U.S. Bank retirees have urged the U.S. Supreme Court to overturn a lower court decision that would curb lawsuits against corporate pension plans, arguing that U.S. Bank's claim that workers can't file fiduciary-breach cases against fully funded pension plans is "just as backwards as it sounds."
Retirees attempting to hold the bank liable for $750 million in losses to its pension plan told the high court Thursday that the bank's claim the retirees have "no stake in this litigation" because they aren't at risk of losing their benefits flies in the face of the Employee Retirement Income Security Act.
Congress never intended for ERISA to excise the interests of beneficiaries or make them "mere bystanders" to a fiduciary breach as the bank has claimed, the retirees said.
"Respondents' view is just as backwards as it sounds. ERISA requires plan assets to be held in 'trust' 'for the exclusive benefit of' the participants," the retirees said. "It thus defies reality to say that Congress eschewed the elements of trust law that gave beneficiaries the right to sue."
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The high court agreed in June to weigh in on whether the Eighth Circuit was on solid ground when it ruled that workers lacked standing to sue fully funded pension plans for breaches of fiduciary duty because the workers couldn't prove they'd suffer a financial harm from the mismanagement.
That ruling conflicted with the Second, Third and Sixth circuits, which have held that a violation of workers' ERISA rights is enough to justify a lawsuit.
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The retirees are represented by Karen L. Handorf, Michelle C. Yau and Mary J. Bortscheller of Cohen Milstein Sellers & Toll PLLC, and Peter K. Stris, Brendan S. Maher, Rachana A. Pathak, Douglas D. Geyser and John Stokes of Stris & Maher LLP.
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