News & Analysis as of

Seventh Circuit Eases ERISA Plaintiffs’ Pleading Burden Against Private Company Plan Fiduciaries

On August 25, 2016, the U.S. Court of Appeals for the Seventh Circuit, in Allen v. GreatBanc Trust Co., No. 15-3569, 2016 WL 4474730 (7th Cir. 2016), held that (1) the defendant in an ERISA case, rather than the plaintiff,...more

Seventh Circuit Rejects Dudenhoeffer Applicability to Privately Held Stock - Decision Clarifies Burden to Plead ERISA Section 406...

The U.S. Court of Appeals for the Seventh Circuit's Aug. 25, 2016, decision in Allen v. GreatBanc Trust Co., No. 15-3569, made it the first court in a published opinion to expressly reject Fifth Third Bancorp v....more

SCOTUS v. the Ninth Circuit on Failure to Enforce ERISA Stock-Drop Pleading Standard

In a terse per curiam opinion, the U.S. Supreme Court in Amgen Inc. v. Harris, No. 15-278 (U.S. Jan. 25, 2016), made clear that it expects lower courts to faithfully apply the pleading requirements for “stock-drop” cases...more

U.S. Supreme Court Clarifies Pleading Standard for Cases Involving Retirement Plan Investments in Employer Stock

The U.S. Supreme Court's recent decision in Amgen, Inc. v. Harris makes clear that the Court's heightened pleading standard applies to claims that a fiduciary of a retirement plan that has investments in employer stock should...more

Supreme Court Provides Additional Clarity on Pleading Requirements for ERISA Stock Drop Cases

The Supreme Court has provided additional clarity on the Fifth Third Bancorp v. Dudenhoeffer decision. In Dudenhoeffer, the Supreme Court held that a fiduciary decision to invest in employer stock is not deemed to be...more

Supreme Court Emphasizes Heightened Pleading Standard for Stock Drop Cases

On January 25, 2016, the Supreme Court of the United States issued a per curiam opinion in Amgen Inc. v. Harris, holding that the Amgen, Inc. employees who filed suit after the value of the employer stock in which they had...more

The Supreme Court Meant What It Said On Employer Stock Funds

On January 25, 2016, in Amgen, Inc. v. Harris, 2016 WL 280886, the Supreme Court sent a strong message to the lower courts, plaintiffs and ERISA fiduciaries that pleading standards for breach of fiduciary duty prudence claims...more

The Supreme Court Once Again Visits The Employer Stock Dispute — Amgen, Inc. v. Harris

Background — fiduciary obligations vs. ERISA’s specific nod to employer stock. Courts have long struggled to determine how to reconcile ERISA’s rules explicitly allowing participants in defined contribution plans to invest in...more

Prudent is as Prudent Does: Divided Sixth Circuit Affirms Summary Judgment in Favor of State Street in Post-Dudenhoeffer Review...

In 1995, the Third Circuit adopted the presumption that an employee stock ownership plan (“ESOP”) fiduciary’s decision to remain invested in the employer’s securities was prudent. Over the following years, a number of other...more

Declaration of Independence: Preserving the Role of the Independent Fiduciary Post-Dudenhoeffer

In the wake of Fifth Third v. Dudenhoeffer, a complaint that seeks to hold an ERISA fiduciary liable for failing to divest a plan of employer stock based solely upon publicly available information fails to state a plausible...more

Employee Benefits Developments - January 2015

IRS Publishes FAQs Regarding Rollovers of After-Tax Contributions. In the December 2014 issue of Employee Benefits Developments, we reported on IRS Notice 2014-54, which allows participants to direct and allocate after-tax...more

"Dudenhoeffer: An Effective Tool to 'Weed Out Meritless' Employer Stock-Drop Claims?"

In Fifth Third Bancorp v. Dudenhoeffer, 573 U.S. __, 134 S. Ct. 2459 (2014), a unanimous U.S. Supreme Court held that fiduciaries of an employee stock ownership plan (ESOP) are not entitled to a special presumption that their...more

The Directed Trustee in the Post-Dudenhoeffer World

Overview - Court cases challenging the actions of Employee Retirement Income Security Act fiduciaries have continued unabated since the scandal of Enron in 2002. Since then, a large number of cases are in the ‘‘stock...more

In Post-Dudenhoeffer Decision, Class Action Plaintiffs Are Allowed to Pursue Their Claims For Fiduciary Breach Against Eastman...

