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 fourteen years has involved retirement plan participants’ allegations that plan fiduciaries caused participants to pay excessive record keeping and investment fees and included poorly-performing investment options in the plan. Recent cases in this category include the following:
Other types of recent ERISA cases are discussed below.
Bartnett v. Abbott Laboratories (complaint filed on April 3, 2020 in the U.S. District Court for the Northern District of Illinois): Ms. Bartnett, who is a participant in the defendant plan sponsor’s retirement plan, has also named the plan’s recordkeeper as a defendant. She alleges that the defendants failed to enforce security procedures established on the defendant plan sponsor’s website and “instead simply provided a one-time code over-the-phone that was used [by an unknown individual] to loot Ms. Bartnett’s account.” More specifically, the perpetrator accessed a webpage that allowed him or her to choose the “forgot password” option for the plaintiff’s account, and he or she thereby received a one-time-code that the perpetrator used to access the plaintiff’s account. The perpetrator then added to the account direct deposit information for a bank account that was not previously associated with the plaintiff’s account, and received a distribution from that account in the amount of $245,000.
During that process, the defendants “snail mailed” a “Direct Deposit Address Addition” notice to the plaintiff. She alleges that the defendants failed to send an email advising her of that change and that, if they had, she would have had an opportunity to question the addition of the new bank account before the unauthorized withdrawal was made. Based on those allegations, the plaintiff asserts that the defendants breached their fiduciary duty to her and that they must restore the lost assets and related investment income to her plan account. She also contends that they must pay her attorneys’ fees and litigation costs.
Frankenstein v. Host International, Inc. (complaint filed on April 28, 2020 in the U.S. District Court for the District of Maryland): The plaintiff in this proposed class action lawsuit (a participant in the defendant plan sponsor’s 401(k) plan) has also named the plan’s committee as a defendant. He contends that the plan document’s definition of “Compensation” for purposes of calculating plan contributions included tips received by an employee in the course of his or her employment. Also, the Summary Plan Description purportedly states that “all reported gratuities [are] eligible compensation when determining the eligible contribution amount for the Plan.” The plaintiff further contends, however, that the defendants excluded his tip income from his plan “Compensation” when calculating plan contributions. As a result, the plaintiff seeks a court order requiring the defendants to restore affected participants’ missed deferrals and missed matching contributions (and lost earnings) to the plan and to pay the plaintiff’s attorneys’ fees and other litigation expenses.