Federal Judge Rejects Cigna Motion to Stay

A federal judge allowed proceedings in a slate of consolidated complaints against the Cigna Group to move forward because the case does not entirely rest on the outcome of the Supreme Court’s future ruling in a similar case.

U.S. District Judge John Milton Younge, presiding in U.S. District Court for the Eastern District of Pennsylvania in Amanda Reven and Antoinette Argentine et al. v. The Cigna Group 401(K) Plan Retirement Plan Committee, rejected Cigna’s motion to stay the case, stating that any future Supreme Court decision in Anderson v. Intel Corp. Investment Policy Committee “is too uncertain and tentative” to warrant pausing proceedings against Cigna.

The Supreme Court agreed in February to hear the Intel case in its next term, which begins in October. In that case, the court will consider whether plaintiffs in Employee Retirement Income Security Act cases must identify a “meaningful benchmark” for comparing allegedly underperforming investment funds. However, Younge argued that pausing the Cigna lawsuits—which involve both underperformance and forfeiture misuse claims—would be unfair to the plaintiffs because the resolution of the Anderson case will not address all liability theories alleged in the Cigna actions.

Complaints Against Cigna

The plaintiffs accuse Cigna of seven ERISA violations. The complaint asserts several breaches of fiduciary duties that range from failing to adhere to plan documents to prohibited transactions.

The plaintiffs alleged that the Cigna Fixed Income Fund underperformed other available investment vehicles.

They also accused Cigna of solely using plan forfeitures to offset its employer contributions, rather than paying down plan expenses—counter to the terms of the plan, which said, prior to January 2025, that forfeited funds would be used “first to pay expenses of the Plan (other than routine administrative expenses) as directed and approved by the plan administrator, and second to reduce the cost of future company matching contributions.”

Typically, employers are allowed to use plan forfeitures for either purpose, and the Department of Labor and other government agencies have repeatedly offered guidance to support that. However, some forfeiture cases have advanced or led to settlements, particularly when the plan document language does not match the alleged behavior of the employer.

The Intel case will be heard by the Supreme Court during the term that starts in October, and its resolution will likely have significant influence on investment mismanagement disputes.

Capozzi Adler P.C. and Muhic Law LLC represent the plaintiffs in the case against Cigna, and Morgan, Lewis & Bockius LLP represents the defendants.