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With plaintiffs targeting employee benefit plans at an accelerating speed, Paul, Weiss has built an exceptional practice defending plan sponsors, fiduciaries and service providers in the technically demanding, high-stakes arena of ERISA, pension- and employee benefits-related class actions and related litigation. We are also among the preeminent firms nationally in handling the securities litigation that frequently accompanies ERISA disputes.

Claims Dismissed Against Morgan Stanley Investment Management

The United States Court of Appeals held that Judge Castel in the SDNY had properly dismissed claims of a breach of fiduciary duty under ERISA asserted against Morgan Stanley Investment Management by the Pension Benefit Guaranty Corporation, which was pursuing the claims on behalf of the pension plan of the now-bankrupt St. Vincent's Hospital in Greenwich Village.

In a detailed decision that elucidates the standards for pleading a claim for violation of ERISA, the majority opinion by Judge Cabranes, in which Judge Livingston joined, found that the allegations in the amended complaint did not, individually or in combination, give rise to a reasonable inference that (1) Morgan Stanley's investment decisions with respect to the pension plan's fixed-income portfolio were imprudent given the circumstances prevailing at the time of those decisions; (2) Morgan Stanley did not properly diversify the fixed-income portfolio; or (3) Morgan Stanley had failed to act in accordance with plan documents. Judge Straub dissented with respect to the "prudence" claim only, contending that the majority had created new and unrealistically onerous pleading rules for ERISA claims. 

Litigation partner Richard Rosen argued the appeal, as he had the motion to dismiss in the District Court.

April 2, 2013

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