Real Knowledge, Fake Knowledge, and the Duty to Inquire: Time Limitations in ERISA Litigation

Posted By Stephen D. Rosenberg In Employee Benefit Plans
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As a brief aside, while I continue to work on my promised blog post on the causation/damages aspect of fiduciary duty litigation in light of the Fourth Circuit’s recent and controversial opinion on the issue in Tatum, I thought I would pass along that my most recent article in the Journal of Pension Benefits has now been published. The article, “Real Knowledge, Fake Knowledge, and the Duty to Inquire: Time Limitations in ERISA Litigation,” discusses the discord in ERISA jurisprudence created by the Supreme Court’s recent decision in Heimeshoff on contractual time limitations on filing ERISA claims. The article is in the Journal of Pension Benefits, Vol. 21, No. 4 (Summer 2014). I don’t yet have the right to publish the article itself, as it is embargoed by the publisher for a time after publication, but I do have a couple of courtesy copies on my desk. Feel free to contact me if you would like a copy and I will send you one.

Administrative Exhaustion, Futility and the Last Refuge of the Scoundrel

Posted By Stephen D. Rosenberg In Benefit Litigation
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When it comes to claims of futility as an explanation for failing to exhaust administrative remedies in pursuing benefits under an ERISA governed plan, I have long summed up my feelings with a pithy rephrasing of Samuel Johnson’s famous line about patriotism, which I have turned into the somewhat flippant comment that “futility is the last refuge of the participant who is not entitled to benefits.” (I also like to use a similar line in insurance coverage litigation when lawyers for policyholders claim without factual support that an insurer has waived a policy term, noting – often to the court – that “waiver is the last refuge of the uninsured”). For those of you who are not especially familiar with the concept of administrative exhaustion in the context of ERISA litigation, ERISA governed plans are required to have certain internal structures for processing claims for benefits filed by participants and appeals by those participants of decisions to deny benefits under the plan. Only after those processes are concluded can a participant properly go into court and sue for benefits under the plan; if a participant goes to court without first having pursued those opportunities with the plan itself, then the participant’s claim is supposed to be dismissed for failure to exhaust the administrative remedies that were available to the participant within the plan itself.

The obligation on the part of participants to exhaust plan remedies before filing suit is stringently applied by the courts, and, naturally, in the way that physics teaches that for every action there is an equal and opposite reaction, lawyers representing participants have developed certain arguments around the application of that rule. One of those is the concept of futility, or the idea that a participant should not have to exhaust administrative remedies if the plan was clearly going to deny the requested benefits, thus making the pursuit of those administrative remedies a futile act. The law, it is said, does not require futile and wasteful action, and thus does not require a participant to pursue all avenues to collect benefits that a plan may grant if there is no question the plan administrator will never award those benefits.

Futile, in this circumstance, really means futile, however. It does not mean the plan administrator was unlikely to grant the benefits, nor does it mean that the participant believed it was futile to seek benefits. Instead, it means that the evidentiary record must establish to the satisfaction of the court that, in fact, there was no possibility the benefits would ever be awarded, no matter what information was provided to the plan and its administrator. Rob Hoskins, on his excellent ERISABoard.com, has a summary of a new decision out of the Southern District of West Virginia that emphasizes this exact point, with the Court finding that the participants did not submit enough evidence to allow the Court to actually find that benefits would not be awarded under any circumstances and that the failure to exhaust administrative remedies could not be excused away by claims of futility. This was the case even though at least one of the plaintiffs had allegedly been directly told that benefits would not be awarded even if a claim for benefits was submitted.

The case nicely highlights how high the bar is to prove futility in this context, and raises the question of what then would be enough to prove futility. Many lawyers often find that a hard question to answer, for the specific reason that most lawyers have never actually had a case in which the opportunity to recover benefits voluntarily from a plan was so futile that, in fact, futility could be proven for these purposes. When I say this, I do not mean to mock the lawyers themselves, but mean simply to point out how rare it is to see a circumstance in which the facts actually bear out a claim of futility in this context.

For myself, though, I can answer the question, and I usually do so by reference to a case I handled in which the plan administrator had used multiple ancillary proceedings and disputes to make clear that, under no circumstance, was the participant ever going to be paid the benefits in question. The ancillary disputes concerned related workplace agreements, including a non-competition provision, that perfectly paralleled the terms that had to be satisfied in the benefit plan for benefits to be awarded. Thus, as a factual matter, the decisions on the ancillary disputes pre-ordained what the decision would be from the plan administrator with regard to any claim for benefits under the ERISA governed plan in question. This fact pattern is what a valid claim of futility in response to a defense of failure to exhaust plan remedies looks like, and it illustrates how high the bar is to successfully press such a claim.
 

