WASHINGTON – The Pension Rights Center is pleased by today’s decision by the Supreme Court in LaRue v. DeWolff, Boberg & Associates, Inc. The Center, the nation’s only consumer organization dedicated solely to protecting and promoting the pension rights of workers, had filed an amicus brief in support of the plaintiff, James LaRue. Former Labor Department Associate Solicitor Marc Machiz, now with Cohen, Milstein, Hausfeld & Toll, PLLC, and David Preminger of Rosen, Preminger & Bloom, wrote the brief on behalf of the Center.
“This is a common-sense decision, one that is consistent with the law, and with the realities — and hazards — of today’s retirement savings world,” said Rebecca Davis, staff attorney with the Center. “With today’s ruling, the Supreme Court affirms the right of participants and beneficiaries in 401(k) plans and other defined contribution plans to sue plan trustees whose improper actions caused losses to their individual accounts.”
“The Pension Rights Center had contended that the lower court’s decision flew in the face of Congress’ intent that plan assets be protected from losses caused by mismanagement, regardless of whether only some or all of the plan’s participants were injured by that misconduct,” said Mr. Machiz. “We are gratified that the Court agreed with our position.”
“Our satisfaction with the Court’s decision, however, is tempered by a disturbing concurring opinion from Chief Justice Roberts,” Mr. Machiz continued. “In his opinion, the Chief Justice invites lower courts to consider similar cases under a different section of ERISA – a section that might not allow for appropriate remedies in these types of situations. The Chief Justice’s view might relieve the wrongdoer of responsibility, and potentially require money to be taken from other plan participants to pay for the individual’s loss.”
“If embraced by lower courts, this approach could negate the majority decision,” added Ms. Davis. “Interestingly, Justice Roberts’ argument was not made by the defendants, but by an industry group representing employers.”