U.S. Court of Appeals for the Fourth Circuit

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Fourth Circuit rules in favor of R.J. Reynolds in ERISA class action

April 28, 2017

The Fourth Circuit ruled in favor of R.J. Reynolds, affirming the district court’s finding that a prudent fiduciary would have divested the Nabisco stock in the manner and at the time that R.J. Reynolds did. Although the panel ruled in favor of the company, it reaffirmed in a footnote that the standard in the Fourth Circuit remains whether a prudent fiduciary “would have" made the same decision.

U.S. Chamber weighs in on liability standard for fiduciary duty under ERISA

August 15, 2016

The U.S. Chamber and American Benefits Council filed an amicus brief supporting appellees in an ERISA class action case before the Fourth Circuit. The issue is whether R.J. Reynolds is liable for its decision in 1999 to divest Nabisco stock from its 401(k) retirement employee benefit plan. The U.S. Chamber twice filed an amicus brief in this case at other procedural stages.

The Chamber’s brief urged the Fourth Circuit to follow the loss-causation standard set by the Supreme Court in Dudenhoeffer and Amgen, and affirm based on the district court’s factual finding that a reasonably prudent fiduciary performing a proper investigation could have made the same investment decision that the appellees made.

William M. Jay and Jaime A. Santos of Goodwin Procter LLP served as counsel for the amici in this case.

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