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Simpson Thacher obtained a victory on behalf of its client, L3 Technologies, in an ERISA lawsuit brought on behalf of a putative class of participants in an L3-sponsored employee stock ownership plan. The complaint, which followed on the heels of a related securities class action, alleged that members of L3's Benefit Plan Committee breached their fiduciary duties under ERISA by imprudently failing to protect plan participants from a temporary drop in L3's stock price following the company’s July 2014 disclosure of accounting misconduct. 

On October 4, 2017, Judge Valerie Caproni of the Southern District of New York granted Defendants’ motion to dismiss the complaint, finding no plausible allegations that Defendants knew investment in L3 stock was imprudent during the Class Period and holding that, in any event, the complaint failed to satisfy the pleading standard established under the Supreme Court’s recent decision in Fifth Third Bancorp v. Dudenhoeffer. In applying Fifth Third, the court agreed with Defendants that the complaint had failed to satisfy its burden of plausibly showing that Defendants could have undertaken a viable, alternative course of action to insulate plan participants from the temporary decrease in L3’s stock price.  

The decision has received prominent media coverage in both the New York Law Journal and Law360. To read the New York Law Journal article, click here (subscription required). To read the Law360 article, click here (subscription required).

The Simpson Thacher team representing Defendants in obtaining the dismissal included Paul Curnin, Michael Garvey, David Elbaum, Sarah Eichenberger, Eamonn Campbell and Elizabeth Wilkerson (Litigation).