COLLECTED WISDOM™ on Court and Legal Actions Related to Retirement Plans

A directory and index of articles that review what is happening in the courts and legal system.

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Nvidia Strikes a Settlement in Excessive Fee Suit

Despite numerous attempts to quash the suit, the parties in an excessive fee suit say they are close to working out a settlement.

Source: Napa-net.org, October 2024

Circuit Split Deepens With Home Depot's 11th Circuit ERISA Win

A three-judge panel of the U.S. Court of Appeals for the Eleventh Circuit has upheld the dismissal of a 401k-plan mismanagement suit brought by plan participants in favor of Home Depot. The ruling affirmed a Georgia federal court's grant of summary judgment in the suit, in which plan participants claimed that the home improvement retailer violated ERISA in charging excessive fees and maintaining subpar investments.

Source: Hallbenefitslaw.com, October 2024

Recent Developments in Forfeiture Cases: Update

This article is the Wagner Law Group's sixth update reporting on and analyzing the nature of the "forfeiture" litigation claims raised by plaintiffs, the defenses asserted against them and the court opinions deciding the issues raised in these matters. In addition to providing an overview of the recent Thermo Fisher decision, this article also discusses the complaint filed against Knight Smith as well as a similar forfeiture complaint filed by the DOL in 2017.

Source: Wagnerlawgroup.com, October 2024

Why Does the DOL Allow ERISA Regulation Through Litigation By Plaintiff Lawyers

Why would America's plan sponsors continue to offer retirement plans with generous company matches if the trial bar is going to turn these voluntary benefits into liability traps? Just wait for a recession, and smart employers that want to reduce liability risk will eventually eliminate employee benefit plans that are targeted by the plaintiff trial bar. If you think this is an exaggeration, then you have not been watching the latest five trends of the plaintiff ERISA trial bar as they work to create novel fiduciary liability as America's de facto fiduciary liability regulators.

Source: Encorefiduciary.com, October 2024

Bid for Jury Trial Bounced in 403b Excessive Fee Suit

A long-running excessive fee suit involving a university 403b plan -- and is incredibly, still running -- won't have a jury trial, according to a new federal court ruling. The suit was brought by participants in plans of New York University. This case reminds us that litigation frequently involves a series of motions and countermotions, often small procedural victories that contribute little to the merits, but can influence the eventual outcome of the case.

Source: Ntsa-net.org, September 2024

Defendants Secure Another Win on Discretionary Use of 401k Plan Forfeitures

On September 19, 2024, the Southern District of California dismissed claims brought by a 401k plan participant against Thermo Fisher Scientific regarding the use of forfeitures to offset future employer contributions. As summarized in this article, the decision largely tracks a decision in favor of Hewlett Packard earlier this year, furthering a split in rulings on the issue by federal courts in California.

Source: Groom.com, September 2024

DOL vs. IRS Rules: Courts Asked to Decide How 401k Plans Can Use Forfeiture Assets

What started as a small law firm filing a handful of suits against 401k plans' use of forfeited funds has metastasized into a broad attack on sponsors that raises questions about reducing participants' expenses. It's a trend of law firms filing more lawsuits seeking to use DOL regulations regarding fiduciary duty to supersede IRS rules. The eruption of lawsuits has been accompanied in the early stages by divergent federal court decisions that don't give plan sponsors -- and their ERISA attorneys -- a clear picture of how to defend against this type of lawsuit.

Source: Wagnerlawgroup.com, September 2024

Chevron Explained

On June 28, the U.S. Supreme Court issued its decision in Loper Bright Enterprises v. Raimondo. The court overruled its own 1984 holding in Chevron v. Natural Resources Defense Council, in which it stated that the federal courts, in many cases, should defer to agency interpretations of ambiguous federal statutes. Here, ERISA expert David Kaleda unpacks the Supreme Court decision that gives the courts more weight in areas that include employee benefits law.

Source: Planadviser.com, September 2024

Multi-Billion-Dollar 403b Plan Settles Excessive Fee Suit

"After years of hard-fought litigation," a multi-billion-dollar 403b plan has struck a deal in an excessive fee suit. This suit involves plans of the MITRE Corporation Tax Sheltered Annuity Plan and the Qualified Retirement Plan with more than 23,000 participants and more than $8 billion in assets between them.

