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

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

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, Defendants moved to dismiss on the grounds that the plan document required arbitration. The district court refused to enforce the ESOP’s arbitration clause, finding that mandatory arbitration requires consent. There was no evidence that the plainti ..read more

The Third Circuit Court of Appeals recently held that as the plan fiduciary of Universal’s defined contribution plan, Universal Health Services Inc. and its plan investment committee (collectively “Universal”) must face a class action claiming its retirement plan included imprudent investment options charging excessive fees to more than 60,000 participants, even though the three named plaintiffs only invested in seven of the 37 plan investment options challenged by their lawsuit. Universal had appealed a 2021 decision certifying the Employee Retirement Income Security Act lawsuit as a class ac ..read more

An ERISA action alleging breaches of fiduciary duty recently cleared the pleadings stage in Minnesota district court, narrowly avoiding a complete dismissal. See Schave v. CentraCare Health Sys., No. 22-cv-1555 (WMW/LIB), 2023 U.S. Dist. LEXIS 13786 (D. Minn. Jan. 27, 2023). In Schave, a CentraCare employee challenged the healthcare provider’s handling of its 401(k) and 403(b) retirement plans. Specifically, Plaintiff accused CentraCare Health System, its board members, and retirement plan administrators of breaching their ERISA duties of prudence and loyalty by: investing in funds charging e ..read more

A New York district court recently summarily dismissed, with prejudice, a 401(k) plan participant’s putative class action complaint alleging breaches of fiduciary duty.  Falberg v. Goldman Sachs Grp., Inc., No. 19-cv-9910, 2022 U.S. Dist. LEXIS 167064 (S.D.N.Y. Sep. 14, 2022).  The Plaintiff alleged that the Plan fiduciary-Defendants breached their duties of prudence and loyalty under the Employee Retirement Income Security Act of 1974 (“ERISA”) by (1) failing to adopt an Investment Policy Statement (“IPS”), and (2) making decisions regarding the choice to remove or retain certain un ..read more

A New York federal court recently held that a service provider for employer-sponsored retirement plans was not liable as a fiduciary under the Employee Retirement Income Security Act (“ERISA”) when it used participant information to encourage certain plan participants to roll over assets into its more expensive managed account program.  Carfora v. Teachers Ins. Annuity Ass’n of Am., No. 21 Civ. 8384, 2022 U.S. Dist. LEXIS 175613 (S.D.N.Y. Sept. 27, 2022). Plaintiffs are participants in defined contribution retirement plans for which Defendant Teachers Annuity Association of America and TI ..read more

Plaintiffs must plead a “sound basis for comparison—a meaningful benchmark” — to sustain their claims of imprudent investment and excessive fee against a 401(k) plan, the federal appeals court in St. Louis has held, dismissing a class action lawsuit for breached of fiduciary duties under ERISA. Matousek v. MidAmerican Energy Co., No. 21-2749 (8th Cir. Oct. 12, 2022). Click here to read the full article on our website ..read more

The U.S. Court of Appeals for the Eighth Circuit recently affirmed a District Court’s finding that Principal Life Insurance Company (“Principal”) did not breach its fiduciary duties regarding its stable value contract for 401(k) plans.  Rozo v. Principal Life Ins. Co., No. 21-2026, 2022 U.S. App. LEXIS 24803 (8th Cir. Sept. 2, 2022). In Rozo, the plaintiff, on behalf of retirement plan participants who invested in Principal’s Principal Fixed Income Option (“PFIO”), sued under ERISA asserting that Principal breached its fiduciary duty of loyalty by setting low interest rates for participan ..read more

Since the Supreme Court’s January ruling in Hughes v. Northwestern University, circuit courts throughout the country have issued varying rulings regarding 401(k) fee litigation cases. These include the Ninth Circuit in Trader Joe’s Co. and Salesforce.com, Inc., and the Sixth Circuit in CommonSpirit Health, Inc. and TriHealth, Inc.  Most recently, the Seventh Circuit has weighed in, affirming the dismissal of a 401(k) fee litigation in Albert v. Oshkosh Corporation, No. 21-2789 (7th Cir. 2022). In Hughes, the Supreme Court held that offering some inexpensive investment funds does not preve ..read more