Everything you need to know about ranked-choice voting in one spot. Click to learn more!

Cunningham v. Cornell University

From Ballotpedia
Jump to: navigation, search


Supreme Court of the United States
Cunningham v. Cornell University
Term: 2024
Important Dates
Argued: January 22, 2025
Decided: April 17, 2025
Outcome
reversed
Vote
9-0
Majority
Chief Justice John Roberts • Clarence Thomas • Samuel Alito • Sonia Sotomayor • Elena Kagan • Neil Gorsuch • Brett Kavanaugh • Amy Coney Barrett • Ketanji Brown Jackson
Concurring
Samuel Alito • Clarence Thomas • Brett Kavanaugh

Cunningham v. Cornell University is a case that was decided by the Supreme Court of the United States on April 17, 2025, during the court's October 2024-2025 term. The case was argued before the Supreme Court of the United States on January 22, 2025.

In a 9-0 opinion, the court reversed the judgment of the United States Court of Appeals for the Second Circuit, holding that plaintiffs making a §1106(a)(1)(C) claim must only plausibly allege that a plan fiduciary, its manager, engaged in a prohibited transaction. Justice Sonia Sotomayor delivered the opinion of the court.[1]

HIGHLIGHTS
  • The issue: The case concerned whether the respondent violated the Employee Retirement Income Security Act (ERISA), as claimed by the plaintiff. Click here to learn more about the case's background.
  • The questions presented: "Whether a plaintiff can state a claim by alleging that a plan fiduciary engaged in a transaction constituting a furnishing of goods, services, or facilities between the plan and a party in interest, as proscribed by 29 U.S.C. § 1106(a)(l)(C), or whether a plaintiff must plead and prove additional elements and facts not contained in the provision's text."[2]
  • The outcome: In a 9-0 opinion, the court reversed the judgment of the United States Court of Appeals for the Second Circuit.[1]


    • The case came on a writ of certiorari to the United States Court of Appeals for the Second Circuit. To review the lower court's opinion, click here.

    Background

    Case summary

    The following are the parties to this case:[3]

    • Petitioner: Casey Cunningham
      • Legal counsel: Xiao Wang (University of Virginia School of Law)
    • Respondent: Cornell University
      • Legal counsel: Nicole A. Saharsky (Mayer Brown LLP), Nancy G. Ross (Mayer Brown LLP), Michael Anthony Scodro (Mayer Brown LLP)

    The following summary of the case was published by Oyez, a free law project from Cornell’s Legal Information Institute, Justia, and the Chicago-Kent College of Law:[4]

    “ Cornell University administered two retirement plans for its employees: the Retirement Plan and the TDA Plan. As of 2016, these defined-contribution plans had over 30,000 participants and nearly $3.4 billion in combined net assets. Cornell delegated administrative responsibilities to its Vice President for Human Resources and established the Retirement Plan Oversight Committee (RPOC) to oversee the plans. The plans offered approximately 300 investment options and incurred investment management and recordkeeping fees, with TIAA-CREF and Fidelity Investments serving as both investment providers and recordkeepers.


    Plaintiffs, representing a class of plan beneficiaries, sued Cornell and its appointed fiduciaries in federal district court, alleging violations of the Employee Retirement Income Security Act (ERISA), including failure to adequately monitor the plans, resulting in the retention of underperforming investment options and excessive fees, as well as engaging in prohibited transactions under 29 U.S.C. § 1106. The district court dismissed or granted summary judgment to the defendants on most claims, and the parties reached a settlement on the remaining claim before the court entered final judgment. The plaintiffs challenged the district court’s award of summary judgment on two counts, but the U.S. Court of Appeals for the Second Circuit affirmed the lower court.[5]

    		”

    To learn more about this case, see the following:

    Timeline

    The following timeline details key events in this case:

    Questions presented

    The petitioner presented the following questions to the court:[2]

    Questions presented:
    “ Whether a plaintiff can state a claim by alleging that a plan fiduciary engaged in a transaction constituting a furnishing of goods, services, or facilities between the plan and a party in interest, as proscribed by 29 U.S.C. § 1106(a)(l)(C), or whether a plaintiff must plead and prove additional elements and facts not contained in the provision's text.[5] ”

    Oral argument

    Audio

    Audio of oral argument:[7]




    Transcript

    Transcript of oral argument:[8]

    Outcome

    Casey Cunningham sued the university, claiming it violated the Employee Retirement Income Security Act (ERISA) by failing to adequately monitor their employees’ defined contribution plans, which resulted in underperforming investment options and excessive fees. Cunningham also alleged that Cornell engaged in transactions with Fidelity and the Teachers Insurance Annuity Association that are prohibited under 29 U.S. Code § 1106 of ERISA.

