Peabody v. Davis’s Empirical Analysis

Citation profile

6 federal appellate · 1 district ·

Most-quoted passages

The sentences later courts lift from this opinion, ranked by how many decisions quote each — the parts of the opinion doing the work. These counts are smaller than the citation total above because most of the 18 citing decisions cite the case generally; a passage count includes only decisions quoting that exact language verbatim.

1. “[t]he duty of an ERISA trustee to behave prudently in managing the trust’s assets, which in this case consisted of the assets of the ESOP, is fundamental. This is true even though, by the very nature of an ESOP, the trustee does not have a general duty to diversify, though such a duty can arise in special circumstances. [citing Steinman ]. The duty to diversify is an essential element of the ordinary trustee’s duty of prudence, given the risk aversion of trust beneficiaries, but the absence of any general such duty from the ESOP setting does not eliminate the trustee’s duty of prudence. If anything, it demands an even more watchful eye, diversification not being in the picture to buffer the risk to the beneficiaries should the company encounter adversity. There is a sense in which, because of risk aversion, an ESOP is imprudent per se, though legally authorized. This built-in “imprudence” (for which the trustee is of course not culpable) requires him to be especially careful to do nothing to increase the risk faced by the participants still further.”

   1 later decision quote this exact passage · from the majority
   e.g. 819 F. Supp. 2d 1264 - Smith v. Williams