In December 2018, we reported here that the Second Circuit became the first court at any level to allow an ERISA stock-drop claim to survive a motion to dismiss since the Supreme Court revamped the pleading standard for such claims several years ago. The Second Circuit reinstated a claim for breach of fiduciary duty under ERISA brought by participants in IBM's 401(k) plan who suffered losses from their investment in IBM stock. Jander v. Retirement Plans Committee of IBM, et al., 2018 WL 6441116 (2d Cir. Dec. 10, 2018). Since then, IBM petitioned the U.S. Supreme Court for review of the Second Circuit's decision on multiple grounds, including that the decision stood in direct conflict with decisions from the Fifth and Sixth Circuits. IBM's petition was supported by an amici brief written by Proskauer on behalf of the U.S. Chamber of Commerce, American Benefits Council, and ERISA Industry Committee.
On June 3, 2019, the Supreme Court granted IBM's petition for certiorari. It is, of course, impossible to predict how the Supreme Court will ultimately rule in this case, but we are hopeful that the Court's decision to grant certiorari is a signal that it disagrees with the approach the Second Circuit has taken in the case against IBM.
Stay tuned for further developments. The case is Retirement Plans Comm. of IBM v. Jander, No. 18-1165 (2019).
U.S. Supreme Court Agrees To Hear IBM's Challenge To Second Circuit Ruling In ERISA Stock-Drop Suit
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