January 2023 ERISA Litigation Update:

Given the continuing wave of ERISA litigation, this article has become a mainstay of The Speed Reader. A sample of recent cases is provided below. 

The most common type of ERISA case for approximately the past seventeen years involves retirement plan participants’ allegations that plan fiduciaries caused participants to pay excessive recordkeeping and investment fees and included one or more poorly-performing investment options in the plan. Recent cases in this category include the following:

  • Tullgren v. Booz Allen Hamilton, Inc. (dismissed on December 1, 2022 by the U.S. District Court for the Eastern District of Virginia)
  • Hall v. Capital One Financial Corporation (dismissed on December 1, 2022 by the U.S. District Court for the Eastern District of Virginia)
  • Krutchen v. Ricoh USA, Inc. (dismissed on November 15, 2022 by the U.S. District Court for the Eastern District of Pennsylvania)

Other types of recent ERISA cases are as follows:

Gragg v. UPS Pension Plan (decided on December 16, 2022 by the U.S. Court of Appeals for the Sixth Circuit):  In June of 2010, the retirement plan in which the plaintiff is a participant sent him letters addressing early-retirement benefits. The plaintiff selected a payment option and gave notice to the defendant that he would retire on August 1, 2010. The plaintiff turned 65 in July of 2018, and he began receiving plan benefits the next month. The plaintiff filed this lawsuit in November of 2020, alleging that since August 1, 2018, the plan had paid him less than he was entitled to each month. The district court dismissed his claim as time-barred, on the ground that the plan explained to the plaintiff in July of 2010 the amounts that the plan would pay after he turned 65.

The appeals court ruled that despite the June 2010 letters, the plaintiff suffered no injury until August 1, 2018 (when the plan first paid him less than the monthly amount to which he says he was entitled). Therefore, the plaintiff’s claim to recover benefits due to him under the plan did not accrue before August 1, 2018 and he filed this lawsuit timely.

United States v. Laufenberg (decided on November 17, 2022 by the U.S. District Court for the District of New Jersey):  The defendant was a fiduciary of, and a participant in, a pension plan. He admitted embezzling $140,000 from the plan. As a result, the court has sentenced him to six months of home confinement and three years of probation, and the court has ordered him to pay a $20,000 fine.

Haslam v. McLaughlin (decided on November 8, 2022 by the U.S. District Court for the District of Massachusetts):  The plaintiff, who is the sister of the deceased retirement plan participant, filed this lawsuit against the plan’s trustees and the participant’s ex-wife. The plaintiff mainly alleged that the trustee defendants wrongly paid the participant’s plan benefits to his ex-wife.

The court began its analysis by citing U.S. Supreme Court precedent, under which a plan administrator must manage its ERISA plan in accordance with the documents and instruments governing the plan. In other words, a plan administrator’s duty under ERISA is to pay benefits “in conformity with the plan documents.” With that precedent in mind, the court noted that the applicable plan forms here listed the participant’s ex-wife as his sole beneficiary under the plan. Thus, the court ruled that the trustees discharged their ERISA fiduciary duty by “faithfully adhering to the only documented designation of a beneficiary” (i.e., the participant’s ex-wife) that the participant made before his death.