The U.S. Solicitor General is recommending that the Supreme Court accept an ERISA case questioning whether pension plan participants can sue plan fiduciaries if they have not experienced financial harm. Solicitor general opinions are not binding but the court's request for them is a strong indicator that the court will consider a case.
Plan participants petitioned the Supreme Court to accept the case, Thole vs. U.S. Bank, after the 8th U.S. Circuit Court of Appeals said participants did not have statutory standing to assert breach of fiduciary duty based on an alleged failure to diversify investments, since the participants had not suffered any individual financial harm.
When the participants questioned the investments involved, the plan sponsor, U.S. Bank replaced those amounts, which caused the plan to be overfunded.
The solicitor general's brief said the court should take the case because participants have standing to sue even without a monetary loss and there is disagreement on the standing question in lower courts.
An amicus brief from the U.S. Chamber of Commerce argued that plaintiffs did not suffer an injury in fact sufficient to confer standing, and that stopping uninjured plaintiffs from bringing suit against defined benefit plan administrators is necessary to avoid profligate and unconstitutional litigation that would harm beneficiaries of plans.
The Supreme Court will consider the petition at its June 20 conference.