Syllabus

NOTE: Where it is feasible, a syllabus (headnote) will be released, as is being done in connection with this case, at the time the opinion is issued. The syllabus constitutes no part of the opinion of the Court but has been prepared by the Reporter of Decisions for the convenience of the reader. See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337.

SUPREME COURT OF THE UNITED STATES

Syllabus CUNNINGHAM ET AL. v. CORNELL UNIVERSITY ET AL. CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT

No. 23–1007. Argued January 22, 2025—Decided April 17, 2025 The Employee Retirement Income Security Act of 1974 (ERISA) prohib- its plan fiduciaries from causing a plan to engage in certain transac- tions with parties in interest. 29 U. S. C. §1106. A separate provision, §1108(b)(2)(A), exempts from these prohibitions any transaction that involves “[c]ontracting or making reasonable arrangements with a party in interest for office space, or legal, accounting, or other services necessary for the establishment or operation of the plan, if no more than reasonable compensation is paid therefor.” The question pre- sented is whether, to state a claim under §1106, a plaintiff must plead that §1108(b)(2)(A) does not apply to an alleged prohibited transaction. Petitioners represent a class of current and former Cornell Univer- sity employees who participated in two defined-contribution retire- ment plans from 2010 to 2016. In 2017, they sued Cornell and other plan fiduciaries for allegedly causing the plans to engage in prohibited transactions for recordkeeping services with the Teachers Insurance and Annuity Association of America-College Retirement Equities Fund and Fidelity Investments Inc., in violation of §1106(a)(1)(C). Pe- titioners claimed the plans paid these service providers substantially more than reasonable recordkeeping fees. The District Court dis- missed the prohibited-transaction claim, and the Second Circuit af- firmed. The Second Circuit held that §1108(b)(2)(A) is incorporated into §1106(a)’s prohibitions, requiring plaintiffs to plead that a trans- action was “unnecessary or involved unreasonable compensation” to survive a motion to dismiss. 86 F. 4th 961, 975. Held: To state a claim under §1106(a)(1)(C), a plaintiff need only plausi- bly allege the elements contained in that provision itself, without ad- dressing potential §1108 exemptions. Pp. 6–15. 2 CUNNINGHAM v. CORNELL UNIV.

Syllabus

(a) Section 1106(a)(1)(C) contains three elements: It prohibits fidu- ciaries from (1) “caus[ing a] plan to engage in a transaction” (2) that the fiduciary “knows or should know . . . constitutes a direct or indirect . . . furnishing of goods, services, or facilities” (3) “between the plan and a party in interest.” Its bar is categorical and does not remove from its scope transactions that were necessary or involved reasonable compen- sation. The exemptions in §1108 do not impose additional pleading requirements for §1106(a)(1) claims. When a statute has “exemptions laid out apart from the prohibitions,” and the exemptions “expressly refe[r] to the prohibited conduct as such,” the exemptions ordinarily constitute “affirmative defense[s]” that are “entirely the responsibility of the party raising” them. Meacham v. Knolls Atomic Power Labora- tory, 554 U. S. 84, 91, 95. Like the exemptions at issue in Meacham, the §1108 exemptions are structured as affirmative defenses that must be pleaded and proved by defendants who seek to benefit from them. Pp. 6–8. (b) Respondents’ contrary arguments are unpersuasive. First, the “[e]xcept as provided in section 1108” language in §1106(a) does not