Tatum v. RJR Pension Investment Committee: What it Teaches About Fiduciary Obligations

Posted By Stephen D. Rosenberg In 401(k) Plans , Class Actions , ERISA Statutory Provisions , ESOP , Employee Benefit Plans , Fiduciaries
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Somehow, RJR Nabisco has always been fascinating, from beginning to now. There must be something about combining tobacco and Oreos that gets the imagination flowing; maybe its the combination of the country’s most regulated consumer product with the wonders of possibly the world’s favorite cookie. Heck, its birth even birthed a book and then, in turn, a movie starring James Garner, whose mannerisms, in the guise of Jim Rockford, are imbedded to at least a slight degree in the personality of every male my age. Ever watch a late forties/early fiftyish lawyer try a case in front of a jury? Watch closely, and you will see at least a little Rockford in the persona.

Now, in the guise of a Fourth Circuit decision over breaches of fiduciary duty involving company stock funds, RJR Nabisco has become a touchstone for ERISA litigators as well. There are a number of takeaways and points of interest in the decision, which you can find here, and the decision has generated no small number of thoughtful commentaries over the past few weeks, some of which you can find here, here, here and here. Without repeating the yeoman’s work that others have already done summing up the case, I am going to run a couple of posts with my thoughts on two key aspects of the case.

Today, I wanted to address the question of the finding of a breach of fiduciary obligations, and I will, lord wiling and the creek don’t rise, follow that up with a post on the question of proving loss as a result of the breach. These are two interrelated issues in fiduciary duty litigation, and Tatum v. RJR  has some interesting things to say, and to teach, about both.

Initially, as everyone knows, you cannot have a breach of fiduciary duty recovery without a breach of fiduciary duty. Here, the Court found a breach of fiduciary duty on the basis of the defendants’ quick and informal decision concerning whether to continue to offer company stock that was based as much as anything on myths and legends about holding company stock in a plan as it was on any type of a reasoned approach to the question. Concerned about the possible liability exposure under ERISA for holding an undiversified single company stock fund in a plan, a working group decided to eliminate the fund without actual investigation into the legal, factual, potential liability or other aspects of holding the fund. Further, they did so in a short meeting, without ever gathering any of the detailed information that would be relevant to making such a determination.

There is a real and important lesson here with regard to the manner of making any decisions with regard to plan investment options, and an additional one that is of particular significance with regard to a decision to eliminate an investment option, which was the event in RJR Nabisco that triggered potential liability. The general lesson is that the days of fly by the seat of your pants management of plan investment options are over (if they ever existed; people may have been doing it that way, but it was probably never legally appropriate to do so). Instead, a failure to properly investigate investment options, including using outside expertise to do so, has reached the point where it can essentially be considered a per se breach of fiduciary duty. It may not have that posture in the law, in the sense of pleading and proving it simply establishing the existence of a breach, but that fact pattern, at this point in time (and not simply because of the holding in RJR Nabisco, but because of a number of cases and legal developments leading up to the time of that ruling), will consistently lead to a finding of a breach.

The more specific lesson to think carefully about here is something very interesting, and to some extent ironic. The working group felt obliged to eliminate the investment option because of questions related to the liability issues of holding a non-diversified single company stock fund, but that is not the same question as whether it was in the best interests of the plan participants to hold, or to instead eliminate, that fund. It is the latter question, and not the former question which is primarily one that concerns the risks to the plan sponsor and those charged with running the plan, that is supposed to be at the heart of the decision making process when it comes to these types of issues. Fiduciaries must run a plan – subject to many limitations on that general principal – in the best interest of the plan participants, without regard to their own interests. That, in all areas of the law, is the basic premise and obligation of being a fiduciary. Here, the defendants’ fiduciary breach occurred because they failed to do that: they did not investigate or analyze the issue from the perspective of what was best for the participants but instead from the perspective of the risks to the plan sponsor and its designees (i.e., the fiduciaries).

When thought about that way, the irony becomes apparent. By being overly concerned about the liability risks of keeping the investment option, the defendants created liability exposure by getting rid of the investment option.
 

