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U.S. Supreme Court Sends ERISA Investment Fee Case Back For Further Review

Today, the U.S. Supreme Court ruled that an ERISA plan participant may allege that a plan fiduciary breached the duty of prudence by not properly monitoring the plan’s investment options as long as the alleged breach of the continuing duty occurred within six years of the suit.  See Tibble v. Edison Int’l (U.S. No. 13-550).  In so ruling, the Court vacated the Ninth Circuit’s earlier decision in which it held that, absent a “significant change of in circumstances,” a participant could not pursue such a claim based on the selection of an investment option more than six years prior to the suit.  The Court reasoned that trust law requires a fiduciary to conduct “a regular review of its investments with the nature and timing of the review contingent on the circumstances.”  While some have already opined that the Court’s decision has paved the way for increased fee litigation, that is not necessarily the case.  It will not be enough to simply plead that defendants failed, within six years of filing suit, to prudently monitor an investment option.  Rather, as the Supreme Court articulated many years ago, a plaintiff must be able to plead a plausible claim.  That is, plaintiffs will have to plead “enough factual matter” to “nudge their claims across the line from conceivable to plausible.”  To that end, the Supreme Court remanded the Tibble case to the Ninth Circuit to determine for an evaluation of the “contours of the alleged breach of fiduciary duty” and whether the fiduciaries satisfied their continuing obligation to monitor the investment options during the six years prior to the filing of the lawsuit.

© 2022 Proskauer Rose LLP. National Law Review, Volume V, Number 138
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About this Author

Russell L Hirschhorn ERISA Litigation, employee benefits attorney, Proskauer
Senior Counsel

Russell Hirschhorn is a Senior Counsel in the Labor & Employment Law Department, where he focuses on complex ERISA litigation and advises employers, fiduciaries and trustees on ERISA benefit and fiduciary issues. 

Russell represents employers, plan sponsors, plans, trustees, directed trustees and fiduciaries in all phases of litigation, arbitration and mediation involving employee benefits, including class action and individual claims relating to ERISA’s fiduciary duty and prohibited transaction provisions, denials of claims for benefits, severance plans, ERISA Section 510,...

212.969.3286
Anthony S Cacace, Labor and Employment attorney, Proskauer Rose law firm
Associate

Anthony S. Cacace is an Associate in the Labor and Employment Department and a member of the Employee Benefits, Executive Compensation & ERISA Litigation Practice Center. Anthony focuses on ERISA litigation and counsels plans and plan sponsors on a full spectrum of employee benefit issues.

Anthony represents employers, plan sponsors, plan trustees and other plan fiduciaries in lawsuits brought pursuant to ERISA, alleging claims for breaches of fiduciary duty, benefit claim denials, plan investment losses and improper plan amendments. He also represents plan clients during...

212-969-3307
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