Amgen Inc. v. Harris

For a claim of breach of a fiduciary's duty of prudence, claimant must allege an alternative action that the fiduciary could have taken that would have been consistent with securities laws and that a prudent fiduciary in the same circumstances would not have viewed as more harmful than helpful.

Respondents filed suit against Petitioner fiduciaries for breach of duty of prudence in managing a retirement portfolio. Supreme court granted certiorari a second time to decide whether the Ninth Circuit’s determination that Respondents stated a claim for breach of duty of prudence was consistent with the court’s decision in Fifth Third Bancorp v. Dudenhoeffer. In that case, the Supreme Court decided that claims for breach of duty of prudence against fiduciaries having inside information, claimant must plausibly allege an alternative action that the fiduciary could have taken that would have been consistent with securities laws and that a prudent fiduciary in the same circumstances would not have viewed as more harmful than helpful. Here, Respondent did not make such an allegation, but the Ninth Circuit reversed the order of the district court to dismiss the claim. The Supreme Court states that the Ninth Circuit failed to correctly evaluate the complaint with the above criteria and again remanded for further proceedings consistent with the opinion.