Notes on DRI's Upcoming Data Breach & Privacy Law Conference

Posted By Stephen D. Rosenberg In Industry News
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It’s not possible to ignore data breach and cyber security issues anymore, even if you want to and even if, as a lawyer, you think it is outside your practice area and instead the responsibility of some other group of lawyers in your firm. I have written before on this blog about the significant importance of these issues to benefit plans and their vendors, as they control more personal financial and identifying data than almost any other entities operating in the United States economy. At this point, you cannot even open up the Wall Street Journal without coming across news of a major data breach or related legislative or industry activity. A couple of years ago I spoke nationally to a major financial and insurance company on the risks and the nature of insurance coverage for them, including under cyber policies (you can find my slides here), and things have simply ratcheted up exponentially since then.

Colleagues of mine at the DRI are hosting DRI's inaugural Data Breach & Privacy Law conference in Chicago on Sept. 11-12, 2014. The conference will cover everything from the Anatomy of a Cyber Attack to the Theories of Civil Liability for a Data Security Breach to the Insurance Coverage Issues Implicated in Data Breach Claims. You can find the brochure and registration materials here.

Of interest to me is the focus on insurance coverage issues, which was also the focus of my earlier talk on the issue of data breaches. It’s interesting to me because, as some of you may know from previous posts and articles or from hearing me speak, my view of insurance coverage law is animated by my more than quarter century experience working with it, going back to the tail end (that’s an insurance coverage pun, get it?) of the asbestos coverage wars and the start up of the environmental coverage wars. When you look back over the history of the field, coverage lawyers – especially on the policyholder side - were able to build huge practices in the ‘80s and ‘90s on the back of those types of big ticket exposures, and many have spent the decades since looking for the next big ticket coverage disputes that could sustain such practices, generally without finding anything comparable. Do you remember Y2K? Policyholder-side coverage lawyers were bulking up – at least in their marketing – in anticipation of a big boom in losses and related coverage disputes, but that boom went bust almost as soon as the calendar flipped. Some, incidentally, who had a long enough history in the industry anticipated that, as I can remember Jerry Oshinksy, who built one of the largest policyholder side practices of the asbestos/environmental coverage era, commenting in 1999 that Y2K would not generate the work driven by that earlier era. Data breach, though, may finally be that new area of liability that generates large amounts of coverage work that coverage lawyers have been waiting for since the Wellington Agreement came into being, the California Coordinated Asbestos Coverage trial ended, and Superfund prosecution wound down, given the scale of the breaches we now see on a regular basis.
 

Did the First Circuit Just Change its Test for Preemption?

Posted By Stephen D. Rosenberg In Preemption
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Or did it just use a clever turn of phrase? More likely the latter, I think, but even if that is the case, it is absolutely a turn of phrase that is useful and important to know for anyone litigating an ERISA preemption issue in the First Circuit.

Historically, courts in the First Circuit have focused on two concepts in deciding whether a state law claim is preempted: (1) whether the state law cause of action seeks to supplement the causes of action available under ERISA itself; and (2) whether the state law claim requires consideration of the ERISA plan to decide the claim or would dictate specific terms or operational procedures for the plan. Two weeks ago, the First Circuit, in the case of Merit Construction Alliance v. City of Quincy, discussed the second concept by, in essence, applying a sliding scale analysis that considered how much impact the state law in question actually had on the ERISA governed plan, finding that too much equals preempted, while too little equals not preempted.

In addressing whether a city ordinance requiring bidders to establish an apprenticeship program was preempted, the First Circuit explained:

ERISA “supersede[s] any and all State laws insofar as they may now or hereafter relate to any employee benefit plan.” 29 U.S.C. § 1144(a). The Supreme Court has distilled the statute's “relate to” language into two independently sufficient alternatives: “a connection with or reference to” an ERISA plan will result in preemption. Shaw, 463 U.S. at 97. . . The battle here, as waged by the parties, focuses on the “connection with” component of the two-sided ERISA preemption calculus. . . .[N]ot every conceivable connection will support preemption. For example, state laws that merely exert an “indirect economic influence” on a plan do “not bind plan administrators to any particular choice” and, thus, do not come within ERISA's preemptive reach. Cal. Div. of Labor Standards Enforcement v. Dillingham Constr., Inc., 519 U.S. 316, 329, 117 S.Ct. 832, 136 L.Ed.2d 791 (1997) (internal quotation marks omitted). On the other hand, “state statutes that ‘mandate[ ] employee benefit structures or their administration’ ... amount[ ] to ‘connection[s] with’ ERISA plans” and are therefore preempted. Id. at 328 (final alteration in original) (quoting Travelers, 514 U.S. at 658). The path from influence to coercion amounts to a continuum and it is not always a simple task to determine where along this continuum a particular state law falls.

