Apparent authority is the power of an agent to act on behalf of a principal, even though not expressly or impliedly granted. This power arises only if a third party reasonably infers, from the principal's conduct, that the princip
When someone has a fiduciary duty to someone else, the person with the duty must act in a way that will benefit someone else financially.
Whether allegations that an employer 403(b) retirement plan charged excessive fees when lower cost investment products and services were available are sufficient to bring a claim for a breach of fiduciary duty under ERISA?
This case asks the Supreme Court to determine the standard to bring a claim that applies to a breach of fiduciary duty under the Employment Retirement Income Security Act (“ERISA”) for allegations of excessive investment fees and recordkeeping fees. April Hughes and other employees at Northwestern University brought suit, claiming Northwestern’s breach of fiduciary duty in ERISA retirement plans, pointing to a large investment option menu and higher-than-average fees. In particular, petitioner April Hughes and others argue that an ERISA’s fiduciary duty of care stems from trust law, and that Northwestern’s imprudent investment and recordkeeping decisions caused excessive fees and breached their duty of care. Respondent Northwestern University answers that context-specific scrutiny is the proper standard for fiduciary duty under ERISA, and that its plan’s cost reflects its prudent investment and recordkeeping decisions. The outcome of this case will impact those people that participate in savings programs that are offered by their employers and the employers themselves, as well the fiduciary duties of said employers, the rights of the beneficiaries, and the available investment options of the beneficiaries.
Whether allegations that a defined-contribution retirement plan paid or charged its participants fees that substantially exceeded fees for alternative available investment products or services are sufficient to state a claim against plan fiduciaries for breach of the duty of prudence under the Employee Retirement Income Security Act of 1974?
April Hughes, Laura Divane, and others (collectively referred to as “Hughes”), employees at Northwestern University (“Northwestern”), entered into defined contribution plans, administered and developed by their employer Northwestern, under the Employee Retirement Income Security Act (“ERISA”). Divane, et al. v. Northwestern University, et al. at 983.
Do general allegations that disclosure of fraud is always inevitable and that disclosure sooner rather than later is always more prudent satisfy the pleading standard articulated in Fifth Third Bancorp v. Dudenhoeffer?
This case asks the Supreme Court to decide whether general allegations that disclosure of fraud is always inevitable and that disclosure sooner rather than later is always more prudent satisfy the “more harm than good” pleading standard of Fifth Third Bancorp v. Dudenhoeffer. The Retirement Plans Committee of IBM argues that a rule that disclosure sooner rather than later is always prudent is too broad and will result in liability in cases in which fiduciaries did not disclose information as soon as possible, but nonetheless acted prudently. In contrast, Jander asserts that Employee Stock Ownership Plan (ESOP) fiduciaries should not be held to a different standard of prudence than all other ERISA fiduciaries, and that raising the pleading standard would make the standard impossible to meet. The outcome of this case will affect companies’ ability to provide ESOPs to their employees and employees’ access to ESOPs. This case will also have important implications for the stability and protection of employees’ retirement benefits.
Whether Fifth Third Bancorp v. Dudenhoeffer’s “more harm than good” pleading standard can be satisfied by generalized allegations that the harm of an inevitable disclosure of an alleged fraud generally increases over time.
IBM, a global information technology company, provides its employees with the opportunity t
Does making a gift of confidential information to a close family member or friend for non-corporate purposes satisfy the “personal-benefit” test to establish insider trading or must the government show that the insider received a “personal benefit” that was monetary in nature?
The Supreme Court will determine whether a close family relationship between the insider and tippee shows “personal benefit” necessary to establish insider trading. Petitioner Bassam Salman argues that a casual or social friendship does not prove personal benefit but, rather, proof of personal benefit requires a showing of monetary gain by the tipper. The United States contends that a tipper personally benefits by giving a gift of information to a family member or friend, rendering proof of monetary gain by the tipper unnecessary. The United States maintains that a tipper breaches his fiduciary duty to shareholders whenever he discloses non-public corporate information for non-corporate purposes. The Court’s decision in this case may have a substantial impact on the scope of SEC’s authority to enforce securities-fraud laws in case of tipping and consequently influence investors’ interests and their confidence in securities markets.
Does the personal benefit to the insider that is necessary to establish insider trading under Dirks v. SEC require proof of “an exchange that is objective, consequential, and represents at least a potential gain of a pecuniary or similarly valuable nature,” as the Second Circuit held in United States v. Newman, or is it enough that the insider and the tippee shared a close family relationship, as the Ninth Circuit held in this case?
On September 1, 2011, Bassam Yacoub Salman was indicted for his involvement in an insider trading scheme involving members of his extended family. United States v. Salman, 792 F.3d 1, 3–7 (9th Cir. 2015). Specifically, the government charged Salman with conspiracy to commit securities fraud. Id. at 3.
