The Supreme Court last week issued a decision that dramatically alters the ERISA landscape and carries implications for other plaintiffs seeking to vindicate statutory rights.
In Thole v. U.S. Bank N.A., a divided Court ruled that participants in defined-benefit pension plans lacked Article III standing (otherwise known as constitutional standing) to bring suit alleging mismanagement of the fund’s assets. The ERISA statute expressly provides for such suits, but the majority opinion held that the plaintiffs lacked constitutional standing because they had not demonstrated that the mismanagement likely would cause them not to receive their promised benefits. For asset managers reluctant to manage money from defined-benefit plans, amounting to roughly $3.2 trillion in assets nationwide, the decision lowers the risk of facing lawsuits and liability. The decision also represents a further step in the campaign of some of the Court’s members to invoke constitutional standing requirements to bar suits by private plaintiffs even where Congress has expressly conferred statutory standing.
Please click here to read the full alert memorandum.