More variations on ERISA and securities law cases are expected to be taken up by the court between now and the session's end in June, as petitions from plaintiffs, defendants and interested parties continue to roll in.
The justices have been petitioned by United Refining Co. to address a split among five District Court circuits about whether a pension plan would be required to keep paying benefits at a higher level, even if that higher level was due to a pension plan administrator's mistake that was later corrected.
Continued confusion on this issue will deter employers from offering pension plans, said Jan Jacobson, senior counsel for retirement policy at the American Benefits Council, Washington, which represents large plans. “The concern going forward is whether employers will continue to sponsor and maintain plans if a plan administrator's interpretation can permanently amend the plan and vastly increase their liability. It has very broad potential impact,” said Ms. Jacobson, whose group filed an amicus brief.
Employee stock in defined contribution plans could come up again, if the court revisits Harris vs. Amgen Inc., a case it remanded to the 9th U.S. Circuit of Appeals in San Francisco, following a pivotal 2014 Supreme Court decision in Fifth Third Bancorp et al. vs. Dudenhoeffer et al., that removed the presumption of prudence standard often used to defend the use of employer stock against fiduciary-breach lawsuits. In a joint amicus brief, the American Benefits Council and U.S. Chamber of Commerce hope the court will take it on before liability concerns hasten the decline of employer stock offerings. If the court takes a pass, there will be a groundswell of fiduciary-breach cases, Ms. Jacobson predicted.
Another petition, which is backed by Secretary of Labor Thomas Perez, seeks to clarify whether ERISA litigants can shop for legal forums to bring their cases against plan fiduciaries. The justices have reached out to Solicitor General Donald B. Verrilli Jr. to get his take on Smith vs. AEGON Cos. Pension Plan, which questions the validity of sponsors' venue selection clauses in plan documents, and could affect how plan sponsors enforce similar plan provisions for bringing lawsuits.
A closely watched insider trading conviction against hedge fund managers Todd Newman and Anthony Chiasson that was later overturned by the 2nd Circuit could be back in play, if Mr. Verrilli persuades the high court to reconsider it based on updated definitions of insider trading.
One possible sleeper issue that could come up is how the Securities and Exchange Commission handles in-house administrative proceedings, which has been challenged on constitutional grounds in an increasing number of lawsuits in numerous jurisdictions. It is considered a long shot for a Supreme Court term that already has seen thousands of cases rejected, but “the number of cases ... is becoming an avalanche, and it is quite probable that the court will take these issues up this term or next,” said attorney Michael McColloch, who represents a Houston hedge fund manager battling the SEC in court.