This educational guide is based on the linked primary sources. It is not a Court publication, is not affiliated with the Court, and is not legal advice.
In brief
Overview
The Supreme Court reversed the lower‑court decision, holding that plaintiffs need only plead a violation of ERISA § 1106(a)(1)(C) to survive a dismissal.
Petitioners argued that the plans paid service providers substantially more than reasonable record‑keeping fees.
According to United States (amicus curiae), according to United States (amicus curiae), the United States, as amicus curiae, urged reversal of the lower‑court ruling.
Background and question before the Court
What each side argues
Petitioners
Petitioners claim the plans paid service providers substantially more than reasonable record‑keeping fees.
According to XIAO WANG, petitioners describe the injury as the plans’ engagement of Fidelity and TIAA, which they say violates § 1106(a)(1)(C).
Petitioners argue that the explanation of the fee structure is not obvious.
Petitioners contend that Box 3 shows the quality of services and that the Second Circuit held the fees were justified.
Petitioners maintain that trust‑law principles do not require the pleading they are being asked to make; the requirement comes from ERISA.
United States (Amicus Curiae)
According to United States (amicus curiae), according to United States (amicus curiae), amicus counsel Yaira Dubin urged reversal of the lower‑court decision.
According to United States (amicus curiae), according to United States (amicus curiae), the amicus argued that the 21 exemptions in § 1108(b) are the fiduciary’s responsibility to plead and that plaintiffs could obtain discovery simply by alleging a routine service‑provider transaction.
According to United States (amicus curiae), according to United States (amicus curiae), service providers are one of nine categories of parties in interest; the other categories pose obvious risks of favoritism and abuse.
According to United States (amicus curiae), according to United States (amicus curiae), excessive fees to service providers can be paid with retirees’ money; the statute sets prohibited transactions and specific exemptions.
According to United States (amicus curiae), according to United States (amicus curiae), the scheme was deliberate; fiduciaries bear the burden to justify delegations to third parties.
According to United States (amicus curiae), according to United States (amicus curiae), there is no textual basis to limit the analysis to the narrow slice of transactions the Second Circuit considered.
According to United States (amicus curiae), according to United States (amicus curiae), the Court appears inclined to follow the Second Circuit’s approach but not to expand it to other parties in interest.
According to United States (amicus curiae), according to United States (amicus curiae), the prohibition‑exemption structure functions as an affirmative defense; district courts already have tools to handle bare‑bones allegations of routine service‑provider transactions.
According to United States (amicus curiae), according to United States (amicus curiae), the plausibility framework precludes such complaints because they implicate an affirmative defense.
- [1] d2b6bdf28b8705fd88f2-r1-669943d97001d2aa.pdf, p. 4
- [2] 5b56b17951beddbceb5e-r1-8abe845599872cc6.pdf, p. 37
- [3] 5b56b17951beddbceb5e-r1-8abe845599872cc6.pdf, p. 38
- [4] 5b56b17951beddbceb5e-r1-8abe845599872cc6.pdf, p. 39
- [5] 5b56b17951beddbceb5e-r1-8abe845599872cc6.pdf, p. 40
- [6] 5b56b17951beddbceb5e-r1-8abe845599872cc6.pdf, p. 41
- [7] 5b56b17951beddbceb5e-r1-8abe845599872cc6.pdf, p. 42
- [8] 5b56b17951beddbceb5e-r1-8abe845599872cc6.pdf, p. 43
- [9] 5b56b17951beddbceb5e-r1-8abe845599872cc6.pdf, p. 44
What happened at oral argument
Oral argument was held at 11:22 a.m. before the Supreme Court.
Justice Thomas asked what the injury was under the complaint.
Justice Alito asked about the “guardrails” in the case, Rule 11, standing, and what must be pled to establish standing.
Justice Alito also asked about the Rule 7 work‑round and whether a district court could rule on a judgment on the pleadings after an answer.
Justice Sotomayor asked whether the plaintiffs must plead an injury‑in‑fact.
According to Justice Alito, Justice Alito expressed puzzlement about why the plaintiff should do more than plead the elements of § 1106.
Justice Thomas asked what should be pled.
- [1] 5b56b17951beddbceb5e-r1-8abe845599872cc6.pdf, p. 2
- [2] 5b56b17951beddbceb5e-r1-8abe845599872cc6.pdf, p. 6
- [3] 5b56b17951beddbceb5e-r1-8abe845599872cc6.pdf, p. 25
- [4] 5b56b17951beddbceb5e-r1-8abe845599872cc6.pdf, p. 26
- [5] 5b56b17951beddbceb5e-r1-8abe845599872cc6.pdf, p. 27
- [6] 5b56b17951beddbceb5e-r1-8abe845599872cc6.pdf, p. 28
- [7] 5b56b17951beddbceb5e-r1-8abe845599872cc6.pdf, p. 55
- [8] 5b56b17951beddbceb5e-r1-8abe845599872cc6.pdf, p. 47
- [9] 5b56b17951beddbceb5e-r1-8abe845599872cc6.pdf, p. 70
What the Court decided
The Court held that plaintiffs need only plead a violation of § 1106(a)(1)(C) and therefore reversed the lower‑court ruling.
Justice Alito, in a concurring opinion, noted that district courts retain discretionary authority to expedite or limit discovery in § 1106(a)(1)(C) claims.
Why it matters
The decision clarifies that a plaintiff need not allege detailed factual misconduct at the pleading stage for ERISA § 1106(a)(1)(C) service‑provider fee claims; a simple allegation of a statutory violation suffices.
According to Justice Alito, the concurrence signals that district courts may still manage discovery discretion, which could limit costly discovery in future ERISA service‑provider cases.
Terms to know
No glossary terms are available for this guide.
Primary sources
Read the source materials on the official site or open the immutable repository copy used for this guide.
- 5b56b17951beddbceb5e-r1-8abe845599872cc6.pdforal argument transcript
- d2b6bdf28b8705fd88f2-r1-669943d97001d2aa.pdfopinion
Guide generated September 27, 2026. Automated validation accepted this version.