A New Jersey federal district court recently granted summary judgment in defendants’ favor in an ERISA excessive fee case accusing Evonik’s 401(k) plan fiduciaries of keeping imprudent investments in the plan and of allowing participants to pay excessive recordkeeping fees. Harris, et al. v. Evonik Corp., et al., No. 20-02202, 2024 U.S. Dist. LEXIS _____ (D.N.J.
ERISA Litigation Advisor
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Second Circuit Weighs in Against ERISA Arbitration
Recently, the Second Circuit became the latest circuit refusing to enforce individual arbitration of an ERISA class action, joining the Third, Seventh, and Tenth Circuits. The Ninth Circuit, by contrast, has held that class action ERISA claims brought on behalf of plans are subject to individual arbitration, with relief limited to the individual plaintiff’s claims.…
Where Does the End of Chevron Deference Leave ERISA?
For the last 40 years, judges were required to defer to administrative agencies’ reasonable interpretations of ambiguous federal statutes under Chevron v. Natural Resources Defense Council. The Supreme Court upended that precedent in Friday’s 6-3 ruling in Loper Bright Enters. v. Raimondo, which overturned Chevron and instructs judges to rely on their own judgment in…
Conflicting Decisions Foreshadow Upcoming Disputes in ERISA 401(K) Forfeiture Class Actions
Conflicting orders on motions to dismiss from two California courts foreshadow issues for a new theory of ERISA liability. Employers have faced a recent wave of novel ERISA class actions that challenge the reallocation of defined contribution plan forfeitures. Such plans often include provisions requiring participants to work for the employer for a defined period…
SCOTUS Declines Review of Fourth Circuit ERISA Surcharge Ruling
California District Court Dismisses Conclusory ERISA “Fee” Complaint Unsupported by Facts
A California federal court recently granted an employer win in an ERISA excessive fee case when it dismissed a proposed class action brought by an ex-employee of Schenker, Inc., a transportation logistics company. Partida v. Schenker Inc., No. 22-cv-09192-AMO, 2024 U.S. Dist. LEXIS 58297 (N.D. Cal. Mar. 29, 2024). In the past few years, hundreds…
SDNY Denies Leave to Amend ERISA Complaint with “Substantively the Same Defects” as Dismissed Complaint
A New York federal court recently denied former hospital employees’ request for leave to file a Third Amended Complaint (“TAC”) after dismissing their Second Amended Complaint (“SAC”) for lack of standing and failure to state a claim. Boyette v. Montefiore Medical Ctr., No. 22-cv-5280 (JGK), 2024 U.S. Dist. LEXIS 63150, at *1 (S.D.N.Y. Apr. 5,…
Fourth Circuit Affirms Aon’s Trial Victory in Investment Suit
The Fourth Circuit affirmed Aon Hewitt Investment Consulting’s trial victory in a 250,000-member class action suit alleging that Aon breached ERISA’s fiduciary duties.
Aon was initially the Lowe’s 401(k) plan’s investment advisor and later was engaged as the plan’s 3(38) delegated fiduciary. The plaintiffs’ fiduciary breach claims alleged that, after being retained as a delegated…
Third Circuit Rejects Mandatory Arbitration Clause in ESOP
The Third Circuit refused to enforce a mandatory arbitration clause with a class action waiver in an ESOP, finding that the class action waiver deprived participants of statutory rights. The ESOP plan added the clause at issue in 2017. When plaintiffs filed a putative class action in 2019 asserting fiduciary breach and prohibited transaction claims,…
Ads Related to Health Plan Fees Raise Questions on the Next Excessive Fee Suit Targets
Is a new wave of ERISA fiduciary litigation targeting group health plan sponsors on the horizon? There have already been a few examples of health plan fee cases, such as claims challenging the billing practice between insurers and their subcontractors or challenging commissions paid in connection with multi-employer plans. Recent advertisements by the class action…