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Jed Glickstein is quoted in this article.

Plaintiff-side ERISA attorneys notched a win Monday with the U.S. Supreme Court's decision to revive a proposed class action challenging Northwestern University's handling of its retirement plan, but the unanimous ruling leaves open questions that have attorneys on both sides of the bar wanting more.

By vacating the Seventh Circuit's May 2020 decision, the high court removed a major hurdle to pursuing Employee Retirement Income Security Act cases alleging that employers' mismanagement of retirement plans breached their fiduciary duty. The justices' opinion made clear that the existence of better investment options in a plan doesn't preclude lawsuits over bad ones.

But there's still no clear road map for getting these types of cases past a motion to dismiss, which plaintiff and defense attorneys alike had hoped for when the high court accepted the case. Though it resolved one issue about what it takes to survive a motion to dismiss, the opinion left nearly everything else for the lower courts to interpret. That includes whether Northwestern workers will ultimately prevail on their claims that the university violated ERISA's duty of prudence by including money-losing investments in its 403(b) retirement plan.

"Because you had the same pleading essentially filed in all of these 403(b) cases, this was such a good kind of vehicle to really tee up these issues about, what is it that plaintiffs have to plead? The Supreme Court just didn't really answer that here," said Mayer Brown LLP's Jed Glickstein. Mayer Brown filed an amicus brief on behalf of 18 higher education organizations backing Northwestern.

Glickstein said he viewed the 8-0 opinion mostly as an "unfortunate missed opportunity, because the Supreme Court has several times, sort of, come up to the line of explaining what the duty of prudence would mean in this context, and what it would take to plead a plausible breach of the duty of prudence in this context, and then backed off and said, 'Ultimately, we're going to leave it for the lower courts to decide.'"

The high court remanded the case to the Seventh Circuit. It instructed the lower court to consider workers' claims in the context of fiduciaries' duty to monitor all plan investments and remove ones with excessive fees or poor performance, a line of reasoning laid out in a 2015 decision from the high court in Tibble v. Edison International . But while the high court told the Seventh Circuit to apply that reasoning in the Northwestern case, it didn't give any further guidance about the ultimate outcome.

Still, other attorneys and retirement advocates see immediate benefits from the decision, including Mark Boyko of Bailey & Glasser LLP. Boyko filed an amicus brief in the case on behalf of Samuel Halpern, an adviser to ERISA investment fiduciaries and an expert witness in lawsuits about fiduciary practices and due diligence in retirement plan investments.The amicus brief was in support of the workers suing Northwestern.

"From a risk-controlling perspective, it would make sense for fiduciaries to offer fewer options, and to more equitably share the burden of record-keeping fees" in response to the high court's decision in the case, Boyko said. "And so I would expect those changes to trickle through the system separate from litigation, and that's going to yield benefits to workers and retirees."

William Alvarado Rivera, senior vice president for litigation at the AARP Foundation, also saw the decision as positive overall for retirees, particularly as defined contribution plans continue to overtake traditional defined benefit plans in terms of overall offerings and individual savers encounter more choices and risks.

"Part of the protection for people who don't have the knowledge and sophistication to make those decisions is that the plan has a fiduciary duty to look out for your interests, even if you are ultimately going to have some greater responsibility for the choices that ultimately lead to your retirement savings," Alvarado said.

But there's much left up for interpretation in the wake of the decision. Already, lawyers are zeroing in on one of the final sentences of the opinion authored by Justice Sonia Sotomayor.

"At times, the circumstances facing an ERISA fiduciary will implicate difficult tradeoffs, and courts must give due regard to the range of reasonable judgments a fiduciary may make based on her experience and expertise," Justice Sotomayor said.

Some attorneys likened that line to a warning about the pleading standard to come in these cases. Mayer Brown attorney Glickstein, for example, said he saw that as a "pretty favorable standard for fiduciaries."

That's leading some attorneys to question whether the ultimate conclusion of the case will be somewhat unfavorable to plaintiffs, as some benefits attorneys have concluded was the case in the Supreme Court's 2014 decision in Fifth Third Bancorp v. Dudenhoeffer . In that case, workers accused pension fund managers of mismanaging their employee stock ownership plan.

Significant aspects of the opinion in Dudenhoeffer were beneficial to plaintiffs, including the high court's conclusion that there was no presumption that holdings or offerings of employer stock in ESOPs were prudent unless there was reason to believe a company's survival was in doubt. But interpretation of the Dudenhoeffer decision ultimately resulted in what some attorneys believe is a much more difficult environment for stock-drop ERISA cases overall, even though that presumption was knocked down.

Speaking about the Northwestern decision, Dechert LLP partner Andrew Oringer said that "if where this winds up is that all the fiduciary has to show is that they're within a range of reasonable approaches — which presumably already is the law — then that may be a pretty low bar for the fiduciary."

"Is it possible that this could be a Pyrrhic victory at the end of the day? It was in Dudenhoeffer, and it's possible here," said Oringer, who is a partner in the executive compensation and benefits practice area at his firm.

Boyko said, "I think that that last part of the opinion is really going to dissuade plaintiffs from being overly ambitious," and he is watching to see "how courts choose to apply that last paragraph to the motion dismiss stage."

"I do think we'll have some courts that are going to try to apply that last paragraph at the motion dismiss stage, but I think it's improper for them to do so," Boyko said. "And I think that's going to be a minority of the courts."

On the other hand, he predicted the line will pop up more often in summary judgment motions, "perhaps making it a little more difficult on summary judgment, from the plaintiff's perspective, but easier to get past the motion to dismiss."

Still, Glickstein wasn't convinced that the final line was as significant as some plaintiff-side attorneys have made it out to be, in particular because the court didn't provide any guidelines about the pleading standard like it did in Dudenhoeffer.

"It's just not as structured as it was in Dudenhoeffer. And that's why I think ultimately this may not make a huge amount of difference either way," Glickstein said.