The Employee Retirement Income Security Act allows for claims against pension plans that are overfunded, the federal government told the U.S. Supreme Court, weighing in on a battle between U.S. Bank and retirees looking to revive their suit against a plan that's now in the black.
In an amicus brief Wednesday, U.S. Solicitor General Noel J. Francisco urged the nation’s highest court to overturn an Eighth Circuit decision in the retirees' case holding that workers can’t sue fully funded pension plans for fiduciary breaches under ERISA. The federal government noted, however, that it isn’t taking a stance on whether the retirees can show U.S. Bank breached its fiduciary duties or are entitled to relief.
The solicitor general first weighed in on the case in May when he asked the high court to grant the retirees' request to hear the dispute, and the justices agreed to take up the case in June.
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The Pension Rights Center also filed a brief supporting the retirees Wednesday, arguing that plan participants’ standing shouldn’t hinge on the funding status of their plan — “a calculation that can confound actuaries and a status that can change significantly and numerous times over the course of a lawsuit, much less over the lifetime of a plan.” The AARP filed an amicus brief backing the retirees earlier the same day.
Michelle C. Yau, an attorney for the participants, told Law360 in a statement Thursday that they are “very pleased” with the briefs supporting their position.
“The solicitor general’s brief explains that ERISA participants’ ability to sue for fiduciary breach is rooted firmly in the common law of trusts, endorsed by Congress and consistent with Supreme Court precedent,” Yau said. “And the brief filed by the Pension Rights Center makes clear why a plan’s funded status 'is not a sensible measure of injury in fact.’”
The amici briefs followed the first arguments filed by the retirees at the Supreme Court after it agreed to hear their case. The retirees told the high court that the Eighth Circuit wrongly found they couldn't sue U.S. Bank and other affiliated parties for allegedly losing their pension plan three-quarters of a billion dollars through fiduciary breaches after the company contributed enough for the plan to meet ERISA's funding obligations.
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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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