Thole v. U. S. Bank, N. A. (17-1712)
argument 17-1712Thole v. U. S. Bank, N. A.
Supreme Court of the United States
1h 2m
7 speakers
8 chapters
transcribed 6 days ago
official recording ↗
Transcript
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What is the plaintiffs’ argument that pension plan participants have an equitable property interest in the trust assets?
We will hear argument next this morning in case seventeen seventeen twelve, Thole versus United States Bank. Mr. Stritz.
Thank you, Mr Chief Justice, and may it please the court. My clients are beneficiaries of a pension trust. We allege that the trustees, through disloyalty and imprudence, caused the trust to lose seven hundred and fifty million dollars. This suit presents a justiciable case or controversy for three reasons. First, my clients have an equitable interest in all assets of their pension trust. That is a property interest. And when seventy seven hundred and fifty million dollars of that property was lost, my client suffered a concrete injury. Respondents are between a rock and a hard place. They can't argue that participants have an equitable interest in only some of the trust corpus because the trust is unsegregated and undivided.
So they're forced to take the incredible position, to quote their brief, that defined benefit plan participants have no interest in plan assets. If respondents were right, no one would have an equitable interest in any of the trust's assets. But a trust can't exist unless someone holds equitable title to its assets, and that someone here can only be the participants. Second, and independently, my clients have a right to loyal stewardship of their retirement savings. When respondents engaged in self dealing, my clients suffered a concrete injury. Under the centuries old no further inquiry rule, beneficiaries could sue even when there was no conceivable possibility of a financial loss. The breach itself gives rise to a case or controversy.
In any event, and third, my clients have representational standing to vindicate injury to their plan. Since before the founding, when a trustee was unwilling to sue, equity courts allowed beneficiaries to do so on behalf of the trust. And so I'd like to begin with our property injury. A defined benefit plan under ERISA is a private exchange of services. Workers forego wages in exchange for a promise of a future payment secured by trust property. This is critical because there is an unsegregated, undivided pool of assets, the trust, that pays the pension of all the beneficiaries. So planned participants, like my clients, have an equitable interest in those assets.
Does your argument depend upon a forward looking theory of injury? In other words, it's if you it's one thing to have a a conflict of interest or all the other things uh you allege that lead to a situation that causes you no direct financial harm. But is your theory that well because they did that in this situation, And even if that didn't hurt us, somebody like that is likely to do it again and that might hurt us. Or is it purely the fact of retrospective, this person did something that under common trust law would be regarded as a bad thing, and under the no inquiry rule that's enough, so you shouldn't worry about the fact that it didn't harm us at all.
So the answer to that question is we have mul multiple concrete injuries here, and the things that we're seeking flow from the particular injuries, right? So um what I'm talking about right now is our property injury. If we're right that we have an equitable interest in the assets, that theory depends on a diminution in the value of the trust asset. So I don't know, I wouldn't call that prospective. I would say the trust lost seven hundred fifty Yeah.
But but what did your clients lose? I mean your your friend on the other side says they get nothing. They're in the same position if you win or if you lose.
Well, so I I mean I c I couldn't disagree with that more. There's always risk. Pension plans fail, businesses fail. In two thousand eight, AIG had $100 billion until they didn't. Well,
those are other situations. They say in this case well just look at it abstractly. You know, say you need six hundred million dollars in your fund so everybody will feel comfortable, your clients are going to get everyone's benefits. And you know, there are eight million dollars in the fund and there's some fraud that reduces it to s uh uh eight hundred million to to seven hundred million.
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Chapters
8 chapters
1
What is the plaintiffs’ argument that pension plan participants have an equitable property interest in the trust assets?
0:00–8:51
2
How do the parties define “concrete injury” and why is it crucial for Article III standing?
8:51–16:41
3
What historical trust‑law principles support a beneficiary’s right to sue for breach of fiduciary duty?
16:41–25:11
4
How does the “no‑further‑inquiry” rule affect the proof of harm to the trust?
25:11–33:39
5
Why do the respondents argue that the plan’s benefits are unrelated to the trust’s corpus value?
33:39–41:05
6
What role does the Pension Benefit Guaranty Corporation (PBGC) play in the standing analysis?
41:05–48:37
7
How do the parties address the practical question of underfunded versus overfunded plans and employer liability?
48:37–55:29
8
What is the Court’s ultimate decision on whether the petitioners have standing to sue under ERISA?
55:29–1:02:27