WONG v. Empire Center for Public Policy, Inc., and Government Justice Center, Inc., Amici Curiae. (2025)

Order, Supreme Court, New York County (Andrea Masley, J.), entered on or about July 3, 2024, which granted the motion of defendants the New York City Employees’ Retirement System, Teachers’ Retirement System of the City of New York, and Board of Education Retirement System of the City of New York to dismiss the complaint, unanimously affirmed, without costs.

On this pre-answer motion to dismiss, plaintiffs have failed to establish standing (see Deutsche Bank Natl. Trust Co. v. Umeh, 145 A.D.3d 497, 497, 41 N.Y.S.3d 882 [1st Dept. 2016]), because as recipients of a defined benefit retirement plan, plaintiffs were entitled to receive a “fixed payment each month” that did “not fluctuate with the value of the plan or because of the plan fiduciaries’ good or bad investment decisions” (Thole v. U.S. Bank N.A., 590 U.S. 538, 540, 140 S.Ct. 1615, 207 L.Ed.2d 85 [2020]).  Moreover, absent an injury, there was “little to be gained from an abstract challenge to alleged fiduciary misconduct at the cost of the plan and those participants who did not bring (and may not approve of) the suit” (David v. Alphin, 704 F.3d 327, 336 [4th Cir. 2013]).  Although this Court is “not bound to adhere to federal standing requirements” (US Bank N.A. v. Nelson, 36 N.Y.3d 998, 1003 n 4, 139 N.Y.S.3d 118, 163 N.E.3d 49 [2020] [Wilson, J., concurring]), under New York law, plaintiffs must nevertheless demonstrate that they suffered an “injury in fact” (Matter of Mental Hygiene Legal Serv. v. Daniels, 33 N.Y.3d 44, 50, 98 N.Y.S.3d 504, 122 N.E.3d 21 [2019] [internal quotation marks omitted]).  Plaintiffs’ reliance on the common law of trusts is unavailing, as defined benefit plans are “more in the nature of a contract,” whereby the benefits under such plans “are fixed and will not change, regardless of how well or poorly the plan is managed.  The benefits paid to the participants in a defined-benefit plan are not tied to the value of the plan” (Thole, 590 U.S. at 542–543, 140 S.Ct. 1615).

The crux of plaintiffs’ claim, that defendants breached their fiduciary duties as plan trustees by divesting the plan of fossil-fuel based investments in order to allocate more to “green” investments, is speculative and “insufficient to trigger judicial intervention” (New York State Assn. of Nurse Anesthetists v. Novello, 2 N.Y.3d 207, 214, 778 N.Y.S.2d 123, 810 N.E.2d 405 [2004] [internal quotation marks omitted];  see Matter of Bolofsky v. City of N.Y., 205 A.D.3d 515, 516, 169 N.Y.S.3d 41 [1st Dept. 2022] [finding no standing to bring claims where risk of “harm is entirely conjectural”]).  Discretion to make investment decisions for public retirement systems is vested in politically accountable trustees, and their exercise of that authority cannot be encroached upon by the Legislature or the courts (see Sgaglione v. Levitt, 37 N.Y.2d 507, 512–513, 375 N.Y.S.2d 79, 337 N.E.2d 592 [1975]).  Here, particularly based on the documentary evidence and the absence of any support for the allegation that the plans might be unable to cover their obligations to retirees, or that the City will be unable to cover any shortfall, plaintiffs’ arguments are speculative.

We have considered plaintiffs’ remaining contentions and find them unavailing.

Motion for leave to file an amicus brief, granted.