Tuesday, January 19, 2010
I have written previously about the Seventh Circuit's controversial decision in the Hecker case. The court found that providing a very expansive list of mutual funds for 401k participants, satisfied the plan administrator/employer's duty of fiduciary care to plan participants. I first co-wrote an amicus brief with William Birdthistle (Chicago-Kent) when the case was on petition for rehearing en banc with the Seventh Circuit, asking the court to reconsider. When they didn't, I also more recently added my name to a law professors amicus brief asking the Supreme Court to reconsider this issue on cert.
But, alas, it shall not be. The Court today denied cert in Hecker v. Deere & Co., U.S., No. 09-447, cert. denied 1/19/10, and so we are left with a troubling precedent in the ERISA excessive fees class action area. The denial of cert. was surprising both because the Court accepted cert. in an ERISA attorneys fees case just this past Friday, and as BNA Daily Labor Report put it, "the case has spawned a large-scale debate among Employee Retirement Income Security Act practitioners, fiduciaries, and academics over the fiduciary responsibilities tied to the investment choices made for 401(k) plans."
In addition to the law prof amicus I joined, other amicus brief were filed in Hecker by AARP, the Consumer Federation of America, Fund Democracy, the National Senior Citizens Law Center, the Pension Rights Center, two professional independent fiduciaries, a financial consultant, and an ERISA compliance officer.