In Tatum v. RJR Pension Investment Committee, No. 16-1293 (4th Cir. 2017), the Fourth Circuit Court of Appeals (the “Court”) was facing this case, brought under ERISA, for the third time.
At this point, the beneficiaries of an ERISA retirement plan were appealing the judgment of the district court, issued after a full bench trial, that the defendant’s/fiduciary’s breach of its duty of procedural prudence, occurring when the plan sold non-employer stock funds, did not cause the substantial losses in the retirement plan. The Court noted that it had previously remanded the case to the district court, so that it could apply the correct legal standard for determining loss causation, but the Court had expressed no opinion as to the proper outcome of the case.
On remand, applying the correct standard, the district court found that the fiduciary’s breach did not cause the losses because a prudent fiduciary would have made the same divestment decision at the same time and in the same manner. Upon reviewing the case, the Court affirmed this decision.