Skip to main content
MENU
Subscribe
  • Subscribe
  • Account
  • LOGIN
  • Topics
    • Alternatives
    • Consultants
    • Coronavirus
    • Courts
    • Defined Contribution
    • ESG
    • ETFs
    • Hedge Funds
    • Industry Voices
    • Investing
    • Money Management
    • Opinion
    • Partner Content
    • Pension Funds
    • Private Equity
    • Real Estate
    • Russia-Ukraine War
    • SECURE Act 2.0
    • Special Reports
    • White Papers
  • Rankings & Awards
    • 1,000 Largest Retirement Plans
    • Top-Performing Managers
    • Largest Money Managers
    • DC Money Managers
    • DC Record Keepers
    • Largest Hedge Fund Managers
    • World's Largest Retirement Funds
    • Best Places to Work in Money Management
    • Excellence & Innovation Awards
    • WPS Innovation Awards
    • Eddy Awards
  • ETFs
    • Latest ETF News
    • Fund Screener
    • Education Center
    • Equities
    • Fixed Income
    • Commodities
    • Actively Managed
    • Alternatives
    • ESG Rated
  • ESG
    • Latest ESG News
    • The Institutional Investor’s Guide to ESG Investing
    • ESG Sustainability - Gaining Momentum
    • Climate Change: The Inescapable Opportunity
    • Impact Investing
    • 2022 ESG Investing Conference
    • ESG Rated ETFs
  • Defined Contribution
    • Latest DC News
    • DC Money Manager Rankings
    • DC Record Keeper Rankings
    • Innovations in DC
    • Trends in DC: Focus on Retirement Income
    • 2022 Defined Contribution East Conference
    • 2022 DC Investment Lineup Conference
  • Searches & Hires
    • Latest Searches & Hires News
    • Searches & Hires Database
    • RFPs
  • Performance Data
    • P&I Research Center
    • Earnings Tracker
    • Endowment Returns Tracker
    • Corporate Pension Contribution Tracker
    • Pension Fund Returns Tracker
    • Pension Risk Transfer Database
    • Future of Investments Research Series
    • Charts & Infographics
    • Polls
  • Careers
  • Events
    • View All Conferences
    • View All Webinars
    • 2022 Retirement Income Conference
    • 2022 Managing Pension Risk & Liabilities
    • 2022 WorldPensionSummit
Breadcrumb
  1. Home
  2. COURTS
January 13, 2020 01:44 PM

Supreme Court declines to consider Putnam fiduciary breach case

Robert Steyer
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print
    Getty Images/iStockphoto

    The Supreme Court building in Washington, D.C.

    The U.S. Supreme Court on Monday declined to hear a petition by Putnam Investments asking to rule on the contentious issue of whether plaintiffs must prove a loss in an ERISA fiduciary breach lawsuit or whether sponsors must disprove a loss and that the loss was caused by the fiduciary breach.

    The Supreme Court provided no explanation for its decision in the case of Putnam Investments LLC et al. vs. Brotherston et al. Putnam Investments asked the court to overturn a Boston federal appeals court ruling that placed the burden on Putnam regarding a participant's complaint about its 401(k) plan.

    This case had rattled the DC industry as evidenced by the filing of friend-of-the court briefs — by trade groups such as the Investment Company Institute, American Benefits Council and ERISA Industry Committee — asking the Supreme Court to create a uniform standard for evaluating loss causation, placing the responsibility on plaintiffs.

    They said different appeals courts applied different standards for responsibility in fiduciary breach cases. Some appeals courts sided with sponsors, but some, like the 1st U.S. Circuit of Appeals Court in Boston, supported the plaintiffs.

    The federal government filed a friend-of-the court brief on Nov. 27 recommending that the Supreme Court decline to hear the case.

    "Although some disagreement exists among courts of appeals" about loss causation, "this case would be a poor vehicle in which to resolve that disagreement," Noel Francisco, the solicitor general, wrote in his brief. He was supported by Kate S. O'Scannlain, solicitor of labor for the Department of Labor.

    Mr. Francisco focused primarily on errors made by a U.S. District Court judge in Boston, who had ruled in favor of Putnam. The federal appeals court in Boston cited these errors in reversing part of the judge's decision. The District Court judge had held a trial, but he dismissed certain allegations against Putnam before the trial was completed, he wrote.

    "The facts have not been fully developed," Mr. Francisco wrote. "The antecedent determinations necessary to address whether (Putnam's) alleged breach caused a loss — and whether there was even a breach and a related loss — have not been decided."

    The Supreme Court routinely asks the federal government, represented by the solicitor general, for its views. The court doesn't automatically follow these recommendations.

    Plan participant John Brotherston sued Putnam in November 2015, alleging several breaches of fiduciary duty, including stocking the plan with proprietary products and failing to monitor the investment lineups' cost and performance.

    The U.S. District Court judge in Boston dismissed two claims against Putnam in March 2017 and dismissed other complaints in June 2017 during a bench trial.

    The appeals court reversed the ruling in October 2018, and sent the case back to the District Court. The appeals court said it had rejected two reasons cited by the District Court judge in dismissing the case. Putnam filed its petition to the Supreme Court in January.