    29 U.S. Code § 1108 of ERISA allows “reasonable arrangements with a party in interest … if no more than reasonable compensation is paid therefor.” In this case, a party of interest could include an entity that provides services to the retirement plan. Fidelity and the Teachers Insurance Annuity Association provide investment management and recordkeeping-related services to Cornell.[9]

    According to SCOTUSblog:[10]

    “ The question the courts are grappling with is whether the beneficiaries can state a complaint merely by alleging that Cornell has violated Section 1106 itself – by transacting with somebody from whom it is buying services – or whether they also must allege that the transaction is not protected by Section 1108, perhaps because compensation for those services is unreasonably high.[5] ”

    In a 9-0 opinion, the court reversed the judgment of the United States Court of Appeals for the Second Circuit, holding that plaintiffs making a §1106(a)(1)(C) claim must only plausibly allege that a plan fiduciary, its manager, engaged in a prohibited transaction. Justice Sonia Sotomayor delivered the opinion of the court.[1]

    Opinion

    In the court's majority opinion, Justice Sonia Sotomayor wrote:[1]

    “

    The Court today holds that plaintiffs seeking to state a §1106(a)(1)(C) claim must plausibly allege that a plan fiduciary engaged in a transaction proscribed therein, no more, no less. Plaintiffs are not required to plead and prove that the myriad §1108 exemptions pose no barrier to ultimate relief. The judgment of the Second Circuit is reversed, and the case is remanded for further proceedings consistent with this opinion.[5]

    		”
    —Justice Sonia Sotomayor

    Concurring opinion

    Justice Samuel Alito filed a concurring opinion, joined by Justices Clarence Thomas and Brett Kavanaugh.

    In his concurring opinion, Justice Alito wrote:[1]

    “

    I join all of the opinion of the Court for the simple reason that 29 U. S. C. §1108 sets out affirmative defenses, and it is black letter law that a plaintiff need not plead affirmative defenses.1 See Fed. Rule Civ. Proc. 8(c); Taylor v. Sturgell, 553 U. S. 880, 907 (2008). Here, as the Court points out, §1108 sets out a long list of affirmative defenses, and it would make no sense to require a complaint to anticipate and attempt to refute all the affirmative defenses that a defendant might raise.

    Unfortunately, this straightforward application of established rules has the potential to cause—and, indeed, I expect it will cause—untoward practical results. The administrator of an ERISA plan like the one at issue will almost always find it necessary to employ outside firms to provide services that the plan needs. When it does so, these outside firms become ‘part[ies] in interest’ under the terms of ERISA, see §1002(14)(B), and as a result, their provision of services to the plan is unlawful under §1106 unless one of the exemptions in §1108 applies. The upshot is that all that a plaintiff must do in order to file a complaint that will get by a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) is to allege that the administrator did something that, as a practical matter, it is bound to do. [5]

    		”
    —Justice Samuel Alito

    Text of the opinion

    Read the full opinion here.

    October term 2024-2025

    See also: Supreme Court cases, October term 2024-2025

    The Supreme Court began hearing cases for the term on October 7, 2024. The court's yearly term begins on the first Monday in October and lasts until the first Monday in October the following year. The court generally releases the majority of its decisions in mid-June.[11]


    See also

    External links

    Footnotes

    1. ↑ 1.0 1.1 1.2 1.3 1.4 1.5 U.S. Supreme Court, "Cunningham v. Cornell University," April 21, 2025
    2. ↑ 2.0 2.1 "U.S. Supreme Court", "23-1007 CUNNINGHAM V. CORNELL UNIVERSITY" October 4, 2024
    3. ↑ Supreme Court of the United States, "No. 23-1007," accessed November 18, 2024
    4. ↑ Oyez, "Cunningham v. Cornell University," accessed November 18, 2024
    5. ↑ 5.0 5.1 5.2 5.3 5.4 Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
    6. ↑ U.S. Court of Appeals for the Second Circuit, Cunningham v. Cornell University, decided November 14, 2023
    7. ↑ Supreme Court of the United States, "Oral Argument - Audio," argued January 22, 2025
    8. ↑ Supreme Court of the United States, "Oral Argument - Transcript," argued January 22, 2025
    9. ↑ Cornell Law School, "29 U.S. Code § 1108 - Exemptions from prohibited transactions," April 21, 2025
    10. ↑ SCOTUSblog, "Justices clarify pleading rules for retirement-plan litigation," April 21, 2025
    11. ↑ SupremeCourt.gov, "The Supreme Court at Work: The Term and Caseload," accessed January 24, 2022
    Retrieved from "https://ballotpedia.org/wiki/index.php?title=Cunningham_v._Cornell_University&oldid=10413131"