid.” App. to Pet. for Cert.
38a. Like Street and Alexander in Barnes, therefore, Mid
Atlantic could rely on a “familiar rul[e] of equity” to collect
for the medical bills it had paid on the Sereboffs’ behalf.
Barnes, supra, at 121. This rule allowed them to “follow”
a portion of the recovery “into the [Sereboffs’] hands” “as
soon as [the settlement fund] was identified,” and impose
on that portion a constructive trust or equitable lien. 232
U. S., at 123.
  The Sereboffs object that Mid Atlantic’s suit would not
                   Cite as: 547 U. S. ____ (2006)              7

                       Opinion of the Court

have satisfied the conditions for “equitable restitution” at
common law, particularly the “strict tracing rules” that
allegedly accompanied this form of relief. Reply Brief for
Petitioners 8. When an equitable lien was imposed as
restitutionary relief, it was often the case that an asset
belonging to the plaintiff had been improperly acquired by
the defendant and exchanged by him for other property.
A central requirement of equitable relief in these circum
stances, the Sereboffs argue, was the plaintiff ’s ability to
“‘trac[e]’ the asset into its products or substitutes,” or “trace
his money or property to some particular funds or assets.”
1 D. Dobbs, Law of Remedies §4.3(2), pp. 591, n. 10, 592
(2d ed. 1993).
   But as the Sereboffs themselves recognize, an equitable
lien sought as a matter of restitution, and an equitable
lien “by agreement,” of the sort at issue in Barnes, were
different species of relief. See Brief for Petitioners 24–25;
Reply Brief for Petitioners 11; see also 1 Dobbs, supra,
§4.3(3), at 601; 1 G. Palmer, Law of Restitution §1.5, p. 20
(1978). Barnes confirms that no tracing requirement of
the sort asserted by the Sereboffs applies to equitable liens
by agreement or assignment: The plaintiffs in Barnes
could not identify an asset they originally possessed,
which was improperly acquired and converted into prop
erty the defendant held, yet that did not preclude them
from securing an equitable lien. To the extent Mid Atlan
tic’s action is proper under Barnes, therefore, its asserted
inability to satisfy the “strict tracing rules” for “equit-
able restitution” is of no consequence. Reply Brief for
Petitioners 8.
   The Sereboffs concede as much, stating that they “do not
contend—and have never suggested—that any tracing was
historically required when an equitable lien was imposed
by agreement.” Id., at 11. Their argument is that such
tracing was required when an equitable lien was “predi
cated on a theory of equitable restitution.” Ibid. The
8   SEREBOFF v. MID ATLANTIC MEDICAL SERVICES, INC.

                     Opinion of the Court

Sereboffs appear to assume that Knudson endorsed ap
plication of all the restitutionary conditions—including
restitutionary tracing rules—to every action for an equita
ble lien under §502(a)(3). This assumption is inaccurate.
Knudson simply described in general terms the conditions
under which a fiduciary might recover when it was seek
ing equitable restitution under a provision like that at
issue in this case. There was no need in Knudson to cata
log all the circumstances in which equitable liens were
available in equity; Great-West claimed a right to recover
in restitution, and the Court concluded only that equitable
restitution was unavailable because the funds sought were
not in Knudson’s possession. 534 U. S., at 214.
   The Sereboffs argue that, even under Barnes, equitable
relief would not have been available to fiduciaries relying
on plan provisions like the one at issue here, because
when the beneficiary agrees to such a provision “no third-
party recovery” exists which the beneficiary can “place . . .
beyond his control and grant [the fiduciary] a complete
and present right therein.” Brief for Petitioners 25–26
(internal quotation marks omitted). It may be true that,
in contract cases, equity originally required identification
at the time the contract was made of the fund to which a
lien specified in the contract attached. See, e.g., Trist v.
Child, 21 Wall. 441, 447 (1875) (“[A] mere agreement to
pay out of such fund is not sufficient. Something more is
necessary. There must be an appropriation of the fund pro
tanto”). But Barnes explicitly disapproved of this rule,
observing that Trist addressed the issue only in dicta
(since the contract containing the lien provision in Trist
was illegal), and treating the “question as at large,” even
in light of earlier opinions that had dealt with it head on.
Barnes, supra, at 120 (citing Trist, supra; Christmas v.
Russell, 14 Wall. 69 (1872); Wright v. Ellison, 1 Wall. 16
(1864)).
   Apart from those cases, which Barnes discredited, the
                  Cite as: 547 U. S. ____ (2006)              9

