After addressing a contract-based claim, the Court turned to the ERISA claim. The Court found that Martin Hopwood breached his ERISA fiduciary duties under 29 U.S.C. §1109(a), and was therefore personally liable to the plan for any losses resulting from the breach. The court found that Martin Hopwood was an ERISA fiduciary because he admittedly exercised discretionary authority and control over the management or disposition of plan assets.

The Ninth Circuit clarified that “[t]o state a claim for breach of fiduciary duty under ERISA, a plaintiff must allege that (1) the defendant was a fiduciary; and (2) the defendant breached a fiduciary duty; and (3) the plaintiff suffered damages.” See 29 U.S.C. § 1109(a); see also Mathews v. Chevron Corp., 362 F.3d 1172, 1178 (9th Cir. 2004).The court further noted that there are two types of fiduciaries under ERISA:Named fiduciary: a named fiduciary is a party designated in a plan instrument.

The court noted that ERISA provides that a breaching fiduciary shall be liable to the plan for “any losses to the plan resulting from each such breach.” 29 USC § 1109(a). According to the court of appeals, ERISA is thus broad enough to accommodate the “total return” principle recognized in the Restatement.

ERISA is silent on the burden of proof issue, stating only that a breaching fiduciary shall be liable for any losses to the plan “resulting from” its breach. Id. at *12 (citing 29 U.S.C. § 1109(a)). In the absence of explicit direction in the text of the ERISA statute, the First Circuit looked to guiding principals.

Therefore, Alerus never sent transaction documents to Land Rover, and Pioneer sold its assets to an unaffiliated third party instead (for more than $10 million above what the Plan would have offered for Pioneer’s stock).Tenth Circuit Decision In an opinion authored by Judge Carolyn B. McHugh and joined by Judge Gregory A. Phillips, the Tenth Circuit recognized that the plain language of section 409(a) of ERISA, 29 U.S.C. § 1109(a), establishes liability for losses “resulting from” a breach. The statute, however, is silent as to who bears the burden of proving a resulting loss.

Langbecker v. Electronic Data Systems Corp., 476 F.3d 299, 309-13, 39 EBC 2352 (5th Cir. 2007)(13 PBD, 1/22/07; 34 BPR 210, 1/23/07). [18]Under ERISA Section 409, 29 U.S.C. §1109, participants, beneficiaries, and fiduciaries may recover "losses to the plan" resulting from breaches of fiduciary duty. See ERISA Section 502(a)(2), 29 U.S.C. §1132(a)(2) (authorizing civil action for relief under ERISA Section 409).

State Street waited until November 21, 2008 to suspend purchases of GM stock, and until March 31, 2009 to sell off 50 million shares held by plan participants, in the process costing fund investors most of the valur of their holdings. Plaintiffs filed a putative class action, alleging that the belated decision was a breach of fiduciary duty of prudence under ERISA § 409(a), 29 U.S.C. § 1109(a).Although the district court dismissed the action, the Sixth Circuit reverses. The panel acknowledges that ESOPs are ordinarily excepted from the the duty of diversification.

Other provisions of ERISA, by contrast, expressly address who may be a defendant. See, e.g., § 409(a), 29 U.S.C. § 1109(a) (stating that “[a]ny person who is a fiduciary with respect to a plan who breaches any of the responsibilities, obligations, or duties imposed upon fiduciaries by this subchapter shall be personally liable” (emphasis added)); § 502(l), 29 U.S.C. § 1132(l) (authorizing imposition of civil penalties only against a “fiduciary” who violates part 4 of Title I or “any other person” who knowingly participates in such a violation). And § 502(a) itself demonstrates Congress’ care in delineating the universe of plaintiffs who may bring certain civil actions.

On this issue, the Court acknowledged that the Fourth Circuit’s decision was consistent with the Court’s “plan as a whole” language in Russell, supra, but explained that the rationale for Russell supported LaRue’s claim. Russell reasoned that ERISA § 409, 29 U.S.C. § 1109, which is enforced through Section 502(a)(2), was focused on protecting plan assets from losses caused by fiduciary breaches. The LaRue Court reasoned that the “plan as a whole” requirement makes sense when the claim involves a defined benefit plan because, in that context, participants are being protected from “default risk” if the plan were unable to provide the promised defined benefit.