On Friday December 13, 2013, the Supreme Court (“Court”) granted certiorari in the Dudenhoeffer case to consider “whether the Sixth Circuit erred by holding that [plaintiffs in an ERISA stock drop case] were not required to plausibly allege in their complaint that the fiduciaries … abused their discretion by remaining invested in employer stock, in order to overcome the presumption that their decision to invest in employer stock was reasonable…”. The Court declined to consider whether fiduciaries could be liable for incorporating misleading SEC filings in a Plan’s summary plan description. We expect that the Court will hear the case in the spring.
As we previously advised you, the Department of Labor’s amicus brief requested the Court to grant certiorari with respect to the applicability of the presumption of prudence, but also requested that the Court reframe the first issue as whether fiduciaries are entitled to rely on any presumption of prudence with respect to a company stock fund. While the Court did not reframe the question, we expect that these issues will be raised again by the Department of Labor at oral argument.
Please contact Bill Ryan or David Cohen with any questions.