The European Union suspended its dispute against China at the World Trade Organization over a de facto trade embargo against Lithuania.
The Geneva-based trade body circulated a note late Friday to its members saying the EU had requested to “immediately suspend its proceedings” with China.
“This is a procedural step taken for technical reasons related to the need to assess certain elements arising from the preparation of written submissions,” Olof Gill, the European Commission’s spokesperson, said on Saturday. The panel is suspended “for the time being,” he added.
Brussels formally launched its WTO dispute in early 2022 after Beijing imposed trade restrictions against Lithuania in late 2021 because Vilnius deepened its ties with Taiwan, which China sees as a breakaway province.
The case dealt a blow to the relations between Beijing and Brussels, with the EU accusing China of discrimination and coercion against its eastern member Lithuania.
The high-profile case also motivated Brussels to boost its own trade arsenal, with tools such as the anti-coercion instrument, which effectively allows the European Commission to investigate whether economic coercion has taken place against an EU country and to propose countermeasures.
A year ago, the WTO granted a EU request to escalate the dispute to set up a panel, which effectively put the matter in the hands of judges. Under WTO rules, the EU now has one year to resume the dispute, otherwise the process lapses and the proceedings will stop.
<img src="https://api.follow.it/track-rss-story-loaded/v1/wzAtiIbvutE5AxJduHYmsHn9ye8UNv30" border=0 width="1" height="1" alt="Justices clarify pleading rules for retirement-plan litigation" title="Justices clarify pleading rules for retirement-plan litigation"> <img width="150" height="150" src="https://www.scotusblog.com/wp-content/uploads/2025/04/supremecourt-3-scaled-1-150x150.jpeg" class="attachment-thumbnail size-thumbnail wp-post-image" alt="Justices clarify pleading rules for retirement-plan litigation" title="Justices clarify pleading rules for retirement-plan litigation" style="float:right;" decoding="async" srcset="https://www.scotusblog.com/wp-content/uploads/2025/04/supremecourt-3-scaled-1-150x150.jpeg 150w, https://www.scotusblog.com/wp-content/uploads/2025/04/supremecourt-3-scaled-1-570x570.jpeg 570w, https://www.scotusblog.com/wp-content/uploads/2025/04/supremecourt-3-scaled-1-500x500.jpeg 500w, https://www.scotusblog.com/wp-content/uploads/2025/04/supremecourt-3-scaled-1-1000x1000.jpeg 1000w" sizes="(max-width: 150px) 100vw, 150px" /><p><a class="a2a_button_facebook" href="https://www.addtoany.com/add_to/facebook?linkurl=https%3A%2F%2Fwww.scotusblog.com%2F2025%2F04%2Fjustices-clarify-pleading-rules-for-retirement-plan-litigation%2F&linkname=Justices%20clarify%20pleading%20rules%20for%20retirement-plan%20litigation" title="Facebook" rel="nofollow noopener" target="_blank"></a><a class="a2a_button_linkedin" href="https://www.addtoany.com/add_to/linkedin?linkurl=https%3A%2F%2Fwww.scotusblog.com%2F2025%2F04%2Fjustices-clarify-pleading-rules-for-retirement-plan-litigation%2F&linkname=Justices%20clarify%20pleading%20rules%20for%20retirement-plan%20litigation" title="LinkedIn" rel="nofollow noopener" target="_blank"></a><a class="a2a_button_twitter" href="https://www.addtoany.com/add_to/twitter?linkurl=https%3A%2F%2Fwww.scotusblog.com%2F2025%2F04%2Fjustices-clarify-pleading-rules-for-retirement-plan-litigation%2F&linkname=Justices%20clarify%20pleading%20rules%20for%20retirement-plan%20litigation" title="Twitter" rel="nofollow noopener" target="_blank"></a><a class="a2a_button_email" href="https://www.addtoany.com/add_to/email?linkurl=https%3A%2F%2Fwww.scotusblog.com%2F2025%2F04%2Fjustices-clarify-pleading-rules-for-retirement-plan-litigation%2F&linkname=Justices%20clarify%20pleading%20rules%20for%20retirement-plan%20litigation" title="Email" rel="nofollow noopener" target="_blank"></a><a class="a2a_button_printfriendly" href="https://www.addtoany.com/add_to/printfriendly?linkurl=https%3A%2F%2Fwww.scotusblog.com%2F2025%2F04%2Fjustices-clarify-pleading-rules-for-retirement-plan-litigation%2F&linkname=Justices%20clarify%20pleading%20rules%20for%20retirement-plan%20litigation" title="PrintFriendly" rel="nofollow noopener" target="_blank"></a><a class="a2a_dd addtoany_no_icon addtoany_share_save addtoany_share" href="https://www.addtoany.com/share#url=https%3A%2F%2Fwww.scotusblog.com%2F2025%2F04%2Fjustices-clarify-pleading-rules-for-retirement-plan-litigation%2F&title=Justices%20clarify%20pleading%20rules%20for%20retirement-plan%20litigation" data-a2a-url="https://www.scotusblog.com/2025/04/justices-clarify-pleading-rules-for-retirement-plan-litigation/" data-a2a-title="Justices clarify pleading rules for retirement-plan litigation">Share</a></p><p><em>Cunningham v. Cornell University</em> will not go into the history books as one of the most important 30 decisions of the 2024-25 term. The case involves a technical problem about pleading standards under the Employee Retirement Income Security Act, and the court’s resolution of the problem was, in a word, technical.</p>
