In Cunningham v. Cornell University (2025), the Supreme Court held that ERISA plaintiffs need only plausibly allege that a plan transaction with a service provider occurred — the burden of proving an exemption then falls to defendants. The decision is widely expected to expand prohibited-transaction litigation.
The Court resolved a circuit split by aligning the pleading burden with the statutory text of ERISA § 406 and § 408.
Plaintiffs can plead the bare elements of a prohibited transaction; defendants must affirmatively prove the transaction fits a statutory exemption.
Plaintiffs still must show injury and prove damages caused by the prohibited transaction.
It's general legal information, not legal advice. For a case-specific assessment, request a free review.
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