    The case had been put on hold by the appeals court, pending the outcome of Putnam's petition to the Supreme Court. It will now return to the U.S. District Court with the appeals court's instructions to follow guidelines requiring Putnam to disprove the loss.

    Related Articles
    U.S. government sides with plaintiff in Putnam ERISA case
    Putnam Investments asks Supreme Court to rule on loss causation case
    High court asked to settle question of loss causation
    Recommended for You
    ONLINE_180209828_AR_0_FRAQWKTPAVZW.jpg
    Former employees sue MITRE for alleged ERISA violations
    Walgreens-main_i.jpg
    Walgreens settles shareholder lawsuit for $105 million
    ONLINE_180539987_AR_0_AJVEYGQPKZAX.jpg
    Federal judge dismisses ERISA complaint against Olin
    SPDR® ETF’s New Approach to Bond Liquidity
    Sponsored Content: SPDR® ETF’s New Approach to Bond Liquidity

    Reader Poll

    June 6, 2022
    SEE MORE POLLS >
    Sponsored
    White Papers
    Nearing the finish line: Ideas on end-state investing for corporate DB plans
    The Meaning of "Portfolio Intelligence"
    Credit Indices: Closing the Fixed Income Evolutionary Gap
    Forever in Style: Benchmarking with the Morningstar® Broad Style Indexes℠
    Crossroads: Politics, Inflation, & Bonds
    Is there a mid-cap gap in your DC plan?
    View More
    Sponsored Content
    Partner Content
    The Industrialization of ESG Investment
    For institutional investors, ETFs can make meeting liquidity needs easier
    Gold: the most effective commodity investment
    2021 Investment Outlook | Investing Beyond the Pandemic: A Reset for Portfolios
    Ten ways retirement plan professionals add value to plan sponsors
    Gold: an efficient hedge
    View More
    E-MAIL NEWSLETTERS

    Sign up and get the best of News delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    Subscribe Today
    June 20, 2022 page one

    Get access to the news, research and analysis of events affecting the retirement and institutional money management businesses from a worldwide network of reporters and editors.

    Subscribe
    Connect With Us
    • RSS
    • Twitter
    • Facebook
    • LinkedIn

    Our Mission

    To consistently deliver news, research and analysis to the executives who manage the flow of funds in the institutional investment market.

    About Us

    Main Office
    685 Third Avenue
    Tenth Floor
    New York, NY 10017-4036

    Chicago Office
    130 E. Randolph St.
    Suite 3200
    Chicago, IL 60601

    Contact Us

    Careers at Crain

    About Pensions & Investments

     

    Advertising
    • Media Kit
    • P&I Content Solutions
    • P&I Careers | Post a Job
    • Reprints & Permissions
    Resources
    • Subscribe
    • Newsletters
    • FAQ
    • P&I Research Center
    • Site map
    • Staff Directory
    Legal
    • Privacy Policy
    • Terms and Conditions
    • Privacy Request
    Pensions & Investments
    Copyright © 1996-2022. Crain Communications, Inc. All Rights Reserved.
    • Topics
      • Alternatives
      • Consultants
      • Coronavirus
      • Courts
      • Defined Contribution
      • ESG
      • ETFs
      • Hedge Funds
      • Industry Voices
      • Investing
      • Money Management
      • Opinion
      • Partner Content
      • Pension Funds
      • Private Equity
      • Real Estate
      • Russia-Ukraine War
      • SECURE Act 2.0
      • Special Reports
      • White Papers
    • Rankings & Awards
      • 1,000 Largest Retirement Plans
      • Top-Performing Managers
      • Largest Money Managers
      • DC Money Managers
      • DC Record Keepers
      • Largest Hedge Fund Managers
      • World's Largest Retirement Funds
      • Best Places to Work in Money Management
      • Excellence & Innovation Awards
      • WPS Innovation Awards
      • Eddy Awards
    • ETFs
      • Latest ETF News
      • Fund Screener
      • Education Center
      • Equities
      • Fixed Income
      • Commodities
      • Actively Managed
      • Alternatives
      • ESG Rated
    • ESG
      • Latest ESG News
      • The Institutional Investor’s Guide to ESG Investing
      • ESG Sustainability - Gaining Momentum
      • Climate Change: The Inescapable Opportunity
      • Impact Investing
      • 2022 ESG Investing Conference
      • ESG Rated ETFs
    • Defined Contribution
      • Latest DC News
      • DC Money Manager Rankings
      • DC Record Keeper Rankings
      • Innovations in DC
      • Trends in DC: Focus on Retirement Income
      • 2022 Defined Contribution East Conference
      • 2022 DC Investment Lineup Conference
    • Searches & Hires
      • Latest Searches & Hires News
      • Searches & Hires Database
      • RFPs
    • Performance Data
      • P&I Research Center
      • Earnings Tracker
      • Endowment Returns Tracker
      • Corporate Pension Contribution Tracker
      • Pension Fund Returns Tracker
      • Pension Risk Transfer Database
      • Future of Investments Research Series
      • Charts & Infographics
      • Polls
    • Careers
    • Events
      • View All Conferences
      • View All Webinars
      • 2022 Retirement Income Conference
      • 2022 Managing Pension Risk & Liabilities
      • 2022 WorldPensionSummit