Alexander Usenko v. MEMC LLC, 926 F.3d 468

SunEdison spun off SunEdison Semiconductor, LLC (Semi) in May 2014; Semi’s employee defined-contribution plan offered SunEdison stock as an investment option and froze new contributions to that fund effective Feb. 1, 2015.
Alexander Usenko held SunEdison stock through the plan; between July 20, 2015 and April 21, 2016, SunEdison publicly reported severe liquidity and debt problems, large losses, delayed filings, and restructuring steps that triggered steep stock declines.
SunEdison’s stock fell from about $31.66 to $0.34 and trading was suspended when SunEdison filed bankruptcy on April 21, 2016, eliminating most participant investment value.
In Aug. 2017 Usenko sued derivatively and as a putative class, alleging Semi, the plan’s investment committee, and committee members breached ERISA fiduciary duties (prudence and co‑fiduciary liability) by failing to remove/diversify away from SunEdison stock between July 20, 2015 and April 21, 2016.
The district court dismissed for failure to state a claim (and dismissed two individual defendants for untimely service); Usenko appealed the Rule 12(b)(6) dismissal and denial of leave to amend.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether fiduciaries breached ERISA duty of prudence by retaining SunEdison stock 7/20/15–4/21/16	Usenko: public reports and stock drops showed SunEdison was imprudent for retirement investors and fiduciaries should have divested	Defendants: Plaintiffs rely only on public information; fiduciaries may reasonably rely on market price absent special circumstances	Dismissed: Allegations mirror Dudenhoeffer and fail to plead special circumstances undermining market price, so prudence claim is implausible
Whether co‑fiduciary liability survives without an underlying breach theory	Usenko: defendants knowingly participated in each other’s breaches	Defendants: co‑fiduciary claim depends on a viable underlying breach	Dismissed: co‑fiduciary claim fails because underlying breach not adequately pleaded
Whether Tibble/continuing‑monitoring theory saves the claim	Usenko: Tibble’s ongoing monitoring duty makes public‑information allegations sufficient	Defendants: Tibble does not escape Dudenhoeffer pleading rules	Held: Tibble does not relax Dudenhoeffer; monitoring duty still must be pleaded consistent with Dudenhoeffer
Whether leave to amend should have been granted	Usenko: sought leave to amend	Defendants: plaintiff did not provide a proposed amended complaint	Denied: amendment denied because plaintiff failed to submit a proposed amended complaint

Braden v. Wal-Mart Stores, Inc., 588 F.3d 585 (8th Cir.) (elements of ERISA breach: fiduciary status, breach, causation)
Dudenhoeffer v. Fifth Third Bancorp, 573 U.S. 409 (2014) (publicly available information generally insufficient to plead ERISA imprudence absent special circumstances)
Tibble v. Edison Int’l, 135 S. Ct. 1823 (2015) (continuing duty to monitor plan investments)
Ashcroft v. Iqbal, 556 U.S. 662 (2009) (plausibility pleading standard)
Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (pleading must be plausible, not merely speculative)
Singh v. RadioShack Corp., 882 F.3d 137 (5th Cir.) (Tibble does not excuse Dudenhoeffer pleading requirements)
Rinehart v. Lehman Bros. Holding Inc., 817 F.3d 56 (2d Cir.) (dismissing ERISA claim based on public information foreshadowing company collapse)