The Court then proceeded to analyze where on that continuum the city ordinance fell, for purposes of determining whether or not it was preempted.

I don’t believe this discussion of the continuum was intended to create a new test for preemption or to establish a new standard for analyzing the issue. There has always been an element, in First Circuit preemption analysis, of considering how closely a state law acts upon the operation or terms of an ERISA governed plan, and this discussion of the continuum seems to fit easily within that tradition. Nonetheless, looking at the question of whether a particular claim is preempted by analyzing where it falls on such a continuum is a handy and potentially persuasive manner of addressing the question. Anyone advocating for or against preemption in the First Circuit would be well-served by structuring the argument around where on that continuum the claim in question falls. It is an easy framework for the audience to grasp, while sufficiently malleable to allow a party to argue for a favorable placement on that continuum.
 

Changing Firms, and a Brief Note on the Right of Service Providers to Make a Profit

Posted By Stephen D. Rosenberg In Class Actions , Employee Benefit Plans , Fiduciaries , People are Talking . . .
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So, some of you may have noticed a change on the masthead at the top of this blog, which notes that I am now at the Wagner Law Group , in its Boston office. It has been a pleasure litigating ERISA and business disputes for the past nearly quarter century at the McCormack Firm, but every now and then an old dog needs to do a new trick. More seriously, for the past several years, I have been increasingly called on by clients to assist with DOL investigations and to handle plan deficiencies and other problems, all outside of the litigation context. The Wagner Law Group, with its deep bench and broad expertise in all areas of ERISA governed benefit plans, gives me the opportunity to provide those services more extensively to my clients, while continuing my litigation practice, which is heavily oriented towards breach of fiduciary duty and other ERISA disputes. So not only was the timing right, but so is the fit.

If you want more information on my changing firms, you can find the press release on my joining the Wagner Law Firm here. When I read it myself for the first time, I immediately thought of a line a U.S. Senator I once heard speak liked to use immediately after being glowingly introduced, which was: “thanks for the kind introduction, which my father would have appreciated and my mother would have believed.”

With that out of the way, I wanted to turn to one brief, substantive discussion. Eric Berkman has a fine article out in Massachusetts Lawyers Weekly, in which he quotes me on the First Circuit’s decision in Merriman v. Unum Life, which rejected claims that a retained asset account structure for paying life insurance benefits under an ERISA governed plan violated ERISA. In one of my quotes, I explained that:

"The plaintiffs' bar is looking for ways defendants are making money or making these services profitable and calling them prohibited transactions or breaches of fiduciary duty," Rosenberg said. "But this case, which falls in line with cases in other contexts, is saying that as long as the plan beneficiary is getting everything he or she is supposed to be getting under the plan, it's OK that the insurance company or other service provider is also making a profit."

While there are a lot of technical issues to Merriman, I think this is the important takeaway if one is looking at the forest rather than the trees. Across the benefit industry, service providers have to turn a profit; if they don’t, we will quickly not have a benefit industry. The holdings in cases like Merriman, which found the payment structure appropriate even though it could create some additional profit for the insurer, drive home the point that, so long as there is no prohibited transaction or misuse of plan assets or other illegal behavior, its okay for service providers and insurers to turn a profit.
 

Just Finished Speaking to ASPPA on ERISA Litigation, Soon to Speak at ACI's National ERISA Litigation Forum

Posted By Stephen D. Rosenberg In Class Actions , ERISA Seminars and other Resources , Fiduciaries
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So I had a great deal of fun speaking on current events in ERISA litigation to the ASPPA regional conference here in Boston this past Thursday, and my great thanks both to the organizers who invited me and everyone who attended. I am especially grateful to those in the audience, more knowledgeable about the wizarding world of Harry Potter than I, who did not point out that, in trying to compare a malicious (but hypothetical) plan sponsor to an evil but all powerful wizard, I mixed up Dumbledore and Voldemort. Oh well – much better than mixing up the prohibited transaction rules, I suppose.

