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:
- Anderson v. Advance Publications, Inc. (dismissed on June 13, 2023 by the U.S. District Court for the Southern District of New York)
- McLachlan v. The Board of Trustees of the Elevator Constructors Annuity and 401(k) Retirement Plan (procedural ruling issued on June 7, 2023 by the U.S. District Court for the Eastern District of Pennsylvania)
- Mazza v. Pactiv Evergreen Services (procedural ruling issued on May 18, 2023 by the U.S. District Court for the Northern District of Illinois)
- Tolomeo v. R.R. Donnelley & Sons, Inc. (procedural ruling issued on May 15, 2023 by the U.S. District Court for the Northern District of Illinois)
Other types of recent ERISA cases are as follows:
Spence v. American Airlines, Inc. (complaint filed on June 2, 2023 in the U.S. District Court for the Northern District of Texas): This is the first case I have seen involving environmental, social and governance (“ESG”) investment funds. The plaintiffs in this proposed class action lawsuit are participants in the defendant plan sponsor’s 401(k) plan. The plaintiffs also named as defendants the plan’s committee, recordkeeper, and financial advisor. The plaintiffs allege that:
- The defendants “breached their fiduciary duties in violation of ERISA by investing millions of dollars of American Airlines employees’ retirement savings with investment managers and investment funds that pursue leftist political agendas through environmental, social and governance (“ESG”) strategies…activities which fail to satisfy these fiduciaries’ statutory duties to maximize financial benefits in the sole interest of the Plan participants.”
- “The unlawful decision to pursue unrelated policy goals over the financial health of the Plan is not only flatly inconsistent with Defendants’ fiduciary responsibilities, it jeopardizes the retirement security of hundreds of thousands of American Airlines employees.”
- “Many of the ESG funds that Defendants have included in the Plan are more expensive for Plan participants to own compared with similar non-ESG investment funds, underperform financially compared with similar non-ESG investment funds, and engage in shareholder activism to achieve ESG policy agendas rather than maximize the risk-adjusted financial returns for Plan participants.”
The plaintiffs seek a court judgment ordering the defendants to pay all related investment losses to the plan, enjoining the defendants from any further violations of their ERISA fiduciary responsibilities, and ordering them to pay the plaintiffs’ attorneys’ fees and other litigation costs.