Facts

The Iron Workers Mid-South Pension Fund filed a shareholder derivative action on behalf of U.S. Bancorp against several of U.S. Bancorp's current and former officers and directors, including Richard Davis, Andrew Cecere, Patrick Stokes, O'Dell Owens, Jerry Levin, Victoria Gluckman, David O'Maley, Arthur Collins, Joel Johnson, Craig Schnuck, Olivia Kurtley, Douglas Baker, Y. Marc Belton,and Richard Reiten.

Plaintiff Iron, a pension fund, held U.S. Bancorp stock at the time of the alleged wrongdoing.

PLAINTIFF'S CONTENTIONS:
Plaintiff contended that defendants breached various contractual and statutory duties as trustee. As a result, U.S. Bancorp now faced at least two class actions filed by investors in the trusts. Plaintiff contended that the officers and directors failed to oversee the bank's performance as trustee. As a result of their lack of internal control, the bank faced substantial losses and suffered reputational harm. Plaintiff also asserted causes of action for waste and unjust enrichment. Plaintiff argued that defendants received compensation from the bank while they were breaching their fiduciary duties.

DEFENDANTS' CONTENTIONS:
Defendants filed a motion to dismiss plaintiff's breach of fiduciary claim for lack of standing. Defendants claimed that plaintiff failed to make a proper demand on the Board before filing this derivative action. Defendants also contended that plaintiff failed to plausibly allege that they consciously or knowingly disregarded their oversight duties. Moreover, defendants contended that plaintiff's alleged damages were overly speculative. Defendants likewise filed a motion to dismiss plaintiffs' waste and unjust enrichment claims.

Result

U.S. District Judge John R. Tunheim rejected defendants' motion to dismiss for lack of standing, holding that plaintiff made a proper demand that was wrongfully refused. The court ruled that plaintiff could proceed derivatively. The court granted defendants' motion to dismiss plaintiff's breach of fiduciary claim without prejudice on the grounds that plaintiff did not adequately allege that defendants consciously or knowingly failed in its oversight duties. The court gave plaintiff time to file an amended complaint for its breach of fiduciary duty claim. The court dismissed plaintiff's waste and unjust enrichment claims with prejudice for failing to state a claim.