One of the more interesting discussions that came up during my presentation had to do with recent case law revolving around what are, and what are not, plan assets, and how that issue influences the outcomes of cases (including ones I have litigated over the years). It is worth noting that the First Circuit just issued a very important decision validating certain employee life insurance benefit structures on the basis of just that consideration, in Merrimon v. Unum Life. One of the points I touched on in my talk is that the question of when funds are and are not plan assets for purposes of ERISA is almost certain to be a central aspect of both future litigation and future efforts by plan service providers to insulate themselves from fiduciary liability, given very recent developments in the case law. The new First Circuit decision, Merrimon v. Unum Life, is very noteworthy in this regard, as one can see in it how years of litigation and the appropriateness of a relatively common form of benefit payment structure can come down to, at root, the very basic question of what constitutes plan assets for purposes of ERISA litigation.

With that said, I wanted to turn to another speaking engagement on my calendar, which is the American Conference Institute’s 8th National Forum on ERISA Litigation, on October 27-28 in New York. I will be speaking on “Ethical Issues in ERISA Litigation,” including on one of my favorite issues, the fiduciary exception to the attorney-client privilege, along with Mirick O’Connell’s Joseph Hamilton. The reason I wanted to mention it today is that, through July 24th, a special rate is available for anyone who registers, mentioning my name and this blog. To take advantage of the special rate, you should contact Mr. Joseph Gallagher at the American Conference Institute, at 212-352-3220, extension 5511.

I hate to sound like an infomercial, but if you are planning to attend anyway (or weren’t aware of the conference before but now are interested in attending), it would be silly of me not to pass along this information.
 

What Should Employees Do in Response to Fifth Third Bancorp?

Posted By Stephen D. Rosenberg In ESOP
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The Supreme Court’s decision in Fifth Third Bancorp, concerning the standards for prosecuting stock drop claims involving employer stock held in ERISA governed plans, certainly increased the attention paid to the question of the obligations of plan fiduciaries when it came to the risky holding of employer stock in a plan. But there is a flip side to that focus on the roles and obligations of corporate officers and plan fiduciaries with regard to the propriety of excessive holdings, in risky conditions, of employer stock. You see, I have often written, and I think many others have recognized it as well, that despite the protections granted to plan participants by the fiduciary obligations imposed on those running a plan and by the requirement that the plan be operated consistent with the plan documents, ERISA does not render the plan and its administrators In loco parentis, at least outside of pensions (and even then only to a certain extent), with regard to plan investments, nor does ERISA otherwise absolve participants of having to understand the plan and make sure their accounts hold suitable investments.

I was reminded of this over the weekend, when the Wall Street Journal ran this article (subscription required) about the importance of participants in plans that hold employer stock taking the time to reduce those holdings as a proportion of their investment mix. Sure, the new stock drop rules under Fifth Third make it somewhat more likely that a group of employees in a particular company who lose a large percentage of the value of their holding of employer stock under circumstances where that could have been avoided by better decision making by fiduciaries can sue for, and possibly recover for, losses in employer stock holdings. But the reality is that such recoveries will be few and far between, as the pleadings standards are still strict and only the largest plans with such losses are likely to draw the interest and ire of the class action bar. This means that, for all other plan participants who hold employer stock in their accounts, it is incumbent upon them to remember the doctrine of caveat emptor (two Latin phrases in one Monday morning after only one cup of coffee – pretty good, don’t you think?) and to reduce their exposure to a level commensurate with their tolerance for risk.
 

Why the Supreme Court Got It Right in Fifth Third Bancorp v. Dudenhoeffer

Posted By Stephen D. Rosenberg In ERISA Statutory Provisions , ESOP , Fiduciaries
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So, where do we even begin with Fifth Third Bancorp v. Dudenhoeffer, which is, first, a fascinating decision and, second, one that has already inspired countless stories in both the legal and financial media? I thought I would begin by passing along some of the better commentary I have come across in the wake of the decision, along with a few thoughts of my own.

