Fiduciary Liability: Thole vs. U.S. Bank I came across this Supreme…

Question Answered step-by-step Fiduciary Liability: Thole vs. U.S. Bank I came across this Supreme… Fiduciary Liability: Thole vs. U.S. Bank  I came across this Supreme Court decision and thought it might make for a good class discussion topic that touches on defined benefit plans and fiduciary liability. This discussion is asking you to consider the case Thole vs U.S. Bank and see in you can identify possible breaches in fiduciary duty to the U.S. Bank defined benefit pension plan. Paraphrased from the Cornell Law School Library website:Case Facts: Plaintiff James Thole and others brought a class action lawsuit against U.S. Bank and others over alleged mismanagement of a defined benefit pension plan between 2007 and 2010. The plaintiffs alleged that the defendants violated the Employee Retirement Income Security Act of 1974 (ERISA) by breaching their fiduciary duties and causing the plan to engage in prohibited transactions with a subsidiary company of U.S. Bank. Specifically, they claim that U.S. Bank used its subsidiary to invest plan assets and thereby violated ERISA’s duties of loyalty and prudence by self-dealing and making poor investment decisions of the plan assets.  The plaintiffs argued that as a result of these prohibited transactions, the plan suffered significant losses and became underfunded in 2008 by $750 million.The defendants filed a motion to dismiss the complaint, which the district court granted in part. However, the court permitted the plaintiffs to proceed with their claim that the defendants engaged in a prohibited transaction by investing plan money using a subsidiary. In 2014, with the parties still in litigation, the plan became overfunded; that is, it contained more money than was needed to meet its obligations. The defendants raised the argument that the plaintiffs had not suffered any financial loss and moved to dismiss the remainder of the action. Conclusion:  5 – 4 Decision for U.S. BankMajority: Roberts, Thomas, Alito, Gorsuch and KavanaughMinority: Ginsburg, Breyer, Sotomayor and Kagan Article from Pension & Investments on the Thole vs. U.S. Bank decision – Pension & Investments: Participants in Fully Funded Plans Can’t Bring ERISA Suits  Question: The Supreme Court’s decision addressed the question of standing, not fiduciary liability . For this discussion, let’s forget the standing consideration and focus on whether there was a fiduciary breach. Do you believe there was a fiduciary breach of duty on the part of the defendants? If so, identify the breach or breaches. If you believe there was no breach of fiduciary liability, what was the flaw in the plaintiffs argument?    PermalinkReply    Image transcription textPensions & Investments June 01, 2020 11:17 AM Participantsin fully funded plans can’t bring ERISA suits – ruling HAZELBRADFORD Bloomberg The Supreme Court dismiss… Show more… Show moreImage transcription textmajority, Associate Justice Brett Kavanaugh said thatbecause the plaintiffs “have no concrete stake inthe lawsuit, they lack Article III standing …. Show more… Show more  Law Social Science Tax law FI 422 Share QuestionEmailCopy link Comments (0)