Fifth Third Bancorp v. Dudenhoeffer
Holding
When a decision by a fiduciary of an "employee stock ownership plan" (ESOP) to buy or hold the employer"s stock is challenged in court, the fiduciary is not entitled to a "presumption of prudence." Instead, ESOP fiduciaries are subject to the same duty of prudence that applies to Employee Retirement Income Security Act (ERISA) fiduciaries in general, except that they need not diversify the fund's assets.
Judgment
Vacated and remanded, 9-0, in an opinion by Stephen G. Breyer on Jun 25, 2014.
Issue: Whether the Sixth Circuit erred by holding that respondents were not required to plausibly allege in their complaint that the fiduciaries of an employee stock ownership plan abused their discretion by remaining invested in employer stock, in order to overcome the presumption that their decision to invest in employer stock was reasonable, as required by the Employee Retirement Income Security Act of 1974, 29 U.S.C. §” 1101 et seq. (“ERISA”), and every other circuit to address the issue.
Recommended Citation: Fifth Third Bancorp v. Dudenhoeffer, SCOTUSblog, https://www.scotusblog.com/cases/third-fifth-bancorp-v-dudenhoeffer/