In 2017, a judge in the U.S. District Court for the Eastern District of Pennsylvania dismissed the case. The plaintiffs failed to state a claim, the court said, relying on a 2011 ruling in an ERISA case by the Third Circuit Court of Appeals in Renfro v. Unisys Corp, and a 2007 Supreme Court decision in a non-ERISA case that addressed pleading standards, Bell Atlantic Corp. v. Twombly.

But in May of this year, the Third Circuit Court of Appeals issued a split decision in favor of the employees in Penn's plan, arguing, in part, that the higher pleading standard the Supreme Court established in Twombly is specific and limited to antitrust cases, and does not apply to ERISA claims.

In its petition for review by the Supreme Court, attorneys for Penn's fiduciaries argue that the Supreme Court has rejected the idea that the pleading standard in the Twombly case be limited to antitrust cases.

In a 2014 decision in an ERISA stock-drop case—Fifth Third Bancorp v. Dudenhoeffer—the Supreme Court specifically said the pleading standard in Twombly should be applied to ERISA claims, argue the plaintiffs in their petition.

"The Second, Seventh, Eighth, and Ninth Circuits have all recognized that Twombly fully applies to these ERISA claims. And it is no accident that decisions in those four circuits have also dismissed complaints resting on the sorts of allegations that the Third Circuit allowed past the pleading stage here," according to the petition.

Earlier this year, the Supreme Court declined to review another 403(b) case, Munro v. USC.

But that petition to the High Court was based on an entirely separate question related to arbitration agreements, and was not related to the pleading standards in ERISA claims.

The Penn claim is accompanied by a significant Circuit split on the basic question of what claims are required for a complaint to survive to the discovery phase. Often, Supreme Court will hear cases that resolve different interpretations of the law between circuits.

"This Court should grant certiorari to reaffirm Twombly's applicability and resolve the numerous circuit splits created by the Third Circuit. ERISA's promise of 'uniform standards of primary conduct' cannot be fulfilled when courts treat identical allegations differently under inconsistent pleading standards," attorneys for Penn argue.

Six universities have settled claims after losing their motions to dismiss, for an average of $11 million. Attorneys for Penn insinuate those settlements are not a concession of fault, but are advanced to avoid expensive and lengthy litigation.

Two settlements came after the Third Circuit reversed the lower court's decision in the Penn case. "More will follow if that decision stands," argue Penn's attorneys.