First of all, the best substantive piece explaining what in the world the decision actually says is this one, from Thomas Clark on the Fiduciary Matters Blog. He does a nice job of explaining what the opinion really held. One of the things that grabbed me right off the bat about his post is that he opened by pointing out that, by the Court’s opinion, “the ‘Moench Presumption’ which has been adopted nearly unanimously by every Circuit Court in the country has been unequivocally rejected.” I appreciated the fact that he pointed out that the presumption had been adopted “nearly universally” by the circuits that have considered it, rather than calling it universally accepted, as I have long been the nitpicker on this, pointing out that the First Circuit has passed on opportunities to adopt the presumption, even though most authors writing on the subject have consistently but wrongly stated that the presumption had been universally accepted by those courts presented with it. Now, though, it turns out to have been universally accepted by all but two courts to have considered it, the First Circuit (as I have written before) and the Supreme Court, but obviously the decision of one of those two not to adopt it matters more than that of the other, by some significant degree of magnitude.

Second, I liked this brief piece by Squire Patton Boggs’ Larisa Vaysman in the Sixth Circuit Appellate Blog, comparing some of the conduct that the opinion could be construed to approve of by a fiduciary to conduct that one might have otherwise slurred as a Ponzi scheme. Substantively, she emphasizes that, under the Court’s holding, to plead an ERISA stock drop claim, “a plaintiff must plausibly allege an alternative action that the defendant could have taken that would have been consistent with the securities laws and that a prudent fiduciary . . . would not have viewed as more likely to harm the fund than help it.” What is interesting about this to me is that I have long considered the Moench presumption, no matter the complex doctrinal discussions that have grown up around it, to reflect a judicial need to find some way to balance fiduciary obligations under ERISA with securities obligations imposed on insiders by the securities laws. The Moench presumption always struck me as too blunt an instrument for those purposes, but that didn’t change the fact that, to me, some way of balancing those sometimes competing interests was necessary. Vaysman’s post highlights the fact that the Supreme Court did not abandon this need to balance the competing interests, but instead imposed a different means of balancing those interests. I think the Supreme Court did a nice job in Fifth Third of imposing that balancing by means of a factual evaluation of the conduct in question, rather than by a presumption, unsupported in ERISA itself, that simply, for all intents and purposes, had effectively barred such claims.

I also liked this financial trade press article, from Pensions & Investments, on the decision, as much as anything for its recognition that the decision drove home the point that “courts should evaluate stock-drop cases ‘through careful, context-sensitive scrutiny of a complaint's allegations,’” rather than by means of a judicially created presumption that cannot be located in the ERISA statute itself. This is, of course, a drum I have always beaten about ERISA litigation and the Moench presumption in particular, which is that it is much more appropriate to delve into the facts to decide whether a case has merit, because the world – and a particular case - can look entirely different on its actual facts than it looks based on judicial assumptions made at the outset of a case, including when judicially created presumptions are applied without first examining the truth of the events at issue. I also liked the author’s emphasis on the fact that the opinion recognizes that the presumption simply had no basis under the statutory language itself.

Blogger - and friend - Susan Mangiero has called me on my promise, made in a prior post about predictions on the outcome of this case, to detail my views, once the decision was in, on whether the Court got it right. As my comments about the articles above probably made clear, I am fond of the decision and think the Court got it just right. They solved a troublesome riddle, which is how to balance the securities law obligations of corporate officers with ERISA’s fiduciary obligations, in a manner that neither distorted the statute – as was the case with the Moench presumption – nor encouraged the filing of stock drop suits against fiduciaries that lacked any basis other than the fact that a stock price had declined.
 

ERISA, the Wisdom of Crowds and the First Hundred Names in the Phonebook

Posted By Stephen D. Rosenberg In ESOP
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The wisdom of the crowd, or something else maybe? Susan Mangiero has a wonderful post on something that I probably should have known existed, but did not: an internet site where lawyers and other voyeurs vote on the outcome of pending Supreme Court cases. As Susan notes, the site includes a prediction on a key ERISA case, Fifth Third Bancorp v. Dudenhoeffer, pending before the Supreme Court. It will be interesting to see whether the wisdom of the crowd can accurately predict the outcome of that case.

But there might be a more interesting question to explore, which stems from William Buckley’s famous line that he would rather be governed by the first 100 people in the phone book than the faculty of Harvard. If the Supreme Court rules in a case like Fifth Third Bancorp to the opposite of that predicted in advance by the crowd, the more interesting question may not concern the accuracy of the crowd’s prediction, but instead who reached the better result: the crowd or the Court? I will tell you what. After the Court issues its decision in Fifth Third Bancorp, if the crowd came down on the other side, I will write a blog post on which one I thought was right: the stand-in for the faculty of Harvard (i.e., the sitting justices) or the stand-in for the first hundred folks in the phone book (i.e. the voting public).