The RJR Pension Investment Committee filed a petition to the Supreme Court seeking an overturn of an August 2014 decision by the 4th U.S. Court of Appeals, ruling that a defendant has a burden of proof if there is a breach of duty, and a fiduciary can be held liable for damages even for a prudent decision. Five other circuit courts have ruled differently, placing the burden of proving “loss causation” on the plaintiffs. The Supreme Court has requested the solicitor general’s opinion before deciding whether or not to grant RJR’s petition for review.
The U.S. Chamber of Commerce, in an amicus brief, states that the 4th Circuit Court’s ruling is “unworkable in practice”, as fiduciaries and plan sponsors operating in several states will encounter different rules concerning their own liability for monetary damages.
The case involves the timing of RJR Nabisco Inc.’s sale of company stock within the RJR 401(k) plan after the spin-off of its tobacco business, and the Plan’s investments having been “reset.”
pionline.com, March 9, 2015.