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` Cite as: 577 U. S. ____ (2016)
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`Per Curiam
`SUPREME COURT OF THE UNITED STATES
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` AMGEN INC., ET AL. v. STEVE HARRIS, ET AL.
`ON PETITION FOR WRIT OF CERTIORARI TO THE UNITED
`
`
`STATES COURT OF APPEALS FOR THE NINTH CIRCUIT
`
`No. 15–278. Decided January 25, 2016
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` PER CURIAM.
`
`The Court considers for the second time the Ninth Cir-
`cuit’s determination that respondent stockholders’ com-
`plaint states a claim against petitioner fiduciaries for
`
`breach of the duty of prudence. The first time, the Court
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`vacated and remanded in light of Fifth Third Bancorp v.
`Dudenhoeffer, 573 U. S. ___ (2014), a case which set forth
`the standards for stating a claim for breach of the duty of
`prudence against fiduciaries who manage employee stock
`ownership plans (ESOPs). On remand, the Ninth Circuit
`reiterated its conclusion that the complaint states such a
`claim. The Court now reverses and remands.
`
`
`The stockholders are former employees of Amgen Inc.
`and its subsidiary Amgen Manufacturing, Limited, who
`
`participated in plans that qualified under 29 U. S. C.
`§1107(d)(3)(A) as eligible individual account plans. Like
`ESOPs, these plans offer ownership in employer stock as
`an option to employees. The parties agree that the deci-
`
`
`sion in Fifth Third is fully applicable to the plans at issue
`here. See 788 F. 3d 916, 935 (2014).
`
`All of the plans had holdings in the Amgen Common
`Stock Fund (composed, unsurprisingly, of Amgen common
`
`stock) during the relevant period. The value of Amgen
`
`stock fell, and in 2007, the stockholders filed a class action
`against petitioner fiduciaries alleging that they had
`breached their fiduciary duties, including the duty of
`prudence, under the Employee Retirement Income Secur-
`ity Act of 1974 (ERISA), 88 Stat. 829, as amended, 29
`U. S. C. §1001 et seq. The District Court granted the
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` Cite as: 577 U. S. ____ (2016)
`
`
`Per Curiam
`SUPREME COURT OF THE UNITED STATES
`
`
` AMGEN INC., ET AL. v. STEVE HARRIS, ET AL.
`ON PETITION FOR WRIT OF CERTIORARI TO THE UNITED
`
`
`STATES COURT OF APPEALS FOR THE NINTH CIRCUIT
`
`No. 15–278. Decided January 25, 2016
`
` PER CURIAM.
`
`The Court considers for the second time the Ninth Cir-
`cuit’s determination that respondent stockholders’ com-
`plaint states a claim against petitioner fiduciaries for
`
`breach of the duty of prudence. The first time, the Court
`
`vacated and remanded in light of Fifth Third Bancorp v.
`Dudenhoeffer, 573 U. S. ___ (2014), a case which set forth
`the standards for stating a claim for breach of the duty of
`prudence against fiduciaries who manage employee stock
`ownership plans (ESOPs). On remand, the Ninth Circuit
`reiterated its conclusion that the complaint states such a
`claim. The Court now reverses and remands.
`
`
`The stockholders are former employees of Amgen Inc.
`and its subsidiary Amgen Manufacturing, Limited, who
`
`participated in plans that qualified under 29 U. S. C.
`§1107(d)(3)(A) as eligible individual account plans. Like
`ESOPs, these plans offer ownership in employer stock as
`an option to employees. The parties agree that the deci-
`
`
`sion in Fifth Third is fully applicable to the plans at issue
`here. See 788 F. 3d 916, 935 (2014).
`
`All of the plans had holdings in the Amgen Common
`Stock Fund (composed, unsurprisingly, of Amgen common
`
`stock) during the relevant period. The value of Amgen
`
`stock fell, and in 2007, the stockholders filed a class action
`against petitioner fiduciaries alleging that they had
`breached their fiduciary duties, including the duty of
`prudence, under the Employee Retirement Income Secur-
`ity Act of 1974 (ERISA), 88 Stat. 829, as amended, 29
`U. S. C. §1001 et seq. The District Court granted the
`
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`2
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` AMGEN INC. v. HARRIS
`
`
`Per Curiam
`fiduciaries’ motion to dismiss, and the Ninth Circuit re-
`versed, Harris v. Amgen, Inc., 738 F. 3d 1026 (2013). The
`fiduciaries sought certiorari.