Source: Ntsa-net.org, September 2024

A Growing Trend: Fiduciary Secures Trial Victory in Excessive Fee Litigation

On August 22, 2024, the Central District of California found in favor of Prime Healthcare after a bench trial on breach of fiduciary duty claims related to the monitoring of recordkeeping expenses and selection of investments. This decision is another example of district courts across the country rejecting excessive recordkeeping fees and imprudent investment claims after trial. It also provides a notable rejection of the testimony from certain experts that the plaintiffs' bar has used in recent years to support these types of claims.

Source: Groom.com, September 2024

DOL Seeks to Keep ERISA Investment Advice Regulations in Place

The DOL recently filed a reply brief in a lawsuit brought by insurance industry groups seeking to block new regulations that expand the definition of fiduciary under ERISA. In its brief, the DOL asked the Court to deny a motion for a preliminary injunction that would prevent the agency from implementing and enforcing the new regulations.

Source: Hallbenefitslaw.com, September 2024

Lawsuit Related to Use of Forfeitures Dismissed

On September 5, 2024, a federal court for the Eastern District of Virginia dismissed claims that a 401k plan participant asserted against BAE Systems regarding the use of forfeitures to reduce future employer contributions. The Court's ruling is a significant victory for defendants in the newest wave of ERISA litigation. The decision underscores that including plan terms that eliminate discretion by directing how forfeitures are to be used can mitigate litigation risk.

Source: Groom.com, September 2024

District Court Permits 403b Plan Fiduciary Breach Claims to Proceed

A federal district court in Massachusetts recently denied a motion to dismiss a complaint filed by plan participants in the Cape Cod Healthcare, Inc. 403b plan, which alleged that the plan's fiduciaries breached their ERISA duty of prudence by permitting the plan to pay excessive recordkeeping fees and remain invested in overpriced, underperforming investment options. Plaintiffs, both former employees of Cape Cod Healthcare, alleged that Cape Cod Healthcare (plan sponsor and named fiduciary) and individual fiduciary defendants breached their fiduciary duty in two ways.

Source: Erisapracticecenter.com, September 2024

Forfeiture Cases Update: BAE Prevails on a Motion to Dismiss

On September 5, 2024, United States District Court Senior Judge Trenga, Eastern District of Virginia, issued the fourth substantive ruling on a motion to dismiss in a forfeiture case, granting BAE Systems' motion. The BAE decision breaks somewhat from other court's line of reasoning. In particular, the BAE Court concluded that the facts before it were distinguishable from the factual predicates underlying the other cases in which other courts have issued rulings on motions to dismiss. In the eyes of the BAE court, the particular language in the BAE plan did not provide plan fiduciaries with the discretion to apply forfeitures to pay plan expenses ahead of employer contributions.

Source: Wagnerlawgroup.com, September 2024

BAE Beats 401k Plan Forfeiture Suit

BAE Systems Inc. has beaten back a class action lawsuit accusing the company of misusing 401k plan forfeitures. U.S. District Judge Anthony Trenga, of the U.S. District Court for the Eastern District of Virginia, granted BAE's motion to dismiss the complaint by a current employee and plan participant seeking class-action status, according to an opinion and order filed Thursday.

Source: Planadviser.com, September 2024

Court Appears Skeptical of Invalidating the DOL's ESG Rule Despite the Fall of Chevron

A U.S. Court of Appeals for the Fifth Circuit panel appeared skeptical during oral arguments in which conservative states and Texas-based energy interests sought to reverse a district judge's order upholding an environmental, governance, and social rule in an Administrative Procedure Act case. The states also have asked the Fifth Circuit to remand the case and vacate the DOL rule as in conflict with ERISA.

Source: Hallbenefitslaw.com, September 2024

Sixth Circuit Sets Limits on Mandatory Arbitration Provisions in ERISA Plans

Plan sponsors often include arbitration provisions in employee benefit plans to resolve plan disputes outside of the courtroom. However, the recent Sixth Circuit Court of Appeals decision in Parker v. Tenneco is a good reminder to plan sponsors to ensure that plan arbitration provisions are not too restrictive and do not otherwise impede or waive a participant's statutory rights and remedies under ERISA to avoid a court finding the arbitration provision unenforceable.

