The U.S. Supreme Court on Monday declined to hear AT&T’s challenge to an appellate court’s ruling of a prohibited transaction in a defined contribution plan, allowing the remand of Bugielski et al. v. AT&T Services Inc. et al. back to the district court level to proceed.

The justices did not comment on the case, which centered on prohibited transactions under the Employee Retirement Income Security Act. Several industry groups filed an amicus brief urging the Supreme Court to hear an appeal of the case, which has been in litigation since 2017.

The initial 2017 complaint alleged that AT&T breached its fiduciary duty when it added brokerage and advisory services from Fidelity Investments in 2012 and 2014 without evaluating or disclosing the compensation paid to Fidelity after adding the services.

The case, filed in U.S. District Court for the Central District of California, was initially decided in favor of AT&T by the district judge, who granted summary judgment and wrote that Fidelity received third-party compensation and the plan itself was not a party, meaning AT&T was not required to evaluate and disclose it.

The U.S. 9th Circuit Court of Appeals remanded the case back to the lower court in August 2023, ruling that the compensation was, in fact, a prohibited transaction because AT&T added optional services to the plan paid by participant fees.

“Because the district court did not correctly apply the relevant substantive law to Plaintiffs’ prohibited-transaction and duty-of-prudence claims, we reverse and remand for it to do so,” the 9th Circuit’s ruling stated.

ERISA bars transactions that involve improper contracts, high-risk dealings with plan assets, self-dealing by fiduciaries or agreements that improperly shift fiduciary duties to third parties.

However, ERISA allows certain exemptions, permitting defined contribution plans to engage in specific transactions with parties-in-interest—such as fiduciaries, plan executives or service providers.

Earlier this month, the Supreme Court unanimously ruled in favor of Cornell University employees’ claims that the university’s plan fiduciaries paid excessive recordkeeping fees in the school’s defined contribution plans. Some in the industry suggested the decision in Cunningham v. Cornell University could lead to a of prohibited transaction litigation.

Bugielski v. AT&T, meanwhile, will return to the Central District of California.