Articles Posted in U.S. Court of Appeals for the Fourth Circuit

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The court affirmed the district court's finding that, under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq., a plan fiduciary's breach did not cause substantial losses to the retirement plan because a prudent fiduciary would have made the same divestment decision at the same time and in the same manner. The district court explained that a prudent fiduciary would have balanced the increased risk of loss that the Nabisco Funds brought to the Plan against the Funds' likely average returns. The court concluded that the district court's findings and analysis entirely accord with the efficient market hypothesis and Fifth Third Bancorp v. Dudenhoeffer. In this case, a prudent fiduciary would have concluded the Nabisco Funds' expected returns did not justify the increased risk of loss to the plan, especially because ERISA requires that a fiduciary diversify plan assets to minimize risk of loss. View "Tatum v. RJR Pension Investment" on Justia Law

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Plaintiff filed suit against his employer, Sears, alleging misrepresentation, constructive fraud, and infliction of emotional distress. Specifically, plaintiff alleged that Sears improperly administered life insurance benefits. The district court dismissed the complaint. Sonoco Prods. Co. v. Physicians Health Plan, Inc. held that section 502(a) of the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1132(a), preempts a state law claim when: the plaintiff has standing, the claim must fail under the scope of an ERISA provision that can enforce via section 502(a), and the claim must not be capable of resolution without an interpretation of the contract governed by federal law. Because plaintiff's claims meets all three prongs of the Sonoco test, the court concluded that ERISA completely preempts his claims. Accordingly, the court affirmed the judgment. View "Prince v. Sears Holdings Corp." on Justia Law