Source: Haynesboone.com, September 2024

Suit Alleges "Scheme" by TIAA and Morningstar to Drive Participants Into TIAA's Most Profitable Funds

Three plaintiffs sued TIAA and Morningstar claiming the defendants engaged in a "scheme to enhance corporate profits" by counseling participants to invest in two of TIAA's most lucrative investment vehicles. Plaintiffs target ERISA and non-ERISA plans. The complaint alleges that TIAA and Morningstar developed an investment advisory tool deliberately inducing participants to transfer account balances into TIAA's Traditional Annuity and/or Real Estate Account, TIAA's two most profitable investment products.

Source: Erisalitigationadvisor.com, September 2024

Salesforce Settles 401k Suits for $1.35M

Salesforce Inc. has settled for $1.35 million a pair of outstanding 401k lawsuits alleging excessive retirement plan fees. The settlement requires court approval. The agreement brings to a close about four years of litigation across two separate lawsuits, according to a motion filed August 23 in U.S. District Court for the Northern District of California.

Source: Planadviser.com, September 2024

What the End of the Chevron Doctrine May Mean for ERISA's Fiduciary Provisions

Loper Bright will have an impact on most executive agencies, and a surge of litigation is expected as parties seek to have courts independently examine regulations interpreting federal laws, especially in new or recent regulations. The overturning of Chevron also raises the question of what other existing regulations may be ripe for challenge in the new landscape.

Source: Morganlewis.com, September 2024

Sixth Circuit Finds Individual Arbitration Provision in 401k Plan Unenforceable

The Sixth Circuit now joins the Second, Third, Seventh, and Tenth Circuits in concluding that an arbitration agreement may not prospectively waive participant rights under ERISA to seek plan-wide relief. Because the individual arbitration provision prohibited participants from recuperating all losses to the plans and restoring profits resulting from the fiduciary breaches, the court concluded that it functioned as a prospective waiver of the participants' substantive statutory remedies and, under the effective vindication doctrine was unenforceable.

Source: Benefitslink.com, September 2024

Forfeiture Cases -- Update

Several class action lawsuits have been filed alleging that plan fiduciaries violated their duties of prudence and loyalty under ERISA by applying forfeitures to reduce employer contributions instead of to reduce administrative expenses borne by plan participants. There is now more to report including (a) another order denying a motion to dismiss issued this week in the Intuit case, (b) an order denying a motion to reconsider or certify the issue for interlocutory appeal in the Qualcomm case, and (c) the filing of two more lawsuits against large plan sponsors alleging misconduct in the use of forfeiture amounts. Here are the details.

Source: Wagnerlawgroup.com, August 2024

401k Forfeiture Lawsuits Continue to Advance

While the use of 401k plan forfeitures to offset employer contributions has been a longstanding practice permitted by U.S regulators, recent litigation scrutinizing plan fiduciaries' use of forfeitures under ERISA continues both to be filed and to progress in courts. In recent weeks, a new class action complaint was filed, and two existing lawsuits survived district court challenges by the defendant companies.

Source: Plansponsor.com, August 2024

How Justices Upended the Administrative Procedure Act

In three cases handed down over the final three days of its last term, the U.S. Supreme Court made fundamental changes to the federal Administrative Procedure Act that undermined Congress and the executive branch by shifting power to the judiciary. By shifting decision-making from administrative agencies to the judiciary, the Loper Bright, Corner Post, and Jakesy troika create great uncertainty and unpredictability, while simultaneously limiting opportunity for clarity regarding duties and obligations.

Source: Hansonbridgett.com, August 2024

Eleventh Circuit Reiterates That Burden of Proving Loss Causation Stays With Plaintiffs

The Eleventh Circuit Court of Appeals recently affirmed a district court's grant of summary judgment in favor of the fiduciaries of the Home Depot 401k plan, who defended against claims that they breached their fiduciary duties by permitting the plan to pay excessive financial advisor fees and retaining underperforming investments. In so ruling, the court brought back to the fore a circuit split over whether the burden of persuasion on loss causation shifts when a plaintiff establishes or raises genuine issues of fact as to breach and loss to the plan.

