Anna Moneymaker/The New York Times

Cornell participated in oral arguments on Wednesday in the case of Cunningham v. Cornell.

January 22, 2025

Supreme Court Adjourns Cornell Retirement Plan Case Until February

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The U.S. Supreme Court heard oral arguments in Cunningham et al. v. Cornell University, et al. on Wednesday. The University argued that the plaintiffs had no grounds to file the lawsuit due to a lack of evidence, while the plaintiffs asserted that this argument undermines employee protections provided by law.   

In the case, filed by law firm Schlichter Bogard in 2016, the plaintiffs allege that Cornell engaged in prohibited transactions with two major retirement service providers that handled investment and recordkeeping duties for workers’ retirement plans.

The lawsuit maintains that these arrangements violated the Employee Retirement Income Security Act, a law that enables workers to sue employers for breaches of contract in their employee retirement and health plans. Section 1106(a)(1)(c) of this law prohibits certain financial transactions with “parties-in-interest” unless the transactions are reasonable and necessary.

The respondents, represented by Nicole Saharsky, co-chair of the Supreme Court & Appellate Practice at Mayer Brown, said the plaintiffs failed to meet the legal requirements to bring their claims forward, arguing that the ERISA demands conclusive evidence of harm or improper conduct.

The petitioners’ attorneys pushed back, arguing that the ERISA’s design places the burden of proof on the University.

“It makes perfect sense to put the burden on the fiduciary,” Yaira Dubin, one of the petitioners’ two arguing attorneys and U.S. assistant to the solicitor general, said referencing the University during the oral arguments. “The fiduciary is the one who enters into the transaction. The fiduciary is the one who has information about the transaction.”

The plaintiffs continued that placing this burden on employees undermines the protections Congress intended when creating the ERISA. 

Cornell’s legal team countered that allowing ERISA-related cases to proceed based solely on allegations would open the floodgates to “frivolous lawsuits” and divert resources away from legitimate employee benefits or concerns.

The Supreme Court was divided on the issue, with Chief Justice John Roberts and Associate Justice Brett Kavanaugh expressing concern about the cost and burden of providing information or evidence for employers if plaintiffs can sue without evidence upfront. 

“This expanded litigation threat would be near limitless because every college and university relies on third-party service providers,” Kavanaugh said. “And because the contract’s mere

existence … would be enough to force these defendants to proceed through expensive discovery, it risks opening the floodgates to burdensome [lawsuits].”

Conversely, Associate Justice Ketanji Brown Jackson highlighted the importance of employee protections and questioned whether the current legal standard makes it too difficult for workers to hold fiduciaries accountable.

“[With] some of the exemptions [it] would be really, really hard for us to determine that the plaintiff has to plead them because they don’t have the information,” Jackson said, explaining why employees should not be held responsible for providing evidence of contract violations.

The Supreme Court adjourned the hearing to allow more time for deliberation, citing the complexity of the issues presented. Justices will reconvene on Feb. 21 to continue discussions, with Supreme Court opinions traditionally delivered in late June.

Jeremiah Jung ’28 is a Sun staff writer and can be reached at [email protected].