Term: 2019
Docket: 17-1712
Thole v. U.s. Bank, N.a.
- Pro
17-1712 THOLE V. U.S. BANK, N.A. DECISION BELOW: 873 F.3d 617 IN ADDITION TO THE QUESTIONS PRESENTED BY THE PETITION, THE PARTIES ARE DIRECTED TO BRIEF AND ARGUE THE FOLLOWING QUESTION: WHETHER PETITIONERS HAVE DEMONSTRATED ARTICLE III STANDING. CERT. GRANTED 6/28/2019 QUESTION PRESENTED: This case presents two independent, substantial legal issues that have divided the courts of appeals regarding when an ERISA plan participant may invoke the remedies Congress explicitly authorized to police fiduciary misconduct and protect federally guaranteed benefits. Petitioners are participants in a pension plan managed by respondents. After respondents' fiduciary breaches caused $750 million in losses to the plan, petitioners sued, seeking injunctive relief under 29 U.S.C. 1132(a)(3) and restoration of the plan's losses under 29 U.S.C. 1132(a)(2). The Eighth Circuit affirmed dismissal of both claims because petitioners had not yet suffered any individual financial harm-the plan did not (yet) face a risk of default. In so holding, the Eighth Circuit departed from holdings of other circuits under both Sections 1132(a)(3) and 1132(a)(2), and rejected the long-held position of the Department of Labor, which has repeatedly urged the courts of appeals to let these claims proceed. The questions presented are: 1. May an ERISA plan participant or beneficiary seek injunctive relief against fiduciary misconduct under 29 U.S.C. 1132(a)(3) without demonstrating individual financial loss or the imminent risk thereof? 2. May an ERISA plan participant or beneficiary seek restoration of plan losses caused by fiduciary breach under 29 U.S.C. 1132(a)(2) without demonstrating individual financial loss or the imminent risk thereof? LOWER COURT CASE NUMBER: 16-1928
In Thole v. U.S. Bank, N.A., the plaintiffs were retired participants in a defined-benefit retirement plan managed by U.S. Bank who alleged that the bank had mismanaged funds and caused significant losses to their pension plans, violating its fiduciary duty under the Employee Retirement Income Security Act (ERISA). However, because they continued to receive fixed payments regardless of how well or poorly the fund performed, it was ruled that they lacked standing to sue as they hadn't suffered any actual financial injury. The Supreme Court held in 2019 that beneficiaries of a defined-benefit pension plan do not have standing under Article III of the Constitution or ERISA's civil enforcement provision unless there is an imminent risk that their benefits will be reduced due to mismanagement.
In the dissenting opinion for Thole v. U.S. Bank, N.A., Justice Sonia Sotomayor argued that the majority's decision ignored established principles of trust law and allowed fiduciaries to misuse pension funds without fear of legal consequences. She contended that participants in a defined-benefit plan should have standing to sue if a trustee violates its duties, even if they haven't suffered financial harm yet. According to her, this is because these violations could lead to future losses or affect non-monetary aspects of the plan such as investment strategies or risk levels. Furthermore, she criticized the majority's reliance on ERISA’s guarantee scheme as it does not cover all potential losses and may not be sufficient in case of large-scale mismanagement.