Source: Erisapracticecenter.com, August 2024

How Employee Benefits Rules May Fare in the Post-Chevron World

The Supreme Court's long-awaited decision overruling its landmark 1984 decision in Chevron USA v. Natural Resources Defense Council, held that a court considering a federal agency's regulatory interpretation of a statute must follow the "best" reading of the statute, not just a "permissible" reading. This raises the bar for federal agencies, including those administering employee benefits laws. The decision has already affected ERISA litigation, as discussed here. This article also identifies some other potential effects.

Source: Wagnerlawgroup.com, August 2024

Judge Dimisses 401k Excessive Fee Allegations Against Tyson Foods

A federal judge in the U.S. District Court for the Western District of Arkansas dismissed a lawsuit filed against Tyson Foods Inc., which had accused the company of overcharging participants for recordkeeping fees and failing to solicit competitive bids.

Source: Planadviser.com, August 2024

Another ERISA Forfeitures Lawsuit Allowed to Proceed

A court hearing a lawsuit against Intuit, Inc., and its benefits committee denied the company's motion to dismiss, finding the plaintiff had sufficiently pled her fiduciary breach, anti-inurement, and prohibited transaction claims and that the plan "as a whole was damaged." In the complaint in this case, the plaintiff faulted Intuit for allegedly failing to use plan forfeitures to eliminate administrative expenses charged to participants' accounts and instead used those funds to reduce the company's contributions to the plan.

Source: Millerchevalier.com, August 2024

District Court Dismisses 401k Forfeited Funds Suit Against HP

A California federal district court judge has dismissed a novel proposed class action suit against HP involving the company's alleged misuse of 401k funds forfeited by former workers. The judge reasoned that nothing in federal benefits law compelled HP to use the funds for plan expenses rather than to reduce its employer contributions.

Source: Hallbenefitslaw.com, August 2024

Lawsuit Alleges TIAA, Morningstar, Pushed Participants Into Proprietary Annuities

Retirement plan participants have filed a class action lawsuit against TIAA and Morningstar for allegedly breaching their fiduciary duty by using a jointly created retirement planning tool to steer participants into TIAA investment products. The plaintiffs alleged that a retirement tool -- known as the Retirement Advisor Field View -- was designed to push participants in college and university retirement plans into TIAA annuity investment offerings.

Source: Planadviser.com, August 2024

"Bad" Comparators Bounce Tyson 401k Excessive Fee Suit

A federal judge has dismissed an excessive fee suit against Tyson Foods' 401k plan, finding that the plaintiffs hadn't provided comparison plans against which to conclude the fees paid were unreasonable. The plaintiffs allege that the defendants, as fiduciaries of the Plan, breached their duty of prudence they owed to the Plan by requiring the Plan to pay excessive recordkeeping and administrative fees, and "by failing to remove their high-cost recordkeeper, Northwest Plan Services, Inc."

Source: Napa-net.org, August 2024

Fifth Circuit Remands ESG Rule in First ERISA Test Case Post-Chevron

The Fifth Circuit did not decide whether the DOL properly promulgated the ESG rule. Instead, the court noted that Loper Bright "upended the legal landscape" by eliminating the Chevron deference and it could not consider the merits of the case because the district court relied on Chevron in deferring to the DOL's rulemaking process. With the removal of the Chevron duty to defer, the Fifth Circuit held that it was required to remand the case to the district court to make an independent determination of whether the rule was within the DOL's authority to pass.

Source: Erisalitigationadvisor.com, August 2024

Appellate Court Backs Home Depot in 401k Excessive Fee Suit

A federal appellate court has backed the decision of the district court -- rejecting claims made in an excessive fee suit, not only finding a prudent process -- but ruling that those bringing suit had to prove that any losses to the plan were the result of imprudent actions.

Source: Napa-net.org, August 2024

Major 401k Litigators Are Back in Action With More Entering the Fray

Just more than halfway through 2024, 401k plan lawsuits based on ERISA show no sign of slowing down. After a dip in the number of lawsuits in 2023, they have picked up pace in 2024, with complaints ranging from excessive fees for recordkeeper services to the use of managed accounts in plans. The most prolific law firms like Walcheske & Luzi and Capozzi Adler are filing a consistent number of cases.

Source: Planadviser.com, August 2024

The Demise of Deference: Podcast

With far-reaching implications -- likely including the Labor Department's fiduciary rule -- the nation's highest court has set aside a long-standing judicial deference to federal regulators in interpreting the law. In this podcast, Nevin Adams and Fred Reish consider the impact.

Source: Nevinandfred.com, August 2024

Multi-Employer Plan Sponsor Settles 401k Fee Suit

CURPA, a Wisconsin-based professional employer organization, provides services to credit unions, such as payroll, employee benefits, and other employee management tasks. One of those benefits is a multi-employer 401k plan with more than 20,000 participants with account balances at the end of 2020, as per the DOL. Former plan participants in the CURPA multi-employer 401k plan have reached a deal to settle an ERISA suit over excessive fees.

Source: Hallbenefitslaw.com, August 2024

Class Action Claims Wells Fargo Misused Forfeited 401k Funds in Violation of ERISA

A former Wells Fargo employee filed a proposed class action lawsuit against the company, alleging that it violated ERISA in using forfeited 401k funds to reduce its contributions to the plan rather than benefit plan participants. According to the suit, the net result was that the company's actions reduced plan assets and caused plan participants to incur expenses that the forfeited funds could have covered.

Source: Hallbenefitslaw.com, July 2024

Fifth Circuit Appeals Court Sends DOL ESG Case Back to Texas Court

A Texas district court will rehear a challenge to the Department of Labor's environmental, social, and governance rule for investing in defined contribution retirement plans after the U.S. 5th Circuit Court of Appeals remanded the case due to a recent Supreme Court decision. In his ruling, U.S. Circuit Judge Don R. Willett cited the Supreme Court overturning of the longstanding Chevron standard, claiming that in initially upholding the DOL's rule, the district court had relied upon the decades-old Chevron deference doctrine.

Source: Planadviser.com, July 2024

Are the Floodgates About to Open After the Demise of Chevron Deference?

In 2021, the DOL adopted a new rule that interpreted ERISA to allow retirement plan managers to consider the ESG factors. The new rule was immediately challenged by a group of states, companies, and trade associations. The district court, following the mandate of Chevron, deferred to the interpretation of the current DOL and rejected the challenge. Plaintiffs appealed. And then SCOTUS overruled Chevron. In a new decision, a three-judge panel of the Fifth Circuit has elected not to answer that weighty question on appeal "Given the upended legal landscape, and our status as a court of review, not first view, we vacate and remand so that the district court can reassess the merits." Are we about to see a slew of these types of decisions revisiting agency regulations after the demise of Chevron?

Source: Cooleypubco.com, July 2024

Qualcomm Bid for Dismissal of 401k Forfeiture Suit Denied

A federal district court judge denied Qualcomm's motion to dismiss a lawsuit filed by a former employee and current company 401k retirement plan participant. Antonio Perez-Cruet alleges in his ERISA suit that Qualcomm violated its duty of prudence when it used forfeited retirement funds to reduce its plan contributions rather than decrease administrative expenses borne by plan participants. The judge ruled that Perez-Cruet met his burden of alleging a plausible cause of action.

Source: Hallbenefitslaw.com, July 2024

Takeaways From Dismissal of Anti-ESG Lawsuit Against New York City Pension Funds

The New York County Supreme Court has dismissed a case that challenged the decision by several New York City Pension Funds to divest billions of dollars of investments in companies involved in the extraction of fossil fuels. The N.Y. court decided dismissal is appropriate because the plaintiffs participate in defined benefit plans that entitle them to fixed benefits each month and therefore face no injury and lack standing to challenge investment decisions that have no impact on the guaranteed retirement benefits they will receive.

Source: Cohenbuckmann.com, July 2024

How to Prevent a Lawsuit Over Retirement Plan Forfeitures

There has been a rash of lawsuits recently challenging how forfeitures are used in retirement plans. The novel theory in these suits -- a purported misuse of discretion in the application of forfeitures -- has recently gained some steam and legitimacy after surviving a motion to dismiss in Perez-Cruet v. Qualcomm. Employers with retirement plans that provide discretion over the use of forfeitures should consider making a simple plan design change to avoid being a litigation target.

Source: Bradley.com, July 2024

First Reasoned ERISA Forfeitures Decision Dismisses Complaint

Since September 2023, ten lawsuits have been filed alleging a novel theory of liability against ERISA plan sponsors for their use of forfeited employer-matching retirement plan contributions. Motions to dismiss have been filed or will be filed in all the lawsuits. After thoughtful deliberation, a federal trial judge in Silicon Valley dismisses the ERISA 401k plan forfeitures suit against HP Inc., albeit with leave to amend.

Source: Nixonpeabody.com, July 2024

401k Forfeitures Under Fire: Unpacking Recent Legal Battles -- Podcast

In this podcast, Richard and Sarah are joined by Ian Morrison, a Partner in Seyfarth's ERISA Litigation group to delve into a new line of cases alleging that forfeitures are plan assets, and must be used to benefit plan participants.

Source: Seyfarth.com, July 2024

Evonik Corporation Beats 401k Plan Challenge With Evidence of Rigorous Fiduciary Process

A New Jersey federal district court recently granted summary judgment in the defendant's favor in an ERISA excessive fee case accusing Evonik’s 401k plan fiduciaries of keeping imprudent investments in the plan and of allowing participants to pay excessive recordkeeping fees. At the core of the decision was the court’s finding that Evonik's fiduciaries followed a rigorous, prudent process for reviewing plan investments and fees.

Source: Erisalitigationadvisor.com, July 2024

District Court Grants Motion to Dismiss Forfeiture Complaint

That article discusses the May 24, 2024, decision by the United States District Court for the Southern District of California denying Qualcomm's motion to dismiss. It outlines how the district court in Qualcomm addressed and overruled arguments seeking to dismiss six substantive causes of action based on allegations asserting the misuse of plan forfeitures and the court's conclusion that the plaintiff in that case had plausibly alleged violations of ERISA.

Source: Wagnerlawgroup.com, July 2024

Why Chevron Reversal May Make Retirement's "Most Cautious" Players More Risk-Averse

In late June, the Supreme Court struck down the so-called Chevron doctrine through a decision in Loper Bright Enterprises v. Raimondo. The overturning of a longstanding standard of deference to federal agencies may make those in the already cautious 401k plan industry all the more "plain vanilla," according to experts.

Source: Planadviser.com, July 2024

DOL's ESG Rule Challengers Cite Chevron Reversal

The U.S. Supreme Court's decision to overturn the longstanding Chevron standard of deference to federal agencies will likely get a first test in the U.S. 5th Circuit Court of Appeals in a case seeking to overturn the DOL's ESG rule. The case will become the first concerning environmental, social, and governance factors to go before a judge in the post-Chevron era, with plaintiffs in Utah et al. v. Julie Su, Acting Secretary of Labor, arguing that the new Loper Bright decision has a direct bearing, while the DOL notes it did not rely on Chevron in its earlier rebuttal, making the June decision irrelevant to the appeal.

Source: Planadviser.com, July 2024

Lawsuit vs. ESG Investing in 401k Plans Marks Courts' First Test After Chevron Ruling

A lawsuit challenging a Biden administration rule permitting socially conscious investing by employee retirement plans will test the courts' approach to federal regulations following a pivotal Supreme Court decision. The New Orleans-based 5th US Circuit Court of Appeals will hear arguments from 25 Republican-led states opposing the DOL's rule on Tuesday, reported Reuters.

Source: Investmentnews.com, July 2024

Open Season for Regulatory Challenges: Supreme Court Overturns Chevron Deference and Expands Opportunities to Attack Federal Rules

On June 28, 2024, in a 6-3 decision, the Supreme Court overturned Chevron v. Natural Resources Defense Council, the most-cited case in administrative law. Chevron established a framework for how the federal courts decide challenges to agency interpretations of statutes and served as a bedrock support for upholding agency interpretations of statutes for the last 40 years.

Source: Groom.com, July 2024

District Court Dismisses Challenge to Use of Plan Forfeitures

A federal district court recently granted a motion to dismiss claims that defined contribution plan fiduciaries breached their fiduciary duties of loyalty and prudence, and violated ERISA's anti-inurement and prohibited transaction rules, by using forfeited funds to satisfy a portion of the employer's matching contribution obligations where the plan also permitted using such forfeitures to pay administrative expenses.

