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New Cases and Developments

NACUA's Legal Resources staff summarizes current higher education cases and developments and provides the full text of selected cases to members. New cases and developments are archived here for up to 12 months.  Cases provided by Fastcase, Inc.

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Employee Benefits & ERISA; Faculty & Staff

Cunningham, et al. v. Cornell University (S.D.N.Y. September 29, 2017)

Memorandum and Order granting in part and denying in part Defendant’s Motion to Dismiss. Plaintiffs, as participants and beneficiaries of the Cornell University Retirement Plan and Tax Deferred Annuity Plan (the Plans), alleged that Defendants engaged in prohibited transactions and violated their fiduciary duties under sections 404 and 406 of the Employee Retirement Income Security Act (ERISA). The court found that only Plaintiff’s claims of a fiduciary breach of the duty of prudence, duty to monitor, and co-fiduciary duty of liability could proceed based on allegations that Defendants allowed the Plans to pay unreasonable administrative fees, continued to include accounts with high fees but otherwise performed poorly, selected and retained investment options with high fees and poor performance relative to other available investment options, and chose and retained high-cost retail mutual funds instead of materially identical, lower-cost alternatives. 

10/5/2017
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Employee Benefits & ERISA; Faculty & Staff

Gould v. University of Miami (S.D. Fla. September 19, 2017)

Order denying Defendant’s Motion to Dismiss and directing Plaintiff to provide a more definite statement. Plaintiff, individually and seeking class representation, filed suit against the University of Miami for an alleged breach of its fiduciary duty under the Employee Retirement Income Security Act (ERISA).  Specifically, Plaintiff alleged that the University failed to provide him and similarly situated employees with ERISA plan benefits, and failed to advise  that certain plan benefits were available to “volunteer faculty” members. Concluding that Plaintiff failed to identify which ERISA and other benefit plans he and other similarly-situated persons were eligible for, the court directed Plaintiff to file a more definite statement. 

9/26/2017
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Employee Benefits & ERISA; Faculty & Staff

Sacerdote v. New York University (S.D.N.Y. Aug. 25, 2017)

Opinion and Order granting in part and denying in part New York University’s (NYU) Motion to Dismiss. Plaintiffs, individually and as the representatives of a class, filed suit alleging that NYU did not appropriately manage their pension plans in violation of the fiduciary duties of loyalty and prudence imposed on trustees under the Employee Retirement Income Security Act (ERISA). Specifically, Plaintiffs claim that NYU permitted participants to choose among imprudent investment options, allowed plan service providers to mandate that their own investment products and recordkeeping services be included, failed to remove poorly performing options, and engaged in prohibited transactions. Plaintiffs’ loyalty-based claims failed outright on account of their conclusory nature. However, the court found Plaintiffs’ allegations of recordkeeping procedural deficiencies, revenue sharing with plan providers, and failure to remove poorly performing options were sufficient to suggest potential imprudence by NYU. 

8/29/2017
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Employee Benefits & ERISA; Faculty & Staff

Hitchcock v. Cumberland University 403(b) DC Plan (6th Cir. Mar. 14, 2017)

Opinion reversing the district court’s judgment and remanding the case for further proceedings. Plaintiffs-Appellants were employees of Cumberland University and participants in the University’s defined contribution pension plan.  After enrolling in the pension plan, Cumberland amended the terms to reduce University contributions to employees’ plans. In response, Plaintiffs-Appellants filed a class action suit against Cumberland alleging wrongful denial of benefits, anti-cutback violations, breach of fiduciary duty, and failure to provide notice. The district court dismissed the first three claims for failure to exhaust administrative remedies and dismissed the final claim based on Plaintiffs’ failure to respond fully to Defendant’s Motion to Dismiss. On appeal, the Sixth Circuit found that Plaintiffs’ anti-cutback and fiduciary duty allegations were statutory claims under the Employee Retirement Income Security Act (ERISA) and therefore not subject to the exhaustion requirement. The district court also erred in finding that Plaintiffs-Appellants failed to oppose Cumberland’s argument as to the notice claim. 

3/15/2017
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Sexual Misconduct – Employment; Retaliation; Employee Benefits & ERISA; Faculty & Staff

Byrd v. Board of Supervisors for the Louisiana System (W.D. La. Mar. 10, 2017)

Ruling granting in part and denying in part the Board of Supervisors for the University of Louisiana System’s Motion for Partial Summary Judgment. A former employee of Louisiana Tech University claimed that her former supervisor and step-father sexually harassed her while she was employed at Louisiana Tech and that she was terminated in retaliation for reporting the alleged misconduct. She brought suit against the University’s Board of Supervisors, seeking damages for her loss of health and dental insurance, employer contributions to the state employees' retirement system, and other fringe benefits. The Board moved to dismiss, arguing that Plaintiff had not provided evidence or calculations to support her claims for damages. The Court granted the Motion as applied to the miscellaneous fringe benefits but otherwise denied the Motion, finding that Plaintiff raised sufficient allegations and evidence to indicate that a genuine issue of material fact existed regarding any reasonable claim for retirement benefits and the damages she allegedly suffered in paying health insurance premiums.

3/13/2017
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Employee Benefits & ERISA; Faculty & Staff

Taylor v. University of the Cumberlands (E.D. Ky. Feb. 7, 2017)

The former president of the University of the Cumberlands claimed that, while he was serving as president, the University promised to provide him and his wife with a yearly salary and other benefits for life after he retired. Upon his retirement, the University offered the former president a one-year renewable contract providing for a reduced salary, claiming that the original contract did not set forth a definite amount for his salary, and warning that he would lose all prior benefits if he failed to accept the new offer. Plaintiff filed suit alleging, among other state law claims, that the University terminated his ERISA-protected benefits by breaching its original contract. Based on the surrounding circumstances and text of the disputed agreement, the Court concluded that the procedures for receiving the remaining benefits provided by the agreement were not “sufficiently ascertainable.” Thus, Plaintiffs’ complaint failed to state a viable claim under ERISA.

2/9/2017
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Employee Benefits & ERISA

Exposure Draft on Fiduciary Duties Issued by the Governmental Accounting Standards Board

Exposure draft on fiduciary activities was issued by the Governmental Accounting Standards Board (GASB). The would establish criteria for identifying and reporting fiduciary activities of all state and local governments. Under the proposed criteria, public institutions with single-employer defined benefit pension plans or other post employment benefit (OPEB) plans subject to the requirements of Statements 67 and 74, respectively, will have fiduciary fund reporting requirements on the pension or OPEB trusts. Interested parties are invited to comment on the draft by March 31.
1/11/2016
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