Supreme Court Decision Syllabus (scotus)

Send us a textIn Cunningham v. Cornell University, the Supreme Court addressed a fundamental pleading question under the Employee Retirement Income Security Act of 1974 (ERISA). Petitioners—former and current Cornell University employees—alleged that university fiduciaries violated ERISA §1106(a)(1)(C) by causing their retirement plans to pay excessive fees for recordkeeping services to Fidelity and TIAA-CREF, both parties in interest. The Second Circuit dismissed the claim, holding that plaintiffs must also plead that the transaction wasn’t exempt under §1108(b)(2)(A), which allows for reasonable arrangements with service providers.The Supreme Court unanimously reversed. Writing for the Court, Justice Sotomayor held that §1106(a)(1)(C) sets out a categorical bar against certain transactions between plans and parties in interest, and plaintiffs need only plausibly plead the elements of that section to state a claim. The §1108 exemptions—such as those permitting “reasonable arrangements” for necessary services