Seventh Circuit Denies Petition for Panel Rehearing and Petition for Rehearing En Banc in Deere Litigation
Yesterday afternoon, the U.S. Court of Appeals for the Seventh Circuit denied plaintiffs’ Petition for Panel Rehearing and Petition for Rehearing
En Banc in
Hecker v. Deere & Co., Nos. 07-3605 & 08-1224. In their petition, 401(k) plan participants had sought review of the panel’s prior decision affirming dismissal of ERISA claims that challenged as excessive fees paid by the plan. The Seventh Circuit panel issued a brief opinion denying the petition, available
here. In its decision, the Seventh Circuit rejected the Department of Labor’s (“DOL”) view – expressed in a footnote to its preamble of 1991 regulations appearing at 56 Fed. Reg. 10724, 10732 n.21 (Mar. 13, 1991) – “that, even if the plan otherwise qualifies as a section 404(c) [29 U.S.C. § 1104(c)] plan, the fiduciary is not relieved by 404(c) from liability for plan losses resulting from the imprudent selection and monitoring of an investment option offered by the plan.” The Seventh Circuit panel continued by explaining that regardless of whether the DOL’s interpretation of its own regulation was entitled to deference under
Chevron USA Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842-43 (1984), which the Seventh Circuit found it was not, dismissal was appropriate in any event under the panel’s initial, alternative ground, namely, “that there was no duty to scour the market to find the fund with the lowest imaginable fees, and that the fees themselves in the Funds identified in the complaint could not be deemed imprudent because they were offered at the same prices to the general public.”