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ERISA Act-Fiduciary Duty

7th Circuit Court of Appeals

Case Name: Julie A. Su v. Shirley Sherrod

Case No.: 22-2205

Officials: Hamilton, Brennan, and Kirsch, Circuit Judges.

Focus: ERISA Act-Fiduciary Duty

These appeals present questions about enforcement of fiduciary duties of loyalty and prudence under the Employee Retirement Income Security Act of 1974, better known as ERISA, 29 U.S.C. § 1001 et seq., as well as fiduciaries’ duties to comply with plan documents. Defendants Shirley T. Sherrod and Leroy Johnson were fiduciaries of a retirement plan that Sherrod had set up for herself and other employees of her medical practice. The Secretary of Labor brought this civil enforcement action alleging that both defendants had breached their fiduciary duties under ERISA. The district court granted summary judgment in favor of the Secretary and entered a permanent injunction against defendants removing them as fiduciaries. Walsh v. Sherrod, No. 16-cv04825, 2022 WL 971857 (N.D. Ill. Mar. 31, 2022). Both defendants have appealed.

The Seventh Circuit ruled that the facts show that both defendants breached their fiduciary duties of loyalty and prudence under ERISA. Hundreds of thousands of dollars of plan assets were used for defendant Sherrod’s personal benefit but were accounted for as plan expenses or losses rather than as distributions of retirement benefits to her. The permanent injunction was well within the scope of reasonable responses to the breaches


Decided 05/10/23

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