Second Circuit Affirms Dismissal Of ERISA Stock Drop Claims

The Second Circuit recently affirmed the dismissal of an ERISA stock drop class action because, like the district court, it held that Named Plaintiff Debra Taveras lacked constitutional standing to pursue her claims.  Taveras alleged that defendants, which included UBS and a number of individuals, breached their fiduciary duties by maintaining the company stock fund as an investment option in the UBS Savings and Investment Plan.  As relevant here, Taveras's complaint alleged that "[a]s a direct and proximate result of the breaches of fiduciary duties alleged [in the complaint], the Plans, and indirectly Plaintiffs and the Plans' other Participants and beneficiaries, lost a significant portion of their investments."  The Court determined that this was nothing more than an attempt to demonstrate injury‐in‐fact by showing diminution in the value of the Plan's assets generally, and that it was possible that the Plan lost value while Taveras's individual account did not.  Furthermore, even if Taveras's account suffered a loss in value after she purchased shares of company stock, the district court correctly concluded that the complaint failed to allege any facts connecting her losses to the fiduciaries' alleged breaches.  Taveras therefore lacked constitutional standing to bring her claims.  The case is Taveras v. UBS AG, 2015 WL 1934576 (2d Cir. Apr. 30, 2015) (unpublished).

Second Circuit Affirms Dismissal Of ERISA Stock Drop Claims

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.