BG Partner Greg Porter Quoted by Bloomberg Law

Gregory Porter, Bailey Glasser’s ERISA Practice Group Leader, is quoted in Bloomberg Law’s coverage of the unanimous ruling last week by the Supreme Court of the United States in an employee-friendly ruling that may expedite federal benefits laws claims to discovery.

The Supreme Court ruled in favor of the rights of employees and retirees to bring lawsuits under ERISA when their plans are alleged to be mismanaged. The Court reversed an earlier dismissal in favor of fiduciaries to the 403(b) plan available to Cornell University employees, and in doing so upheld the views of most lower courts that affirmative defenses to alleged “prohibited transactions” under ERISA are affirmative defenses which must be plead and proven by a defendant, and that a plaintiff need not rebut any or all of the potentially available exemptions at the pleading stage.

Greg Porter, and BG partner Mark Boyko, represented fourteen law professors who filed an amicus brief in the case supporting the position of the employees and retirees.

ERISA law was enacted in 1974 to defend against companies and unions tapping into pension funds as if they were operating reserves and treats virtually any transaction as a potential conflict of interest. A separate section later in the statute lays out 21 statutory exemptions for transactions that are “reasonable” or “necessary” and empowers the United States Labor Department to issue more. That separation—a few paragraphs of text between sections 406 and 408 in the law—means Congress intended the exemptions to be treated as affirmative defenses, shifting the responsibility to prove compliance from the plaintiffs to the defendants, the Supreme Court ruled in a decision authored by Justice Sonia Sotomayor.

In contrast to ERISA practitioners who state in the article that they are concerned about a flood of litigation, Greg Porter explained that in his experience, “There’s going to be more litigation here, but it’s not going to be a sea change.”

To read the full Bloomberg Law article, visit this link.

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