A decision by the Supreme Court to remand a long-standing“stock-drop” case brought under theEmployee Retirement Income Security Act underscores thesignificance of the high court’s unanimous 2014 decision inFifth Third Bancorp v. Dudenhoeffer.

In its landmark Fifth Third ruling, the Supreme Courtraised the bar for defined contribution fiduciaries by finding theyno longer enjoyed a “presumption of prudence” in offeringparticipants company stock in retirement plans.

In the wake of that decision, ERISA experts weighed in, noting thatthe ruling also raised the bar for plaintiffs claims in stock dropcases: yes, plan fiduciaries could no longer hide behind apresumption of prudence, but plaintiffs would also have a higherbar in bringing stock-drop claims.

Yesterday, the Supreme Court reversed a 9^th CircuitCourt of Appeals decision that ruled in favor of plaintiffs inHarris v. Amgen, Inc., a 401(k) stock-drop claim firstfiled in 2007 against the global pharmaceutical firm.

The original claim alleged fiduciaries of Amgen defined contribution plansbreached their fiduciary obligations under ERISA by continuing tooffer company stock to participants as its value plummeted 33percent amid safety concerns and allegations of misleadingmarketing tactics regarding one of its flagship drugs for treatinganemia in cancer patients.

A U.S. District Court ruled in favor of Amgen, dismissing thecase, in part on the grounds the Amgen fiduciaries enjoyed apresumption of prudence in offering company stock.

On appeal in 2013, the 9^th Circuit disagreed, sayingthe presumption of prudence did not apply to Amgen. The case thenmade its first trip to the Supreme Court.

At the time, the high court was considering the Fifth ThirdBancorp v. Dudenhoeffer case.

After unanimously ruling in Fifth Third, the SupremeCourt remanded the case back to the 9^th Circuit,instructing the appellate court to reconsider the case in light ofthe new prudence benchmarks established in the Fifth Thirdruling.

The 9^th Circuit didn’t budge.

In ruling for plaintiffs again—this time after considering theSupreme Court’s Fifth Third ruling—the 9^thCircuit in part based its decision on the fact that other claimsagainst Amgen had found for stockholders.

Again, the case made its way back to the Supreme Court, whichyesterday overruled the 9^th Circuit in a so-calledper curiam ruling—one issued by the court as a whole, andnot signed by a given justice.

In remanding the case again, the Supreme Court ruled the9^th Circuit “failed to properly evaluate the complaint,”according the high court’s ruling.

The Supreme Court’s order also said:

“The Ninth Circuit failed to assess whether the complaint in itscurrent form ‘has plausibly alleged’ that a prudent fiduciary inthe same position ‘could not have concluded’ that the alternativeaction ‘would do more harm than good’.”

In its ruling, the 9^th Circuit argued that removingthe Amgen Common Stock Fund from the investment lineup could beviewed as a fiduciary action that satisfies the new standards ofprudence established in the Fifth Third case.

The Supreme Court did not necessarily disagree, but said thatthe facts supporting that position “should appear in thestockholders’ complaint,” according to Supreme Court documents.

“The (Supreme) Court has not found sufficient facts andallegations to state a claim for breach of the duty of prudence,”the high court said.

Now, it is up to the original district court to determine ifplaintiffs in Harris v. Amgen, Inc. can amend the originalcomplaint.