The Supreme Court recently granted the writ of certiorari requested by Northwestern University retirement plan participants, following the Solicitor General’s plea for the Court to hear the case. Hughes v. Northwestern Univ., No. 19-1401, 2021 U.S. LEXIS 3583 (July 2, 2021). The certiorari petition phrased the question presented as: “[w]hether allegations that a defined-contribution retirement plan paid or charged its participants fees that substantially exceeded fees for alternative available investment products or services are sufficient…

ERISA Litigation Advisor

Predecessor Employer Defeats Proposed Class Action Challenging Spin Off’s Decision to Cut Benefits

By Sarah J. Gasperini & René E. Thorne

July 13, 2021

In Bellon v. PPG Emp. Life & Other Benefits Plan, PPG Industries, Inc. & the PPG Plan Administrator, the Northern District of West Virginia recently addressed whether a predecessor company may be held liable for a decision made by its corporate successor to terminate retiree life insurance coverage and related benefits following spin-off. The retiree plaintiffs asserted that company-provided life insurance coverage was wrongly terminated after their former employer, defendant PPG, spun off its commodity…

ERISA Litigation Advisor

ERISA 401(k) Performance and Fee Litigation Dismissed for Failure to Provide Comparable Benchmark

By Stacey C.S. Cerrone & Alicia Chiu

July 13, 2021

The District Court for the Southern District of Iowa recently dismissed an ERISA putative class action lawsuit challenging 401(k) performance and fees after plan participants failed to identify appropriate benchmarks in their complaint. The court reinforced the Eighth Circuit’s standards for stating such claims, requiring that the plaintiffs allege facts establishing “a meaningful benchmark for assessing the performance of the challenged funds.” In particular, the court highlighted the Eighth Circuit’s requirement to identify a comparable…

ERISA Litigation Advisor

Butch Lewis Brings No Good News for Contributing Employers

By Paul A. Friedman

June 23, 2021

In the clamor that surrounded the current administration’s adoption of the American Rescue Act of 2021 (ARPA), quietly tucked in as Subtitle H is the Butch Lewis Emergency Pension Plan Relief Act of 2021 (Butch Lewis). Butch Lewis has been unsuccessfully bouncing around Congress since 2019. While Butch Lewis is long on rhetoric, at this juncture it is lacking in details or controls. Pension Benefit Guarantee Corporation (PBGC) regulations will be issued sometime in July.…

ERISA Litigation Advisor

Tenth Circuit Affirms Damages Based on Revenue Credit, and Makes Clear That Arms-Length Service Agreements Without Evidence of A Prior Relationship Are Not Prohibited Transactions

By René E. Thorne & Dorothy Parson McDermott

June 21, 2021

On appeal following a bench trial of claims brought by a class of participants and beneficiaries of a 401(k) plan, the Tenth Circuit affirmed the decision of the District of Colorado calculating damages and prejudgment interest, denying injunctive relief, and finding the employer did not engage in a “prohibited transaction” under ERISA Section 406, 29 U.S.C. § 1106. Ramos v. Banner Health, No. 20-1231 (10th Cir. June 11, 2021). At trial, the district court…

ERISA Litigation Advisor

Administrative Exhaustion Is Required Even When Not Mentioned in Plan

By Stacey C.S. Cerrone & Michael C. Mohler

June 4, 2021

The Eastern District of Missouri recently examined whether administrative exhaustion is a prerequisite to an ERISA suit alleging a wrongful denial of employee benefits, where the benefit plan’s language did not include an administrative appeal procedure and the denial letter included only permissive language stating that the claimant “may request a review” of the denial. Ultimately, the Court focused on the Eighth Circuit’s “sound policy of not wanting courts to review plan administrators’ decisions based…

ERISA Litigation Advisor

U.S. Bancorp Defeats Class Certification in Challenge to Early Retirement Benefits

By Stacey C.S. Cerrone & Juan C. Obregon

June 1, 2021

The District Court of Minnesota declined to certify a class of pensioners seeking to challenge their plan’s early retirement calculations. ERISA requires early retirement benefits to be actuarially equivalent to what participants would receive at their normal retirement age. For participants collecting retirement benefits before age 65 (known as the “Early Commencement Factor” or “ECF”), the plan required a reduction of their monthly benefit, expressed as a percentage of the normal benefit that the participant…

ERISA Litigation Advisor

Third Circuit to Consider Class Certification Issues Percolating in ERISA Fee Litigation

By Stacey C.S. Cerrone & Lindsey H. Chopin

May 24, 2021

The Third Circuit will review a Pennsylvania district court’s decision to certify a 60,000+ person class in an ERISA fiduciary breach lawsuit claiming mismanagement of a defined contribution plan’s investments and recordkeeping fees. This appeal queues up guidance on a hotly litigated issue in recent ERISA cases: can defined contribution plan participants challenge the prudence and loyalty of retaining a plan investment option they never invested in? For example, in Boley, the named plaintiffs collectively…

ERISA Litigation Advisor

401(k) Investment Option Challenge Heads to Ninth Circuit

By Stacey C.S. Cerrone & Lindsey H. Chopin

May 18, 2021

Recently, in Davis v. Salesforce.com, a California district court dismissed for the second time claims alleging that the defendant 401(k) plan fiduciaries breached their ERISA fiduciary duties by retaining overpriced and underperforming investment options on the plan’s investment menu. Our previous post on that dismissal is available here. That decision is one in a deluge of similar, recent rulings setting forth differing and sometimes discordant opinions on what is required to state a plausible…

ERISA Litigation Advisor

California District Court Again Dismisses ERISA Lawsuit Challenging 401(k) Plan’s Fees

By Stacey C.S. Cerrone & John W. Sulau

May 10, 2021

The Northern District of California dismissed with prejudice a lawsuit alleging a 401(k) plan’s sponsor and fiduciaries included unreasonably expensive funds in the plan’s investment lineup. The court previously dismissed the plaintiffs’ claims without prejudice, finding their complaint failed to plead facts from which the court could infer the defendants breached their fiduciary duties. In response, the plaintiffs filed an amended complaint. The court held that the plaintiffs’ amended complaint suffered from the same infirmities…

ERISA Litigation Advisor

News and Insights on the latest ERISA litigation trends for employers

Blog Authors

Supreme Court Will Hear Case Challenging Retirement Plan Investment and Recordkeeper Fees

Predecessor Employer Defeats Proposed Class Action Challenging Spin Off’s Decision to Cut Benefits

ERISA 401(k) Performance and Fee Litigation Dismissed for Failure to Provide Comparable Benchmark

Butch Lewis Brings No Good News for Contributing Employers

Tenth Circuit Affirms Damages Based on Revenue Credit, and Makes Clear That Arms-Length Service Agreements Without Evidence of A Prior Relationship Are Not Prohibited Transactions

Administrative Exhaustion Is Required Even When Not Mentioned in Plan

U.S. Bancorp Defeats Class Certification in Challenge to Early Retirement Benefits

Third Circuit to Consider Class Certification Issues Percolating in ERISA Fee Litigation

401(k) Investment Option Challenge Heads to Ninth Circuit

California District Court Again Dismisses ERISA Lawsuit Challenging 401(k) Plan’s Fees

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