<p>ERISA establishes a series of detailed rules to deal with retirement plans, much of which tracks traditional rules of trust law. Among those rules, not surprisingly, is a rule that prevents any transaction between the plan and an insider of the plan. To be specific, the rule (in Section 1106) says that, “[e]xcept as provided in Section 1108,” the fiduciary of the plan “shall not cause the plan to [transact with a] party in interest.” Section 1108, in turn, has an exemption that permits “reasonable arrangements with a party in interest … if no more than reasonable compensation is paid therefor.”<span id="more-319823"></span></p>
<p>The problem is that the definition of “party in interest” is quite broad, including among other things all entities “providing services to [the] plan.” To read Section 1106 with that definition in mind, you would conclude that it violates Section 1106 to transact with any entity that is providing services to the plan. In this case, for example, beneficiaries sued Cornell to complain about transactions with Fidelity and the Teachers Insurance Annuity Association.</p>
<p>The question the courts are grappling with is whether the beneficiaries can state a complaint merely by alleging that Cornell has violated Section 1106 itself – by transacting with somebody from whom it is buying services – or whether they also must allege that the transaction is not protected by Section 1108, perhaps because compensation for those services is unreasonably high.</p>
<p>Justice Sonia Sotomayor’s <a href="https://www.supremecourt.gov/opinions/24pdf/23-1007_h3ci.pdf">opinion</a> picks the first approach. She explains that the relevant part of Section 1106 includes three elements: (1) causing the plan to engage in a transaction; (2) that “constitutes … furnishing of … services”; (3) “between the plan and a party in interest.” She observes that the exemptions for reasonably priced transactions are “set forth in a different part of the statute” and so “do not impose additional pleading requirements to set out a … claim.” She says that the proper method of proceeding is for the plaintiff to point to the transaction with the service provider, and for the service provider in turn to point out any particular exemption that might protect it.</p>
<p>Sotomayor relies on a “well settled general rule of statutory construction that the burden of proving … exemption … to the prohibitions of a statute generally rests on one who claims its benefits.” For her, the exceptions in Section 1108 are “written in the orthodox format of an affirmative defense,” and so “must be pleaded and proved by the defendant who seeks to benefit from them.” She relies heavily on “[s]tructural considerations,” noting that Section 1108 has more than 20 separate exceptions from the standard rules in Section 1106. It would make no sense to require a plaintiff, in every case, to disprove each of those exceptions, as “fairness usually requires that the adversary give notice of the particular exception upon which it relies and therefore that it bear the burden of pleading” the particular exception.</p>
<p>The most important part of the opinion is the last few pages, where Sotomayor grapples with the reality that the court has validated a rule that will allow a plaintiff to survive a motion to dismiss merely by alleging that a plan fiduciary has purchased something from an entity from whom it purchases things. She acknowledges that concerns about such a low threshold are “serious,” but she suggests three tools courts should use to mitigate them. First, district courts under Rule 7 could require the plaintiff to file a reply including “specific, nonconclusory factual allegations” to rebut any exemption that the defendant might interpose. Second, courts would be free to dismiss a suit that failed to identify any injury from the transaction – and there would be no injury if the transactions were reasonably priced. Third, “in cases where an exemption obviously applies, … Rule 11 may permit a district court to impose sanctions” on the plaintiff and its counsel.</p>
<p>The justices needed to resolve this case because lower courts had offered differing solutions to the conundrum, and pleading standards for ERISA should be the same nationwide. I doubt it will have broad significance in the future, but it will offer a useful roadmap for trial courts having to deal with these cases on the ground. I suspect that is the reason the case was assigned to Sotomayor, a former trial judge.</p>
<p>The post <a href="https://www.scotusblog.com/2025/04/justices-clarify-pleading-rules-for-retirement-plan-litigation/">Justices clarify pleading rules for retirement-plan litigation</a> appeared first on <a href="https://www.scotusblog.com">SCOTUSblog</a>.</p>