`While that petition was pending, this Court issued a
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`decision that concerned the duty of prudence owed by
`ERISA fiduciaries who administer ESOPs. That decision,
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`Fifth Third, held that such ERISA fiduciaries are not
`entitled to a presumption of prudence but are “subject to
`the same duty of prudence that applies to ERISA fiduciar-
`ies in general, except that they need not diversify the
`fund’s assets.” 573 U. S., at ___ (slip op., at 1–2).
`Notwithstanding the lack of a presumption of prudence,
`
`Fifth Third noted that “Congress sought to encourage the
`creation of ” employee stock-ownership plans, id., at ___
`(slip op., at 14), a purpose that the decision recognized
`may come into tension with ERISA’s general duty of pru-
`dence. Moreover, ESOP fiduciaries confront unique chal-
`lenges given “the potential for conflict” that arises when
`fiduciaries are alleged to have imprudently “fail[ed] to act
`on inside information they had about the value of the
`employer’s stock.” Id., at ___ (slip op., at 13). Fifth Third
`therefore laid out standards to help “divide the plausible
`sheep from the meritless goats,” id., at ___ (slip op., at 15):
`“To state a claim for breach of the duty of prudence on
`the basis of inside information, a plaintiff must plau-
`sibly allege an alternative action that the defendant
`could have taken that would have been consistent
`with the securities laws and that a prudent fiduciary
`in the same circumstances would not have viewed as
`more likely to harm the fund than to help it.” Id., at
`___ (slip op., at 18).
`It further clarified that courts should determine whether
`the complaint itself states a claim satisfying that liability
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`standard:
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`“[L]ower courts faced with such claims should also
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`3
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` Cite as: 577 U. S. ____ (2016)
`
`
`Per Curiam
`consider whether the complaint has plausibly alleged
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`that a prudent fiduciary in the defendant’s position
`could not have concluded that stopping purchases—
`which the market might take as a sign that insider fi-
`duciaries viewed the employer’s stock as a bad in-
`vestment—or publicly disclosing negative information
`would do more harm than good to the fund by causing
`a drop in the stock price and a concomitant drop in
`the value of the stock already held by the fund.” Id.,
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`at ___ (slip op., at 20) (emphasis added).
`
`In the matter that is once again before the Court here,
`following the issuance of Fifth Third, the Court granted
`the fiduciaries’ first petition for a writ of certiorari, va-
`cated the judgment, and remanded for further proceedings
`consistent with that decision. Amgen Inc. v. Harris, 576
`U. S. ___ (2014). On remand, the Ninth Circuit reversed
`again the dismissal of the complaint and denied the fidu-
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`ciaries’ petition for rehearing en banc. See 788 F. 3d 916.
`The fiduciaries once more sought certiorari.
`
`
`The Court now holds that the Ninth Circuit failed to
`properly evaluate the complaint. That court explained
`that its previous opinion (that is, the one it issued before
`Fifth Third was decided) “had already assumed” the
`standards for ERISA fiduciary liability laid out by this
`Court in Fifth Third. 788 F. 3d, at 940. And it reasoned
`that the complaint at issue here satisfies those standards
`because when “the federal securities laws require disclo-
`sure of material information,” it is “quite plausible” that
`removing the Amgen Common Stock Fund “from the list of
`investment options” would not “caus[e] undue harm to
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`plan participants.” Id., at 937–938. The Ninth Circuit,
`however, failed to assess whether the complaint in its
`current form “has plausibly alleged” that a prudent fiduci-
`ary in the same position “could not have concluded” that
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`the alternative action “would do more harm than good.”
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` AMGEN INC. v. HARRIS
`
`
`Per Curiam
`Fifth Third, supra, at ___ (slip op., at 20).
`
`The Ninth Circuit’s proposition that removing the
`Amgen Common Stock Fund from the list of investment
`options was an alternative action that could plausibly
`have satisfied Fifth Third’s standards may be true. If so,
`the facts and allegations supporting that proposition
`should appear in the stockholders’ complaint. Having
`examined the complaint, the Court has not found suffi-
`cient facts and allegations to state a claim for breach of
`the duty of prudence.
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`Although the Ninth Circuit did not correctly apply Fifth
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`Third, the stockholders are the masters of their complaint.
`The Court leaves to the District Court in the first instance
`whether the stockholders may amend it in order to ade-
`quately plead a claim for breach of the duty of prudence
`guided by the standards provided in Fifth Third.
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`The petition for certiorari is granted. The judgment of
`the Ninth Circuit is reversed, and the case is remanded for
`further proceedings consistent with this opinion.
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`It is so ordered.
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`4
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