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A federal appeals court on Thursday partially reinstated a lawsuit alleging that the University of Pennsylvania and its officials failed to perform their fiduciary duties in how they managed Penn's 403(b) pension funds for employees. The decision by the U.S. Court of Appeals for the Third Circuit came in a lawsuit in which a group of current and former employees accused Penn administrators of breaching their fiduciary duty and engaging in prohibited transactions in their management of pension funds, one of numerous such suits brought against major universities by a law firm in St. Louis.
A lower federal court dismissed the plaintiffs' suit against Penn in 2017, but in its ruling Thursday, a divided three-judge panel of the Third Circuit reinstated two of the seven claims, finding that the plaintiffs had stated plausible enough claims that a court should decide them on their merits.
Most of the major higher education associations had filed amicus briefs asking the appeals court to uphold dismissal of the case.
