Second Circuit Throws Potential Lifeline to ERISA Stock-Drop Lawsuits

The Investment Lawyer

Vol. 26, No. 4 | April 2019

In this article, Nicholas Wamsley discusses the recent decision out of the U.S. Court of Appeals for the Second Circuit in Jander v. Retirement Plans Committee of IBM, in which the Second Circuit advanced a claim beyond the motion to dismiss stage, reversing the district court's dismissal and breaking with the position taken by nearly all federal courts since the Supreme Court's 2014 decision in Fifth Third Bancorp v. Dudenhoeffer and subsequent reaffirmation in Amgen Inc. v. Harris. In the article, Wamsley explores how the plaintiffs cleared the "alternative action" plead­ing hurdle, next steps in the litigation, and what questions remain. "As an initial matter, the Jander opinion only addresses the motion to dismiss stage, so the evidence plaintiffs would need to prevail at sum­mary judgment or trial could be challenging. Beyond that, the Second Circuit's opinion leaves open many issues with respect to the pleading standard. In fact, the Second Circuit chose not to reach perhaps the most significant issue: the actual language of the standard," Wamsley wrote.