Federal Court Denies ESOP Participant Claims for Breach of Fiduciary Duty

On May 20, the U.S. District Court for the Eastern District of Missouri, on a motion to dismiss, ruled that in order to succeed on a breach of fiduciary duty claim, the complaint must state that the defendant was acting in his capacity as a plan fiduciary when he engaged in the alleged misconduct.

In Blankenship v. Chamberlain, 2009 WL 1421201 (E.D. Mo. May 20, 2009), the court considered a complaint with five counts, including two claims for breach of fiduciary duty under ERISA (one for injunctive relief and one for monetary relief), a common law claim for breach of fiduciary duty, a claim under Missouri state law to remove the defendant as an officer of the company and a trustee of the ESOP, and a claim for an accounting.

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