A federal district court has permitted plaintiffs to pursue class actions against the fiduciaries of two Eastman Kodak defined contribution plans on the ground that those fiduciaries failed to prudently manage the plan funds....more

Ninth Circuit Applies Fifth Third v. Dudenhoeffer to Reverse Dismissal of Stock Drop Case

Speed Read - The Ninth Circuit becomes the first appellate court to interpret the Supreme Court’s Fifth Third v. Dudenhoeffer holding. In its ruling, the Ninth Circuit held that participants can maintain a claim...more

What Fifth Third Bancorp v. Dudenhoeffer May Mean for ERISA Stock-Drop Litigation

Did the future course of “stock-drop” litigation under the Employee Retirement Income Security Act (ERISA) against fiduciaries of public company employee stock ownership plans (ESOPs) take a sharp turn on June 25, 2014, when...more

Supreme Court Establishes New Standard for Fiduciaries of ESOP Plans

The Supreme Court, in Fifth Third Bancorp v. John Dudenhoeffer (Dudenhoeffer), recently established new standards for determining when fiduciaries of Employee Stock Ownership Plans (ESOPs) act prudently regarding a company’s...more

Fourth Circuit Adds Even More Complexity to Benefit Plan Fiduciaries' Role

The U.S. Supreme Court’s recent Dudenhoeffer decision demonstrated that benefit plan fiduciaries are definitely in the litigation spotlight, and that they should exercise caution to avoid fiduciary liability in garden-variety...more

U.S. Supreme Court Issues Important Decision Affecting Fiduciaries of ESOPs

In a recent decision, Fifth Third Bankcorp v. Dudenhoeffer, 189 L.Ed. 2d 457 (2014), the U.S. Supreme Court vacated the “presumption of prudence” previously given to fiduciaries of employee-owned stock ownership plans (ESOPs)...more

Supreme Court Sets New Standards for ERISA Stock-Drop Cases

In the Fifth Third Bancorp v. Dudenhoeffer decision issued June 25, 2014, the Supreme Court unanimously rejected the “Moench presumption”, a presumption of prudence for employer stock held in an ESOP or a 401(k) plan company...more

Supreme Court Rules No Presumption of Prudence for ESOP Fiduciaries

The United States Supreme Court clarified the duty of prudence that employee stock ownership plan fiduciaries owe to plan participants in its June 25, 2014 decision Fifth Third Bancorp v. Dudenhoeffer 134 S.Ct. 2459 (U.S....more

A New Reality for ESOP Fiduciaries - Company Stock Investments for Employee Participants in Retirement Plans of Public and...

For the ESOP fiduciary of a publicly traded employer, the Supreme Court has made clear that non-public insider information is not required to be used in reaching a decision to buy, hold or sell employer securities....more

Supreme Court Unanimously Rejects Special "Presumption of Prudence" For Investment in Employer Stock

In the past, fiduciaries of employee stock ownership plans (ESOPs) and other defined contribution plans that invest in employer stock generally have been able to rely on a special “presumption of prudence” in court when...more

What Does the Supreme Court’s Ruling in Fifth Third Bancorp v. Dudenhoeffer Mean for ESOPs and Other Retirement Plan Fiduciaries?

Fiduciaries of qualified retirement plans, including Employee Stock Ownership Plans (ESOPs), have generally been entitled to a presumption that they have acted prudently in offering employer stock as an investment alternative...more

Perspectives - Fall 2012 Volume 3, Edition 2: An Executive Compensation, Benefits & Human Resources Law Update

In this Issue: - Don’t “Moench”ion It: Supreme Court Rejects Presumption of Prudence for ESOP Fiduciaries - Avoiding Claims of Excessive Fund Fees - Risk of ERISA Class Actions Can Be Reduced by Use of...more

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