SCOTUS Opinion: Beneficiaries Receiving Full Benefits Have No Standing To Challenge ERISA Plan Governance

U.S. Bank maintains a retirement plan for its employees. Two of those beneficiaries, who had retired, were entitled to a fixed payment each month, and received every such payment. Regardless, they sued their former employer under the Employee Retirement Income Security Act of 1974, arguing that the plan had been mismanaged and should be re-payed about $750 million. The Eighth Circuit dismissed the case, holding that the beneficiaries had no Article III standing.

The Court, in a 5-4 opinion by Justice Kavanaugh, affirmed, holding that since the beneficiaries received their defined benefits, they had not “suffered an injury in fact” entitling them to relief. The majority also observed that, as defined benefit beneficiaries, the petitioners had no equitable or property interest in the plan in itself to provide standing. The Court also noted that petitioners had not argued that mismanagement was so egregious as to risk future nonpayment of their benefits. Justice Thomas, joined by Justice Gorsuch, filed a concurrence arguing that prior precedent regarding trusts unnecessarily complicate standing analysis for ERISA actions and should no longer be used. Justice Sotomayor, joined by Justices Ginsburg, Breyer, and Kagan, dissented, arguing that the beneficiaries’ interest in the plan’s integrity, and risk of future nonpayment, provided standing, along with the notion that the beneficiaries could sue on behalf of the plan itself, which was injured.

A link to the opinion in Thole v. U.S. Bank, N.A. is here: