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.
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 recordkeeping and investment fees and included
poorly-performing investment options in the plan. Recent cases in this category
include the following:
- Khan v.
Board of Directors of Pentegra Defined Contribution Plan (complaint filed on September 15,
2020 in the U.S. District Court for the Southern District of New York);
- Miller v. AutoZone, Inc. (procedural
ruling issued on September 18, 2020 by the U.S. District Court for the Western District of
- Cunningham v.
Cornell University (settlement agreement submitted on September 21, 2020 to the
U.S. District Court for
the Southern District of New York);
- Johnson v. Duke Energy Corporation (complaint filed
on September 23, 2020 in the U.S. District Court for the Western District of North
- Kong v. Trader Joe’s Company (case dismissed
on September 24, 2020 by the U.S. District Court for the Central District of California);
- Davis v. Salesforce.com, Inc. (case dismissed on
October 5, 2020 by the U.S. District Court for the Northern District of California);
- Guyes v. Nestle USA, Inc. (complaint filed
on October 9, 2020 in the U.S. District Court for the Eastern District of Wisconsin).
types of recent ERISA cases are as follows:
(decided on September 24, 2020 by the U.S.
District Court for the Eastern District of Kentucky): In the ERISA portion of this case, the
defendant (the owner and president of the plan sponsor) pled guilty to theft
from an employee benefit plan. Specifically, during 2016, he withheld $32,317
in employees’ contributions from their paychecks but failed to remit those
contributions to the 401(k) plan. He has now been sentenced to 36 months in
prison and 36 months of supervised release. (Before his sentencing, he fully
repaid all of the $32,317 in unremitted contributions.)
- Bartnett v. Abbott Laboratories (procedural
ruling issued on October 2, 2020 by the U.S. District Court for the Northern
District of Illinois): This plaintiff in
this case, who is a participant in the defendant plan sponsor’s 401(k) plan,
also named the plan’s recordkeeper as a defendant. The plaintiff filed this lawsuit
after a fraudster accessed her online plan account (via the plan’s call center
and website, which the recordkeeper operates) and effectuated a distribution of
$245,000 to the fraudster’s bank account. In this stage of the
case, the court addressed the defendants’ motions to dismiss the case.
- With respect to the plan sponsor,
the court ruled that the plaintiff’s complaint “fails to allege any fiduciary
acts taken by Abbott Labs, no less link them to the alleged theft.” As support
for that conclusion, the court noted that per the plaintiff, the call center
and website were used to perpetuate the theft, but both are operated by the
- As for the individual who serves
as the plan administrator (who is the plan’s named fiduciary), the plaintiff
contends that he breached his fiduciary duty because the plan’s website misrepresents
how plan assets are administered and safeguarded. However, the court ruled that
it “cannot infer that [this defendant] misled plan participants through a
website he does not operate.” Also, the court rejected the plaintiff’s contention
that ERISA’s duty of prudence extends to the “safeguarding of data and
prevention of scams” because the plaintiff failed to cite applicable caselaw
supporting that position.
- With respect to the recordkeeper,
the court ruled that “there are sufficient allegations on the face of the
complaint to infer that [the recordkeeper] acted as a fiduciary by exercising
discretionary control or authority over the plan’s assets” when it authorized
the distribution of $245,000 to the fraudster’s
bank account. The court acknowledged that as the case progresses, the
issue of whether the recordkeeper performed only ministerial (non-fiduciary)
functions for the plan will be critical.