                      Opinion of the Court

Sereboffs offer little to undermine the plain indication in
Barnes that the fund over which a lien is asserted need
not be in existence when the contract containing the lien
provision is executed. See 4 S. Symons, Pomeroy’s Equity
Jurisprudence §1236, pp. 699–700 (5th ed. 1941) (“[A]n
agreement to charge, or to assign . . . property not yet in
existence,” although “creat[ing] no legal estate or interest
in the things when they afterwards come into existence . . .
does constitute an equitable lien upon the property” just
as would “a lien upon specific things existing and owned
by the contracting party at the date of the contract”);
Peugh v. Porter, 112 U. S. 737, 742 (1885) (“[I]n contempla
tion of equity, [it] is not material” that the “very fund now in
dispute” was “not . . . in existence” when an equitable lien
over that fund was created). Indeed, the most they can
muster in this regard are several state cases predating
Barnes and a single decision that rests, contrary to the
Sereboffs’ characterization, on the simple conclusion that a
contractual provision purporting to secure an equitable
lien did not properly do so. See Brief for Petitioners 26;
Reply Brief for Petitioners 12; Taylor v. Wharton, 43 App.
D. C. 104 (1915).
   The Sereboffs finally fall back on the argument that
Barnes announced a special rule for attorneys claiming an
equitable lien over funds promised under a contingency fee
arrangement. Outside of this context, they say, the “typi
cal rules regarding equitable liens by assignment” per
sisted and would have prevented recovery here. Reply
Brief for Petitioners 13.
   But Barnes did not attach any particular significance to
the identity of the parties seeking recovery. See 232 U. S.,
at 119. And as Barnes itself makes clear, other cases of
this Court—not involving attorneys’ contingency fees—
apply the same “familiar rul[e] of equity that a contract to
convey a specific object even before it is acquired will
make the contractor a trustee as soon as he gets a title to
10   SEREBOFF v. MID ATLANTIC MEDICAL SERVICES, INC.

                      Opinion of the Court

the thing.” Id., at 121. In Walker v. Brown, 165 U. S. 654
(1897), for instance, the Court approved an equitable lien
over municipal bonds transferred to a company to facilitate
its business. When a supplier of the company suspended
shipments because of delinquent debts, the individual who
had transferred the bonds assured the supplier that “ ‘any
indebtedness that they may be owing you at any time, shall
be paid before the return to me of these bonds . . . and that
these bonds . . . are at the risk of the business of [the com
pany], so far as any claim you may have against [it].’ ” Id.,
at 663. The Court found that this undertaking created an
equitable lien on the bonds, which the supplier could enforce
against the individual after the bonds had been returned to
him when the company became insolvent. Id., at 666. As in
Barnes, the Court resolved the case by applying general
equitable principles, stating that “[t]o dedicate property to a
particular purpose, to provide that a specified creditor and
that creditor alone shall be authorized to seek payment of
his debt from the property or its value, is unmistakably to
create an equitable lien.” 165 U. S., at 666.
                              C
  Shifting gears, the Sereboffs contend that the lower courts
erred in allowing enforcement of the “Acts of Third Parties”
provision, without imposing various limitations that they
say would apply to “truly equitable relief grounded in prin
ciples of subrogation.” Reply Brief for Petitioners 5. Accord
ing to the Sereboffs, they would in an equitable subrogation
action be able to assert certain equitable defenses, such as
the defense that subrogation may be pursued only after a
victim had been made whole for his injuries. Id., at 5–6.
Such defenses should be available against Mid Atlantic’s
action, the Sereboffs claim, despite the plan provision that
“[Mid Atlantic’s] share of the recovery will not be reduced
because [the beneficiary] has not received the full damages
claimed, unless [Mid Atlantic] agrees in writing to a re
                      Cite as: 547 U. S. ____ (2006)                       11

                           Opinion of the Court

duction.” App. to Pet. for Cert. 38a.
   But Mid Atlantic’s claim is not considered equitable be
cause it is a subrogation claim. As explained, Mid Atlantic’s
action to enforce the “Acts of Third Parties” provision quali
fies as an equitable remedy because it is indistinguishable
from an action to enforce an equitable lien established by
agreement, of the sort epitomized by our decision in Barnes.
See 4 Palmer, Law of Restitution §23.18(d), at 470 (A subro
gation lien “is not an express lien based on agreement, but
instead is an equitable lien impressed on moneys on the
ground that they ought to go to the insurer”). Mid Atlantic
need not characterize its claim as a freestanding action for
equitable subrogation. Accordingly, the parcel of equitable
defenses the Sereboffs claim accompany any such action are
beside the point.2
                        *     *    *
  Under the teaching of Barnes and similar cases, Mid
Atlantic’s action in the District Court properly sought
“equitable relief ” under §502(a)(3); the judgment of the
Fourth Circuit is affirmed in relevant part.

                                                         It is so ordered.




——————
   2 The Sereboffs argue that, even if the relief Mid Atlantic sought was

“equitable” under §502(a)(3), it was not “appropriate” under that provision
in that it contravened principles like the make-whole doctrine. Neither
the District Court nor the Court of Appeals considered the argument that
Mid Atlantic’s claim was not “appropriate” apart from the contention that
it was not “equitable,” and from our examination of the record it does not
appear that the Sereboffs raised this distinct assertion below. We decline
to consider it for the first time here. See National Collegiate Athletic Assn.
v. Smith, 525 U. S. 459, 470 (1999).