Thole v. U.S. Bank N.A.

Supreme Court of the United States · 1615 · Federal Courts

Federal CourtsArticle III standingERISAstandinginjury in factdefined-benefit planERISAconcrete stake

Facts

James Thole and Sherry Smith are retired participants in U.S. Bank's defined-benefit plan, under which they receive fixed monthly payments that do not fluctuate with the plan's value or fiduciaries' investment decisions. They had received all monthly pension benefits owed so far and were legally and contractually entitled to continue receiving the same payments for life. They sued over alleged fiduciary mismanagement of the plan from 2007 to 2010, seeking about $750 million for the plan, injunctive relief including replacement of fiduciaries, and attorney's fees. Their own monthly benefits, however, would remain the same whether they won or lost.

Issue

Do participants in a defined-benefit pension plan have Article III standing to sue for alleged plan mismanagement under ERISA when they have received all vested benefits owed and the outcome of the suit will not affect their future benefit payments? More specifically, can they establish standing based on trust-law analogies, representative status, ERISA's cause of action, or the argument that otherwise no one will regulate fiduciaries?

Rule

Article III standing requires a plaintiff to show a concrete, particularized, and actual or imminent injury in fact, caused by the defendant, and likely redressable by the requested relief. Participants in a defined-benefit plan who have received all vested benefits and whose future payments will not change based on the suit's outcome lack a concrete stake in a claim for plan mismanagement merely because ERISA authorizes suit, because they analogize themselves to trust beneficiaries, because they purport to sue on the plan's behalf, or because they argue otherwise no one will enforce fiduciary duties.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

Rosa Medina retired from Lakefront Toolworks in Cleveland and receives a fixed monthly pension under the company's defined-benefit plan. She has been paid every benefit due, and the plan terms guarantee the same monthly amount for life regardless of investment performance. Rosa sues the plan's fiduciaries for imprudent investments and seeks restoration of losses to the plan.

Does Rosa have Article III standing?

Explanation. Article III requires a concrete, particularized injury that is likely redressable. Under the majority's rule, a participant in a defined-benefit plan who has received all vested benefits and whose future payments will remain the same whether she wins or loses lacks a concrete stake in the litigation. Because Rosa's fixed pension is unaffected by the suit's outcome, she lacks standing. (Derived from Thole v. U.S. Bank N.A. (1615).)