Hughes v. Northwestern Univ.

Plaintiffs “may allege that a fiduciary breached the duty of prudence by failing to properly monitor investments and remove imprudent ones.” Tibble v. Edison Int’l, 575 U. S. 523, 530 (2015).

Petitioners, participants in Northwestern University’s Retirement and Savings plans for employees, sued Respondents, Northwestern and various administrators.  Petitioners alleged that Respondents failed to adequately monitor and control recordkeeping fees, offered mutual funds and annuities that were too expensive, and offered too many investment offerings.  The trial court granted Respondents’ motion to dismiss.  The Court of Appeals for the Seventh Circuit affirmed on the grounds that Respondents provided an adequate array of investment choices.  On appeal, the Supreme Court vacated, holding that the Seventh Circuit failed to consider the fiduciary duty described in Tibble v. Edison Int’l, 575 U. S. 523 (2015).  In Tibble, the Supreme Court concluded that a “plaintiff may allege that a fiduciary breached the duty of prudence by failing to properly monitor investments and remove imprudent ones.”  Id. at 530.  The Supreme Court concluded that the allegations made by Petitioners “must be considered in light of” Tibble to determine whether Petitioners “stated a plausible claim for relief.”  Due to the Seventh Circuit’s failure to consider Tibble, the Supreme Court vacated the judgment below to allow for a complete reevaluation of the allegations.  VACATED and REMANDED.