[JURIST] The US Supreme Court [official website; JURIST news archive] heard oral arguments Monday in LaRue v. DeWolff, Boberg & Associates [Medill backgrounder; merit briefs], 06-856, a case where the Court considered whether the Employee Retirement Income Security Act (ERISA) [text; US DOL backgrounder] allows an employee to sue for losses incurred when administrators of his retirement plan ignore his instructions on how to invest his retirement money. James LaRue says that he lost $150,000 when administrators of his 401(k) retirement plan refused to divest in risky stocks after he had twice instructed them to do so.
In the past, ERISA has been found to only allow recovery when plan administrators have injured all plan participants by malfeasance. The US District Court ruled that LaRue was not entitled to sue for recovery, and the US Court of Appeals for the Fourth Circuit affirmed [opinion, PDF] the ruling. Lawyers for the plan administrators argued that allowing individuals to sue for recovery of losses would open the floodgates to excessive litigation. LaRue's lawyers argued that ERISA gives individuals the right to sue over losses in federal court. AP has more.