In September 2009, a group of its former employees and current 401(k) participants file a class action lawsuit against Fifth Third and its corporate officers (in their capacity as administrators of the 401(k)), alleging that they violated their ERISA-mandated fiduciary duty under ERISA.

The employees alleged that a prudent fiduciary acting in good faith stewards of the ESOP's assets should have taken steps to address this overvaluation or protect the plan participants from the risks.

The District Court ruled that the 401(k) plan administrators were entitled to a 'presumption of prudence' with respect to their decision to continue buying and holding their own company's stock.

Writing for a unanimous court, Justice Stephen Breyer determined that administrators of ESOPs are not entitled to a special 'presumption of prudence' with respect to their decision-making.

The Supreme Court accepted the petitioners' argument that allowing lawsuits against ESOP fiduciaries may discourage employers from offering ESOP plans in the first place (thus contravening Congress's intent), but resolved the dilemma by creating guidelines for lower courts to apply in future cases at the motion to dismiss stage.