Source: Erisapracticecenter.com, July 2024

In Overturning Chevron, Supreme Court Makes It Easier for Regulated Entities to Challenge Agencies on Statutory Interpretation

The longstanding Chevron doctrine required courts to defer to agencies' construction of ambiguous statutes, even as to the scope of those agencies' authorities, so long as the agency's construction of the ambiguous statute was reasonable and thus a "permissible" one. Supreme Court's decision strips agencies of this presumptive deference and invites new litigation over interpretations of statutory language that govern many areas of law and business. The decision also signals that more changes to administrative law may be on the horizon.

Source: Ropesgray.com, July 2024

Supreme Court Overturns the Chevron Doctrine, Sending Statutory Interpretation Back to the Courts

This article considers the Supreme Court's recent decision in Loper Bright Enterprises et al. v. Raimondo, Secretary of Commerce, et al., June 28, 2024, overturning the Chevron Doctrine, what it is, what it does, and how it might affect current and future disputes over agency decisions concerning ERISA, primarily decisions by the Department of Labor.

Source: Octoberthree.com, July 2024

Chevron Doctrine Overruled: US Supreme Court Upends Longstanding Foundation of Administrative Law

The US Supreme Court on June 28 overturned the Chevron doctrine that for four decades has required federal courts to defer to administrative agencies' interpretations of ambiguous or broad statutes. The doctrine was a foundation of administrative law and afforded successive US presidential administrations flexibility to interpret statutes via agency adjudications and rulemaking. The Court's decision will have a substantial impact on both regulated industries and agencies.

Source: Morganlewis.com, July 2024

Supreme Court Rolls Back "Deference" to Federal Agencies and Opens Up More Challenges to Regulations

Because of today's Chevron decision, courts will no longer defer. Instead, they will give statutes their "best" interpretation. That means agencies -- including labor and employment agencies -- will have less leeway to write broad rules. They will instead have to write rules that hew more closely to statutory language. They may also have to defend some existing rules against closer scrutiny in court.

Source: Littler.com, July 2024

Conflicting Decisions Foreshadow Upcoming Disputes in ERISA 401k Forfeiture Class Actions

Conflicting orders on motions to dismiss from two California courts foreshadow issues for a new theory of ERISA liability. Employers have faced a recent wave of novel ERISA class actions that challenge the reallocation of defined contribution plan forfeitures. The recent lawsuits challenge an employer's decision to use plan forfeitures to make later employer contributions rather than defray administrative fees otherwise payable by the participants.

Source: Erisalitigationadvisor.com, July 2024

Could SCOTUS Chevron Decision Undermine Fiduciary Rule?

With far-reaching implications -- likely including the DOL's fiduciary rule -- the nation's highest court has set aside a long-standing judicial deference to federal regulators in interpreting the law. While the full implications will take time to emerge, it's almost certainly going to produce more litigation, and in the process, less certainty for advisors, plan sponsors, and recordkeepers trying to operate within those boundaries.

Source: Asppa.org, July 2024

Novel 401k Plan Lawsuits Over the Use of Forfeitures: Swinging for the Fences or Plausible Claims?

This article summarizes the factual similarities in the two lawsuits over the use of plan forfeitures to offset employer contributions, highlights and contrasts key aspects of each court's claims analysis, and offers some commentary. It also provides steps for plan sponsors to consider taking in light of what may be a growing trend in ERISA litigation.

Source: Verrill-law.com, June 2024

Judge Dismisses 401k Excessive-Fee Lawsuit Against PNC Financial

PNC Financial Services Group Inc. has had a lawsuit dropped from workers accusing the company of paying excessive recordkeeping fees for their incentive savings plan. Judge Christy Criswell Wiegand decided that an expert witness for the plaintiffs was unreliable, leading to a dismissal of the allegations.

Source: Planadviser.com, June 2024

Plaintiff Lawyers Can Now Use AI to Identify Potential Plan Issues

Tech and legal firm Darrow uses AI as a tool for ERISA lawsuit allegations such as underperforming plans and excessive fees. Attorney Levine, who often represents fiduciary defendants, says that the use of AI in this field of law is relatively new, but its use is "very much a data processing tool," and little else. Fiduciaries should generally follow the same principles as before, he says, but since AI models tend to focus on data procured from Form 5500s, sponsors should consider evaluating their Form 5500 reporting to be sure everything is accurate.

