This month’s Alert addresses the oral arguments before the Supreme Court in two cases: Fifth Third Bancorp v. Dudenhoeffer (No. 12-751), in which the Court is considering the presumption of prudence for employee stock ownership plan (ESOP) fiduciaries under the Employee Retirement Income Security Act of 1974 (ERISA); and Loughrin v. United States (No. 13-316), in which the Court is reviewing the elements of a claim under 18 U.S.C. § 1344(2), the federal bank fraud statute.
We also discuss the Supreme Court’s grant of certiorari in Dart Cherokee Basin Operating Company, LLC v. Owens (No. 13-719), in which the Court will consider what a defendant must establish in order to remove a state court action to federal court. The Court will address whether a defendant must include evidence supporting federal jurisdiction in the notice of removal, or whether it is sufficient for the defendant simply to set forth a “short and plain statement of the grounds for removal” as specified in the federal removal statute, codified at 28 U.S.C. § 1446(a).
Finally, we discuss two Delaware Chancery Court opinions addressing the standard for alleging bad faith-based breach of fiduciary duty claims. In Chen v. Howard-Anderson, 2014 WL 1366551 (Del. Ch. Apr. 8, 2014) (Laster, V.C.), the Chancery Court denied defendants’ motion for summary judgment with respect to breach of fiduciary duty claims, holding that the “utterly failed to attempt” standard set forth in the Delaware Supreme Court’s decision in Lyondell Chemical Company v. Ryan, 970 A.2d 235 (Del. 2009) (Berger, J.) does not govern all bad faith claims against Delaware directors. In Houseman v. Sagerman, 2014 WL 1478511 (Del. Ch. Apr. 16, 2014) (Glasscock, V.C.), the Chancery Court applied the Lyondell standard and granted defendants’ motion to dismiss breach of fiduciary duty and aiding and abetting claims.