Johnson & Johnson Case Sparks Concerns Over Future Excessive Health Fee Litigation
ERISA Litigation Advisor
by Kseniya Zilberman and Charles F. Seemann III
3w ago
Recent scrutiny of pharmacy benefit managers, also known as “PBMs,” has resulted in various lawsuits alleging that the high drug costs they charge violate ERISA. Among the first lawsuits in what appears to be a wave of new litigation against employers is Lewandowski v. Johnson & Johnson et al., No. 3:24-cv-00671, currently pending in the ..read more
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Fifth Circuit Remands ESG Rule in First ERISA Test Case Post-Chevron
ERISA Litigation Advisor
by Matthew T. Biggers and Stacey C.S. Cerrone
3M ago
In its recent decision in State of Utah v. Su, the Fifth Circuit remanded a challenge to the Department of Labor’s (DOL) environmental, social, and governance (ESG) rule for investing in defined contribution retirement plans after the Supreme Court’s recent decision in Loper Bright Enterprises v. Raimondo.  In Loper Bright, the Supreme Court overturned the ..read more
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Evonik Corporation Beats 401(k) Plan Challenge with Evidence of Rigorous Fiduciary Process
ERISA Litigation Advisor
by Lindsey H. Chopin, Matthew T. Biggers and Stacey C.S. Cerrone
4M ago
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. Jun. 28, 2024).   At the core of the decision was the court’s finding that Evonik’s fiduciaries followed a rigorous, prudent process for reviewing plan investments and fees. Specifically, with regard to investments, it w ..read more
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Second Circuit Weighs in Against ERISA Arbitration
ERISA Litigation Advisor
by Sung Cheol Sam Park and René E. Thorne
4M ago
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. In Cedeno v. Sassson, 100 F.4th 386 (2d Cir. 2024), plan participant Ramon Cedeno sued Argent Trust Company, the trustee of his former employer’s employee stock ownership plan (“ESOP”), alleging that Argent breached its fiduciary du ..read more
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Where Does the End of Chevron Deference Leave ERISA?
ERISA Litigation Advisor
by Adam R. Carlisle and Lindsey H. Chopin
4M ago
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 determining whether an agency’s regulation falls within its authority.   Chevron’s repeal has both immediate and concrete impacts on ERISA’s interpretation, as well as the potential for significant, broader effects.  For ..read more
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Conflicting Decisions Foreshadow Upcoming Disputes in ERISA 401(K) Forfeiture Class Actions
ERISA Litigation Advisor
by Adam R. Carlisle and Lindsey H. Chopin
4M ago
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 before their right to any employer contributions in their account vests. When a participant terminates employment before vesting, their unvested, forfeited employer contributions are swept into the plan’s forfeiture account. The ..read more
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SCOTUS Declines Review of Fourth Circuit ERISA Surcharge Ruling
ERISA Litigation Advisor
by Sung Cheol Sam Park and René E. Thorne
5M ago
The U.S. Supreme Court recently declined to hear Rose v. PSA Airlines, Inc., Case No. 23-734, which raised the question of whether a remedy known as “surcharge” falls under ERISA’s equitable remedies provision.  Surcharge, in simple terms, resembles monetary damages.  Historically, courts used it to address losses resulting from a trustee’s breach of duty or to prevent unjust enrichment.  Plaintiff Rose brought the action back in December 2019 on behalf of her deceased son’s estate.  Rose’s complaint alleged that her son’s employer, PSA Airlines, wrongly refused to cover th ..read more
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California District Court Dismisses Conclusory ERISA “Fee” Complaint Unsupported by Facts
ERISA Litigation Advisor
by Alex E. Hotard and Phillip C. Thompson
6M ago
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 of employers have been hit with proposed class actions challenging their “excessive” retirement plan fees.  Plaintiffs have had mixed results in court.  Here, the court reasoned that, although Plaintiff had established standing, t ..read more
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SDNY Denies Leave to Amend ERISA Complaint with “Substantively the Same Defects” as Dismissed Complaint
ERISA Litigation Advisor
by Alex E. Hotard and Phillip C. Thompson
7M ago
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, 2024). The court reasoned that the proposed amended complaint contained “substantively the same defects” as its predecessor.    Former Montefiore employees challenged the healthcare center’s management of its 403(b) retirement plan, alleg ..read more
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Fourth Circuit Affirms Aon’s Trial Victory in Investment Suit
ERISA Litigation Advisor
by Stacey C.S. Cerrone and Lindsey H. Chopin
1y ago
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 fiduciary, Aon transferred plan assets to an Aon fund with an unproven track record that underperformed. Plaintiffs also claimed that Aon’s sales efforts to acquire delegated fiduciary work and their recommendation to ..read more
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