Assessing Courts’ ERISA Decisions in 2018

Some 83,000 lawsuits have been filed under the Employee Retirement Income Security Act (ERISA) in federal district court since 2009, according to Lex Machina, a LexisNexis company; fewer than 2% of cases proceed to trial.

Collected below is a run-down of some of the more important trial decisions from 2018. These cases help set the stage for litigation in 2019; ERISA experts anticipate another busy year.

Chevron Plaintiffs Make One More Attempt to Win ERISA Challenge

In a case that alleges, among other things, that defendants breached their ERISA duties by offering a money market fund rather than a stable value fund as a capital preservation option, plaintiffs say the 9th Circuit imposed strict pleading standards that conflict with its own decisions as well as those of other circuits. Read more.

Most Counts Against GE Allowed to Proceed in ERISA Lawsuit

The text of a new ruling on GE defendants’ summary dismissal motion steps through complex issues of timeliness that are being tested in other ongoing ERISA cases. Read more.

9th Circuit Questions Meaning of ‘Actual Knowledge’ for ERISA Statute of Limitations

The appellate court sent a case over Intel’s use of alternative investments in its target-date funds back to a lower court for review. Read more.

Do Cases Questioning Mortality Tables Used to Determine DB Plan Benefits Indicate a New Trend?

Cases have been filed against MetLife, Pepsi and American Airlines saying the use of outdated mortality tables in determining annuity payments causes retirees to lose part of their vested retirement benefits. Read more.

IBM Stock Drop Litigation Revived by 2nd Circuit

The decision breaks from other cases in which district and appellate judges have found plaintiffs did not meet strict pleading standards established by the influential Dudenhoeffer decision. Read more.

Stock-Drop Lawsuit Targeting IBM Revived and Remanded

An appellate court has taken the rare step of overturning a successful motion to dismiss a stock drop lawsuit targeting IBM. Read more.

USC Asks Supreme Court to Weigh in on Arbitration of Retirement Plan Claims

The 9th U.S. Circuit Court of Appeals previously concluded that the challenge to the management of the University of Southern California’s retirement plans fell outside the scope of the arbitration agreements because the claims were brought on behalf of the plans, not the individuals. Read more.

Court Tosses Unreasonable Recordkeeping Fee Claim Against Franklin Templeton

However, a federal district judge moved forward most claims in the self-dealing lawsuit concerning the company’s own 401(k) plan. Read more.

District Court Returns Mixed Ruling for AT&T ERISA Lawsuit

In a mixed ruling, the court again leaves room for re-pleading of the plaintiffs’ failed arguments, making the filing of a third amended complaint likely before any allegations can advance to trail. Read more.

Putnam Asks for Stay in Self-Dealing Case to Seek Supreme Court Input

The question for the Supreme Court is whether the plaintiff or the defendant bears the burden of proof on loss causation under Employee Retirement Income Security Act (ERISA) Section 409(a). Read more.

Court Deems Principal Not a Fiduciary in Lawsuit Over GICs

The court granted the Principal defendants’ motion for summary judgment on all counts in a case questioning guaranteed investment contract arrangements. Read more.

Whole Foods Again Defeats Stock Drop Litigation on Appeal

As in other recent stock drop litigation decisions, the plaintiff here ultimately failed to jump the high hurdle for standing set by Fifth-Third vs. Dudenhoeffer. Read more.

Court Finds All Claims Plausible in T. Rowe Price Self-Dealing Suit

The original complaint accuses T. Rowe Price 401(k) plan trustees of breaching their fiduciary duties under ERISA by either failing to remedy their predecessors’ breaches, or, in a few cases of offering expensive retail class versions of proprietary mutual funds, waiting too long to act to shift into lower cost versions of the funds. Read more.

Plaintiff Again Fails to Prove Standing in Voya Stable Value Challenge

Voya successfully moved to dismiss the amended claims under Rule 12(b)(6), arguing that the claims should be dismissed because they fail to plausibly allege the firm actually took a spread on certain separate account assets in question. Read more.

