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Amgen Inc. v. Harris (US 2016)

Articles Discussing Case:

Supreme Court Rebukes Ninth Circuit’s Disregard of Prudence Precedent for Employee Stock Ownership Plans

Jackson Lewis P.C. • January 28, 2016
Providing a specific, stringent pleading standard for claims alleging breach of the duty of prudence against fiduciaries who manage employee stock ownership plans (ESOPs), the U.S. Supreme Court again has reversed the Ninth Circuit Court of Appeals, in Amgen Inc. v. Harris, No. 15-278 (Jan. 25, 2016), because of its failure to apply the proper pleading standard for such claims.

SUPREME COURT REBUKES NINTH CIRCUIT’S DISREGARD OF PRUDENCE PRECEDENT FOR EMPLOYEE STOCK OWNERSHIP PLANS

Jackson Lewis P.C. • January 26, 2016
For the second time in Amgen Inc. v. Harris, the Supreme Court reversed the Ninth Circuit because of its failure to apply the proper pleading standard for claims alleging breach of the duty of prudence against fiduciaries who manage employee stock ownership plans (ESOPs). The Supreme Court’s opinion sets forth a specific, stringent pleading standard for such claims – though questions remain as to how strictly lower courts will interpret that standard. The opinion also shows that it will be strategically advantageous for defendants to attack claims against ESOP fiduciaries at the pleading stage.