Pfeil v. State Street Bank & Trust Co.
806 F.3d 377
| 6th Cir. | 2015Background
- ERISA ESOP fiduciaries have a prudence duty; ESOPs are designed to invest in employer securities rather than diversify; this suit involves GM's ESOP and State Street's handling of GM stock from 2008–2009; the district court granted summary judgment on presumption-of-prudence grounds; the Sixth Circuit previously adopted a presumption but later followed Dudenhoeffer; the Supreme Court in Dudenhoeffer abrogated the presumption of prudence for ESOP fiduciaries.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is the presumption of prudence applicable after Dudenhoeffer? | Pfeil argues presumption control applies. | State Street argues presumption is abrogated by Dudenhoeffer. | No presumption applies; Dudenhoeffer abrogates it. |
| Are State Street’s actions prudent under a prudent-process standard? | Pfeil contends processes were insufficient to show prudence. | State Street demonstrates a reasoned, thorough investigation. | Yes; State Street's process was prudent, no genuine issue. |
Key Cases Cited
- Dudenhoeffer v. Fifth Third Bancorp, 134 S. Ct. 2459 (U.S. 2014) (abrogated presumption of prudence for ESOP fiduciaries; same standard of prudence applies to all ERISA fiduciaries; ESOP diversification not required)
- Pfeil v. State Street Bank and Trust Co., 671 F.3d 585 (6th Cir. 2012) (presumption of prudence applied only at summary judgment but later overruled by Dudenhoeffer)
- In re Citigroup ERISA Litig., No. 11 CV 7672 JGK, 104 F. Supp. 3d 599 (S.D.N.Y. 2015) (discussed market pricing and special circumstances; supports cautious approach to ESOP claims)
- Hunter v. Caliber Sys., Inc., 220 F.3d 702 (6th Cir. 2000) (prudence involves reasoned, investigative decision-making)
- TibbIe v. Edison Int’l, 135 S. Ct. 1823 (U.S. 2015) (advances prudent-process standard and market considerations)