United States Supreme Court

In an action in which plaintiffs allege that defendants breached the fiduciary duty of prudence imposed by the Employee Retirement Income Security Act of 1974 (ERISA) in their administration of the "employee stock ownership plan" (ESOP), which invests its funds primarily in defendant-company's stock, the Sixth Circuit Court of Appeals' decision that ESOP fiduciaries are entitled to a "presumption of prudence" that does not apply to other ERISA fiduciaries but that the presumption is an evidentiary one and therefore does not apply at the pleading stage, and that plaintiff stated a claim for breach of fiduciary duty, is vacated and remanded, where: 1) ESOP fiduciaries are not entitled to any special presumption of prudence; 2) ESOP fiduciaries are subject to the same duty of prudence that applies to ERISA fiduciaries in general, except that they need not diversify the fund's assets; and 3) on remand, the Sixth Circuit should reconsider whether the complaint states a claim by applying the pleading standard as discussed in Ashcroft v. Iqbal, and Bell Atlantic Corp. v. Twombly.

Appellate Information

• Decided 06/25/2014
• Published 06/25/2014

Judges

• BREYER

Court

• United States Supreme Court

Counsel