Does ERISA time-bar claims brought against fiduciaries (for a breach of the duty of prudence) if the initial breach occurred more than six years before filing, but allegedly harmed the beneficiaries within the last six years?
In this case, the Supreme Court will determine whether the ERISA’s six-year filing window prohibits a claim that 401(k) plan fiduciaries breached their duty of prudence by offering higher-cost mutual funds to plan participants, despite identical lower-cost mutual funds being available, when fiduciaries initially chose the higher-cost mutual funds more than six years before the claim was filed. A group of employee-beneficiaries argue that plan fiduciaries have an “ongoing” duty of prudence under ERISA and the failure to remove an imprudent investment gives rise to a new six-year period. Edison International, the employer, counters that case should be dismissed because the record does not reflect the question that the Court granted certiorari for; or, in the alternative, that the judgment below should be affirmed because there is no reversible error. The resolution of this case could have implications concerning the future cost of ERISA-governed benefits plan, and the scope of fiduciary duties.
Whether a claim that ERISA plan fiduciaries breached their duty of prudence by offering higher-cost retail-class mutual funds to plan participants, even though identical lower-cost institution-class mutual funds were available, is barred by 29 U.S.C. § 1113(1) when fiduciaries initially chose the higher-cost mutual funds as plan investments more than six years before the claim was filed?
Respondent Edison International (“Edison”) is a holding company with interests in electrical utilities and other energy concerns, with a full-time workforce of over 14,000 employees. Tibble v. Edison Int’l, 711 F. 3d. 1061, 1066 (9th Cir. 2013); Facts at a Glance, Edison International (last visited Feb.
The authors would like to thank Professor Robert Hockett for his support with this preview.
Does the Supreme Court's 2003 ruling in this case necessarily preclude the parties from raising the arguments advanced in this appeal?
If not, did the Secretary of the Interior's approval of the Navajo Nation's 1987 mineral lease amendment violate a common-law fiduciary duty that gives rise to an actionable claim for damages?
In 1964, pursuant to the Indian Mineral Leasing Act of 1938, the Navajo Nation entered into an agreement with a third party to lease a substantial portion of Navajo land for coal mining activities. In 1984, pursuant to the terms of the lease, the Nation sought the assistance of the Secretary of the Interior to renegotiate the royalty rate allotted in the lease to comport with changed market conditions. After a series of negotiations, in 1987 the Nation agreed to-and the Secretary of the Interior approved-a series of amendments to the original lease. In 1993, the Nation initiated proceedings in the Court of Federal Claims alleging that the Secretary had been improperly influenced by the coal company, and as a result, had breached his fiduciary duty to the Nation when he approved the 1987 lease amendments. After a series of appeals, in 2003, the Supreme Court held the Indian Mineral Leasing Act of 1938 did not create an actionable claim for breach of fiduciary duty against the United States. On remand, the Federal Circuit read the Supreme Court's decision narrowly, and held that the Nation's claim was nonetheless actionable based on a common law fiduciary duty arising from the network of statutes and regulations defining the relationship between the Navajo Nation and the United States.
The Indian Mineral Leasing Act of 1938 (IMLA), 25 U.S.C. 396a et seq., and its implementing regulations authorize Indian Tribes, with the approval of the Secretary of the Interior, to lease tribal lands for mining purposes. In a previous decision in this case, United States v. Navajo Nation, 537 U.S. 488 (2003) (Navajo), this Court held that the Secretary's actions in connection with Indian mineral lease amendments containing increased royalty rates negotiated by the Navajo Nation did not breach a fiduciary duty found in IMLA or other relevant statutes or regulations. The court of appeals held on remand that the Secretary's conduct breached duties linked to sources of law that had been briefed to this Court but not expressly discussed in Navajo. The questions presented are:
1. Whether the court of appeals' holding that the United States breached fiduciary duties in connection with the Navajo coal lease amendments is foreclosed by Navajo.
2. If Navajo did not foreclose the question, whether the court of appeals properly held that the United States is liable as a matter of law to the Navajo Nation for up to $600 million for the Secretary's actions in connection with his approval of amendments to an Indian mineral lease based on several statutes that do not address royalty rates in tribal leases and common-law principles not embodied in a governing statute or regulation.
The Navajo reservation is the largest Indian reservation in the United States. See Navajo Nation v. United States ("Navajo VI"), 501 F.3d 1327, 1330 (Fed. Cir. 2007). The Navajo Nation's ("the Nation's") reservation lands contain a vast amount of coal, which is held in trust for the Nation by the federal government. See id.
