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
Employer Stock Fund Litigation
Second Circuit Revives Dismissed ERISA Stock-Drop Suit
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). In so ruling, the Second Circuit became the…
Fifth Circuit Affirms Dismissal of ERISA Stock Drop Action
By Joseph Clark on
The Fifth Circuit agreed that a participant in Idearc’s 401(k) plan failed to plausibly plead that the plan fiduciary’s failure to act on publicly available information about Idearc amounted to a breach of fiduciary duty in connection with making Idearc stock available as an investment option in the plan. The decision was guided by an…
Sixth Circuit Dismisses ERISA Stock Drop Action Against Cliffs Natural Resources
By Neil V. Shah on
The Sixth Circuit affirmed the dismissal of ERISA stock drop claims by participants in the Cliffs Natural Resources’ 401(k) Plan. The participants alleged fiduciary breach claims based on public and non-public information arising out of the collapse in iron ore prices that caused the company’s stock price to decline 95%. With respect to the public…