Fifth Third Bancorp v. Dudenhoeffer (573 U.S. 409)
U.S. Supreme Court · decided June 25, 2014 · Supreme Court Database (Spaeth)
- Citation
- 573 U.S. 409 · 134 S. Ct. 2459
- Decided
- June 25, 2014
- Term
- October Term 2013
- Vote
- 9–0
- Majority author
- Justice Breyer
- Issue area
- Economic Activity
- Disposition
- Vacated and remanded
- Outcome
- Petitioning party won
- Ideological direction
- Conservative
Opinion excerpt
Justice BREYER delivered the opinion of the Court. The Employee Retirement Income Security Act of 1974 (ERISA), 88 Stat. 829, as amended, 29 U.S.C. § 1001 et seq., requires the fiduciary of a pension plan to act prudently in managing the plan's assets. § 1104(a)(1)(B). This case focuses upon that duty of prudence as applied to the fiduciary of an "employee stock ownership plan" (ESOP), a type of pension plan that invests primarily in the stock of the company that employs the plan participants. We consider whether, when an ESOP fiduciary's decision to buy or hold the employer's stock is challenged in court, the fiduciary is entitled to a defense-friendly standard that the lower courts have called a "presumption of prudence." The Courts of Appeals that have considered the question have held that such a presumption does apply, with the presumption generally defined as a requirement that the plaintiff make a showing that would not be required in an ordinary duty-of-prudence case, such as that the employer was on the brink of collapse. We hold that no such presumption applies. Instead, ESOP fiduciaries are subject to the same duty of prudence that applies to ERISA fiduciaries in general, except that they need not diversify the fund's assets. § 1104(a)(2). I Petitioner Fifth Third Bancorp, a large financial services firm, maintains for its employees a defined-contribution…
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