On June 4, 2013, the Ninth Circuit issued an opinion in Harris v. Amgen, reversing an order granting a motion to dismiss and reviving a class action ERISA lawsuit based on allegedly imprudent investments in company stock. In doing so, the court significantly limited the scope of the “presumption of prudence,” a key legal defense in such cases.

BACKGROUND -

ERISA imposes a “prudent person” standard of care on plan fiduciaries. To comply with that standard, a fiduciary must act “with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent man acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims.”