Source: Planadviser.com, June 2024

CFP Board Backs DOL Fiduciary Rule in Federal Court

Writing in an amicus, the CFP Board cautions that "If the Court accepts Plaintiffs' arguments, then this will leave open significant regulatory gaps that allow advisors to recommend financial products, including insurance products, that are not in the best interests of retirement investors, in contravention of [ERISA's] mandate to provide a high level of protection for retirement assets."

Source: Napa-net.org, June 2024

Can a TPA's Exploitation of a Plan Sponsor'S Breach of ERISA Duty Make the TPA a Fiduciary?

The new theory of liability is that TIAA knew of the plan sponsors' failure to exercise oversight of TIAA's sales tactics, a clear breach of fiduciary duty by the plan sponsors. TIAA allegedly knowingly exploited this failure for its benefit. Therefore, even though the company was a service provider and arguably not a fiduciary under ERISA, this knowing collaboration in the sponsor's breach brought it within the ambit of the law. It is a creative argument, it is convoluted, and it is one to watch for the future.

Source: Lawyersandsettlements.com, June 2024

Salesforce Settles ERISA Class Action With 50k Workers

Just a week before a bench trial was scheduled to begin, Salesforce reached a settlement with as many as 50,000 of its employees in a class action lawsuit over its 401k plan. The San Francisco-based software company faced claims of breach of its fiduciary duties under ERISA for failing to replace costly and underperforming investment options in the 401k plan. The workers had sought over $5 million in damages, plus prejudgment interest, to be divided among the plan participants in proportion to their account losses.

Source: Hallbenefitslaw.com, June 2024

DOL Files Counter-Brief to Retirement Security Rule Challenge

The DOL answered one of two open lawsuits in the federal courts challenging the Retirement Security Rule on June 14. The regulator's first response in court argued that the new rule is compliant with existing case law and is substantially different from a 2016 regulation that was vacated by the U.S. 5th Circuit Court of Appeals.

Source: Planadviser.com, June 2024

Dueling Decisions Spur Employer Confusion on 401k Forfeitures

Employers tasked with reallocating 401k assets forfeited by former employees are encountering a wave of litigation alleging the misuse of plan funds, as well as an emerging disagreement between judges on these suits' viability.

Source: Bloomberglaw.com, June 2024

HP Prevails in "Novel" 401k Forfeiture Reallocation Suit

The third of the forfeiture reallocation suits to come before a federal judge was described as a "swing for the fences" and dismissed, with a "catch." Judge Freeman commented that the plaintiff "advances a novel legal theory under which it is a breach of fiduciary duty to allocate forfeited amounts to reduce employer contributions rather than to pay administrative costs." She went on to note that "to date, there is no binding authority that addresses this theory...."

Source: Napa-net.org, June 2024

Milliman Manages a Win in TDF Fiduciary Breach Suit

This suit was filed in January 2022 and made several allegations regarding practices by the fiduciaries of the Milliman, Inc. Profit Sharing and Retirement Plan. At issue was a suite of target risk funds. Those funds were put in the plan menu in 2013, but the suit comments that "having only been launched in November 2012, the Unified Funds were brand new, had no investment track record, and were untested."

Source: Napa-net.org, June 2024

Upcoming Appellate Arguments for Benefits Attorneys to Watch

Several important benefits cases are pending before various U.S. Courts of Appeals. Benefits attorneys should look out for the upcoming appellate arguments in these cases including Tanika Parker et al. v. Tenneco Inc. et al., case number 23-1857, U.S. Court of Appeals for the Sixth Circuit. In this class action lawsuit, workers allege that their automotive company employers mismanaged their 401k plan by charging excessive recordkeeping fees and maintaining high-cost investment offerings.

Source: Hallbenefitslaw.com, June 2024

Many Workers Don't Realize They Are Not Contributing to Workplace Plans

The Department of Labor filed an amicus brief to the U.S. 6th Circuit Court of Appeals in May which argued that a mandatory arbitration provision in a 401k plan document is unenforceable if it is tied to a class-action waiver. Most appeals courts have so far agreed with them.

Source: Plansponsor.com, June 2024

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