The U.S. Supreme Court said it is considering taking two retirement-related cases involving IBM and the Roman Catholic Archdiocese of San Juan at its conference Thursday, according to released orders.
In Retirement Plans Committee of IBM et al. vs. Larry W. Jander et al., International Business Machines is appealing an appellate court decision, arguing that the court incorrectly interpreted the standards for making fiduciary breach claims about company stock in defined contribution plans.
Taking the case would require the Supreme Court to revisit a unanimous 2014 ruling in Fifth Third Bancorp et al. vs. Dudenhoeffer et al., which established a series of guidelines for lower courts to use in assessing stock-drop complaints.
In its March 8 petition to the Supreme Court, the Retirement Plans Committee of IBM said the appeals court decision "reopens the door to lawyer-driven class actions that spring up after every stock drop." The plaintiff, a participant in an IBM 401(k) plan, asked the Supreme Court to reject IBM's request, saying the appeals court correctly followed the litigation guidelines. "Lacking any basis to criticize" the decision, "petitioners make a variety of bombastic claims about the parade of horribles about to descend on the federal courts" due to the ruling, according to court documents.
A District Court judge had originally rejected the complaint by participants that IBM's fiduciaries should have protected their retirement accounts when the company's stock fell after IBM's efforts to sell its microelectronics unit in 2014.
The Supreme Court will also consider a petition from the Roman Catholic Archdiocese of San Juan, Puerto Rico, to decide if courts can override a religious organization's legal structure and force affiliates to face joint and several pension liability as a single entity. The Roman Catholic Archdiocese of San Juan filed for bankruptcy in August after a $4.7 million judgment in a case brought by pension plan participants against the Superintendence of Catholic Schools of the Archdioceses of San Juan. After the Puerto Rico Supreme Court authorized immediate seizure of church assets, the archdiocese tried but failed to seek bankruptcy protection.