8th Circuit Affirms Dismissal of Wells Fargo Self-Dealing Suit

For one thing, the appellate court noted that the plaintiff did not use a sufficient benchmark to show that Wells Fargo’s TDFs were an imprudent investment for its 401(k) plan. Read more.

NYU Claims Victory in 403(b) Plans Lawsuit

In the first university 403(b) plans case to go to trial, a federal district court found the plaintiffs have not proven that the NYU retirement plans committee acted imprudently or that the plans suffered losses as a result. Read more.

Independent Contractors’ ERISA Lawsuit Fails to State Actionable Claim

The dispositive question is not whether the claimants were employees but whether, considering them as employees, they were eligible to participate in an ERISA plan according to the specific terms of the plan under consideration. Read more.

Brown University 403(b) Plans Suit Moves Forward

A federal judge denied dismissal of plaintiffs’ allegations that a prudent fiduciary would have chosen one—rather than two—recordkeepers; that a prudent fiduciary in like circumstances would have solicited competitive bids; and a claim regarding recordkeeping fees. Read more.

Xerox HR Solutions Wins Another Dismissal in ERISA Challenge

The text of the new decision says the second amended complaint has failed because “it is an attempt to replead dismissed counts,” and because it includes an entirely new cause of action, violation of the Racketeer Influence Corrupt Organizations Act. Read more.

5th Circuit Officially Mandates Decision to Vacate DOL Fiduciary Rule

Industry stakeholders immediately offered their thoughts on the complex regulatory saga that has surrounded the now-defeated DOL fiduciary rule; depending on their position in the industry and their particular client service philosophy, some providers are hailing this step as a victory, while others are bemoaning it. Read more.

Appellate Court Rejects Bank of America Participants’ Claim for More Relief

Noting that the bank already made restitution to the participants under an IRS closing agreement, the 4th Circuit agreed with a lower court that the bank did not profit from its transfer of 401(k) assets to create a cash balance plan. Read more.

Northwestern University Prevails in ERISA 403(b) Challenge

Underscoring the victory for Northwestern University and potentially giving some hope to other similarly positioned defendants, all pending motions were denied and the case has been terminated. Read more.

District Court Admits Error in ERISA Lawsuit Ruling

The district court’s new decision comes after its previous move denying defendants’ motion for summary judgment against plaintiffs’ claims, which cover a variety of fiduciary breach allegations; a new ruling is now forthcoming. Read more.

 ‘Peeps’ Candy Company Loses Appeal in Multiemployer Pension Funding Case

The employer sought to carve out new hires from a critical-status multiemployer pension fund and instead direct their contributions into a 401(k) plan—but both a district court and appellate court have called foul. Read more.

Court Rules Method for Calculating Multiemployer Plan Withdrawal Liability Was Improper

A federal district court has ruled a multiemployer pension fund’s use of the “Segal Blend” rate when assessing a member’s withdrawal liability was, in this instance, improper. Read more.

Edward Jones Fails to Win Dismissal of Self-Dealing Suit

The defendants argued that a court decision in a self-dealing lawsuit against Wells Fargo supports their motion to dismiss their suit. Read more.

District Court Rejects Racketeering Claims Against Prudential, Morningstar

A district court has ruled that the complaint “does not sufficiently plead that the defendants were engaged in the conduct of an association-in-fact enterprise or that each defendant engaged in a pattern of racketeering activity.” Read more.

Court Affirms Dismissal of Fidelity Stable Value Fund Suit

The 1st U.S. Circuit Court of Appeals found that Fidelity’s decision to obtain more secure wrap coverage for the stable value fund was reasonable. Read more.

ERISA Does Not Preempt State ‘Slayer’ Laws

Citing other courts, an appellate court agreed that “Congress could not have intended ERISA to allow one spouse to recover benefits after intentionally killing the other spouse.” Read more.

Ruling in Charles Schwab Self-Dealing Suit Suggests Limits of Arbitration Agreements

For one thing, a federal court judge found the defendants provide no authority supporting their contention that a plan document executed after the participant has ceased participation in the plan can bind the participant to arbitration. Read more.