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Supreme Court Denies Cert in Citigroup Case Applying 'Moench' Presumption of Prudence by Stock Plan Fiduciaries

Certiorari has been denied with respect to the Second Circuit's decision in the stock drop case of Gray v. Citigroup Inc., which applied the "Moench" presumption of prudence to Citigroup's plan fiduciaries. The issues presented by that case, as described on SCOTUSBlog, were: "(1) Whether, under Section 1104(a)(1)(B) of [ERISA], a fiduciary of a plan that invests in qualified employer securities who knows, or should have known, that it is imprudent to invest in the employer's securities is permitted to take no steps to protect plan participants and beneficiaries unless the employer is in a 'dire situation' or near bankruptcy; and (2) whether, under Section 1104(a)(1)(B), a complaint by a plan participant against a fiduciary of such a plan need only plead facts making plausible the conclusion that the fiduciary failed to act with 'care, skill, prudence, and diligence,' or whether instead the complaint must plead facts making plausible the conclusion that the fiduciary knew, or should have known, that the employer was in a 'dire situation' or near bankruptcy."

Expertise After Chevron: A Potentially Pyrrhic Victory on Executive Control Over Preventive Care

"Justice Brett Kavanaugh's ensuing opinion for the court ... repeatedly emphasized that the secretary's power to hire and fire at will 'provides the Secretary with a means of ensuring that no recommendation that he disapproves will take effect.' The critical question now is thus one about deference to scientific expertise, and how the court now sees that question after overruling Chevron last year. Even as Braidwood gives the secretary such control, will rational, evidence-based decision-making still be required?" [Kennedy v. Braidwood Management, Inc., No. 24-316 (S. Ct. Jun. 27, 2025)]

Following Oral Argument, Supreme Court Calls for New Briefs in HHS Task Force Case

"[At the April 21] oral argument, some justices questioned whether the HHS secretary actually has the power to appoint members of the task force, or at the very least whether the court should reach that issue when the lower court had not yet weighed in on it. [The April 25 order] seeks more information on that issue from both sides, suggesting that the justices continue to be interested in it." [Braidwood Mgmt, Inc. v. Kennedy, No. 23-10326 (5th Cir. Jun. 21, 2024; cert. pet. granted Jan. 10, 2025; oral arg. Apr. 21, 2025)]

Court Appears to Back Legality of HHS Preventative Care Task Force

"The Supreme Court ... appeared to side with the federal government in a dispute over the constitutionality of the structure of ... the U.S. Preventive Services Task Force ... The challengers in the case contend that the group's recommendations are invalid because the members of the task force were not appointed by the president and confirmed by the Senate, but most of the justices seemed skeptical of that argument." [Braidwood Mgmt, Inc. v. Becerra, No. 23-10326 (5th Cir. Jun. 21, 2024; cert. pet. granted Jan. 10, 2025; oral arg. Apr. 21, 2025)]

Supreme Court Clarifies Pleading Rules for Retirement Plan Litigation

"The most important part of the opinion is the last few pages, where [Justice Sotomayor] grapples with the reality that the court has validated a rule that will allow a plaintiff to survive a motion to dismiss merely by alleging that a plan fiduciary has purchased something from an entity from whom it purchases things." [Cunningham v. Cornell Univ., No. 23-1007 (S.Ct. Apr. 17, 2025)]

Administration Notifies SCOTUS of Change in Government's Position on Pending Trans Healthcare Case

"The Trump administration on [February 7] notified the Supreme Court that, in its view, a Tennessee law banning the use of puberty blockers and hormone therapy for transgender minors does not violate the Constitution's guarantee of equal protection.... [A]lthough that position is a change from the one advanced by the Biden administration when the justices heard oral argument in a challenge to the law in December, the Trump administration nonetheless urged the Supreme Court to go ahead and decide the dispute." [U.S. v. Skrmetti, No. 23-5600 (6th Cir. Sep. 28, 2023; cert. pet. granted Jun. 4, 2024, No. 23-477)]

Justices Appear Supportive of Retired Firefighter's Discrimination Suit Over Termination of Retiree Health Benefits

"The Supreme Court on [January 13] appeared sympathetic to a retired Florida firefighter who is seeking to sue her former employer ... Karyn Stanley ... contends that the city violated the law when it changed its policy for subsidizing health insurance for retirees, leaving her to bear the entire cost of her health insurance for 15 years. But some justices questioned whether Stanley's best argument was one that they could consider at all[.]" [Stanley v. City of Sanford, Florida, No. 22-10002 (11th Cir. Oct. 11, 2023; cert. pet granted No. 23-997, Jun. 24, 2024; oral arg. Jan. 13, 2025; transcript and audio available)]

Supreme Court to Hear Retired Firefighter's Bid to Sue Ex-Employer Over Benefits

"In her brief on the merits, Stanley pushes back against the 11th Circuit's contention that she cannot sue because she did not work for the city when her retirement benefits were ended. The ADA, she insists, sweeps broadly to allow lawsuits by 'any person alleging discrimination' in violation of the act who 'claims to be aggrieved.... The Biden administration filed a 'friend of the court' brief supporting Stanley in which it ... contends the ADA also prohibits discrimination in benefits provided to former employees." [Stanley v. City of Sanford, Florida, No. 22-10002 (11th Cir. Oct. 11, 2023; cert. pet granted No. 23-997, Jun. 24, 2024)]

Supreme Court Sides with IRS on Taxation of Shareholders' Life-Insurance Proceeds

"The case presented a routine estate-planning device for those corporations, which commonly purchase life insurance policies on the principal shareholders. With the proceeds of such a policy, the corporation can purchase the shares of a dying shareholder from the shareholder's estate, ensuring that the corporation remains in the hands of the original family.... The problem here is what to do with the value of those life-insurance proceeds, which flow into the corporation immediately after death." [Connelly v. IRS, No. 23-146 (S. Ct. Jun. 6, 2024)]

Supreme Court Will Not Hear Suit Over Arbitration Clauses in ERISA Plans

Issue: Whether a participant in an ERISA plan who asserts statutory claims under that statute can be compelled, pursuant to a binding arbitration provision, to submit his claims to individual arbitration. [Harrison v. Envision Mgmt. Holding, Inc. Bd. of Directors, No. 22-1098 (10th Cir. Feb. 9, 2023; Argent Trust Co. v. Harrison, No. 23-30, cert. denied Oct. 4, 2023)]