Cunningham v. Cornell University
In brief
Plaintiffs may start these ERISA claims by alleging a prohibited transaction, while defendants must prove any statutory exemption.
- Where it stands
- Decided
Decided 9-0 · April 17, 2025 · Opinion by Justice Sotomayor
- What it’s about
- The Supreme Court ruled that plaintiffs suing retirement plan fiduciaries under ERISA for engaging in prohibited transactions need only allege that the transaction occurred, not that it failed to qualify for statutory exemptions.
- Who it affects
- Workers challenging payments by retirement-plan fiduciaries (people who manage plan assets) to service providers have a simpler path to start a lawsuit. Plan fiduciaries can still argue that an exemption for reasonable and necessary services applies.
Summary: written with AI from the case record.
What it's about
The Court determined that exemptions for reasonable and necessary services are affirmative defenses that defendants must prove, rather than elements plaintiffs must disprove in their initial complaint.
The decision sets the starting rules for lawsuits over retirement-plan transactions with service providers.
Question presented
Can a plaintiff state a claim under ERISA’s provision prohibiting a plan fiduciary from knowingly engaging in transactions with barred parties, solely by alleging that such a transaction took place?
What the Court decided
Holding
To state a claim under §1106(a)(1)(C), a plaintiff need only plausibly allege the elements contained in that provision itself, without addressing potential §1108 exemptions. 86 F. 4th 961, reversed and remanded.
- Result
- Reversed
The vote
- Joined the judgment
- Concurred in a separate opinion
- Wrote an opinion
From the opinions
“To state a claim under §1106(a)(1)(C), a plaintiff need only plausibly allege the elements contained in that provision itself, without addressing potential §1108 exemptions.”
What's next
The case returns to the lower courts, which must apply the Supreme Court's pleading rule. Retirement-plan fiduciaries facing similar suits may raise exemptions as defenses rather than requiring workers to disprove them at the start.
Documents
Docket activity
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More questions
- What did the Supreme Court rule in Cunningham v. Cornell University?
- Plaintiffs need only plausibly allege a prohibited transaction under ERISA. They need not address statutory exemptions in their initial complaint.
- Who won Cunningham v. Cornell University?
- The plaintiffs won on the legal question. The Court reversed the Second Circuit and sent the case back for further proceedings.
- What does Cunningham mean for retirement-plan participants?
- Participants can more easily begin claims involving plan payments to service providers. Fiduciaries may still defend those payments by proving an exemption applies.
- What happens next in Cunningham v. Cornell University?
- Lower courts will reconsider the case using the Court's rule. The defendants may raise statutory exemptions as defenses.
Sources
Primary materials plus reporting. Best-effort analysis: this explainer relies on a mix of primary materials and trusted secondary sources. Official filings and opinions remain authoritative.