Plain-English summary
Court: ERISA claim needs only the elements in §1106(a)(1)(C); exemption arguments belong to defendants
The Court unanimously reversed and remanded, holding that to state a prohibited-transaction claim under ERISA §1106(a)(1)(C) a plaintiff need only plausibly plead the elements listed in that provision. Plaintiffs need not anticipate and plead facts negating an ERISA exemption in the complaint.
Why this matters
This ruling lowers the pleading hurdle for participants and beneficiaries who sue over alleged improper transactions involving employee benefit plans. Plaintiffs can survive early dismissal by alleging the prohibited-transaction elements without having to negate statutory exemptions up front. That preserves more claims for discovery and full litigation before courts decide exemption defenses.
Who may feel it
- Participants and beneficiaries in ERISA-covered retirement and welfare plans
- Employers, plan administrators, and plan fiduciaries (including universities and other institutions)
- ERISA defense counsel and plaintiffs’ attorneys
- Courts deciding early dismissal (motion-to-dismiss) rulings in ERISA cases