We at Your ERISA Watch do not know whether it was the ongoing federal government shutdown, the captivating seven-game World Series between the Dodgers and Blue Jays, or simply the always-jarring transition away from daylight saving time (or is it daylight “savings” time?), but it was another slow week for the federal courts in ERISAland. As a result, there was no stand-out notable decision to break down.

The courts soldiered on, however, so keep reading to learn about another blow to class actions based on forfeited employer contributions to retirement plans (Polanco v. WPP Group), two decisions on motions to dismiss in class actions challenging excessive recordkeeping fees (Gosse v. Dover Corp. and Milano v. Cognizant), the easiest life insurance interpleader case of all time (Kostomite v. Kimberley-Clark), and, if you are especially sleepy, an expedition into the fascinating world of Colorado River abstention (Gray v. Arrow). We’ll see you next week!

Below is a summary of this past week’s notable ERISA decisions by subject matter and jurisdiction.

Breach of Fiduciary Duty

Second Circuit

Polanco v. WPP Group USA, Inc., No. 24-cv-9548 (JGK), 2025 WL 3003060 (S.D.N.Y. Oct. 27, 2025) (Judge John G. Koeltl). Plaintiffs Rafael Polanco and Monique Johnson are participants in a defined contribution plan sponsored by their former employer WPP Group USA, Inc. and administered by the plan’s Administrative and Investment Committee. Plaintiffs allege that WPP and the Committee breached their fiduciary duties and engaged in prohibited self-dealing in violation of ERISA by using forfeitures to reduce employer contributions rather than to defray the plan’s administrative costs. Defendants filed a motion to dismiss the complaint. The court granted that motion in this decision. It broke down the claims one by one. First, the court dismissed the claim of disloyalty. It concluded that plaintiffs could not maintain this cause of action for three reasons: (1) it interprets the duty of loyalty to create a benefit that the plan document itself does not guarantee – the use of forfeitures to pay administrative expenses; (2) it rests on a faulty assumption that plan participants would receive greater benefits if defendants used the forfeitures to cover administrative expenses because the plan document does not require WPP to make employer contributions at all; and (3) plaintiffs’ theory of disloyalty is difficult to harmonize with established practice, including the Treasury Department’s regulations which permit employers to use forfeitures to cover employer contributions. In sum, the court concluded that defendants complied with the terms of the plan and provided the plan participants with their benefits due, and as a result, granted the motion to dismiss the claim for breach of the duty of loyalty. Next, the court dismissed plaintiffs’ claim that defendants utilized an imprudent and flawed process in how to allocate forfeitures. To the extent that this claim was based on defendants’ particular decision-making process, the court found the complaint’s allegations “too conclusory to establish a plausible entitlement to relief,” and to the extent it is based on a broader theory that the duty of prudence requires defendants to use the forfeitures to pay administrative costs, the court found that this idea was “contrary [to] the settled understanding of Congress and the Treasury Department regarding defined contribution plans like the one at issue in this case.” The court also dismissed the duty to monitor claim against WPP. It stated that plaintiffs could not maintain such a cause of action because their two underlying fiduciary breach claims of disloyalty and imprudence against the Committee were found to be insufficient and implausible. Finally, the court dismissed plaintiffs’ prohibited transactions claims under 29 U.S.C. § 1106(a)(1) and (b)(1). It found that plaintiffs failed to adequately state claims under either subsection “because using forfeitures to cover employer contributions is not a transaction within the meaning of those provisions.” Instead, the court agreed with defendants that the intra-plan reallocation of forfeitures to cover employer contributions is a “payment of benefits and thus not a transaction within the meaning of § 1106.” Accordingly, the court granted defendants’ motion to dismiss the entirety of plaintiffs’ action. The court dismissed the prohibited transaction claims with prejudice, but dismissed the fiduciary breach claims with leave to amend.

Seventh Circuit

Gosse v. Dover Corp., No. 22 C 4254, 2025 WL 2996795 (N.D. Ill. Oct. 24, 2025) (Judge LaShonda A. Hunt). This putative class action was brought by two participants of the Dover Corporation 401(k) plan against the plan’s fiduciaries alleging that they breached their duties under ERISA by paying excessive recordkeeping fees to third-party administrators Wells Fargo and Merrill Lynch. Defendants moved to dismiss for failure to state a claim. The court granted the motion and dismissed the complaint with prejudice in this decision. As it had in earlier decisions, the court found that plaintiffs’ amended complaint “was closer to [the Seventh Circuit’s decision in] Albert than Hughes II, primarily because the facts alleged therein did not offer an apples-to-apples comparison of comparable services or plans.” Specifically, the court took issue with the complaint’s failure to show that the cited plans were comparable to the Dover plan in terms of asset size, services provided from the recordkeepers, or the methods for calculating total fees. The underlying message was that plaintiffs failed to plead enough factual content to render it plausible that the fiduciaries incurred unreasonable recordkeeping and administrative fees and failed to take actions to lower such expenses. Accordingly, after engaging “in the context-specific scrutiny required by Hughes II,” the court concluded that it could not infer fiduciary wrongdoing from the allegations in the amended complaint, and for this reason, the court granted defendants’ motion to dismiss.

Class Actions

Second Circuit

Lloyd v. Argent Trust Co., No. 22cv4129 (DLC), 2025 WL 3041911 (S.D.N.Y. Oct. 31, 2025) (Judge Denise L. Cote). The participants of the W BBQ Holdings, Inc. Employee Stock Ownership Plan moved for class certification in their ERISA lawsuit challenging the plan’s 2016 stock transaction and the events that led up to it. In this short decision, the court granted the motion. As an initial matter, the court held that the class is ascertainable as it consists of plan members who can easily be identified through objective criteria. The court also explained that the class satisfies the requirements of Rule 23. Beginning with Rule 23(a), the court concluded that the class of well over a thousand members is sufficiently numerous, that there are common questions of law and fact shared among the class, “such as whether the defendants violated their fiduciary obligations and whether the ESOP paid a fair price for its purchase of W BBQ stock,” plaintiffs’ claims are typical of the other class members, and plaintiffs and their attorneys at Cohen Milstein Sellers & Toll PLLC are adequate representatives of the class. Turning to certification under Rule 23(b), the court concluded that certification under subsection 23(b)(1)(B) is appropriate because “the success or failure of claims by any class members will greatly impact the claims of other members.” Accordingly, the court saw no impediment to certification and therefore certified the proposed class. Moreover, the court appointed the named plaintiffs Jamal Lloyd and Anastasia Jenkins as class representatives and Cohen Milstein as class counsel.

Discovery

Sixth Circuit

Nationwide Children’s Hospital v. The Raymath Co., No. 3:23-cv-00044, 2025 WL 3022504 (S.D. Ohio Oct. 29, 2025) (Magistrate Judge Caroline H. Gentry). This dispute arises from The Raymath Company Health Plan’s non-payment of $561,379.41 worth of medical claims that plaintiff Nationwide Children’s Hospital submitted for care it provided to a minor child who was a beneficiary of the plan. In this lawsuit Nationwide challenges the non-payment of its claim for benefits under both ERISA and state law, the claim processing procedures used by third-party administrator J.P. Farley Corp., and the failure to submit Nationwide’s claim for benefits under a policy of stop-loss coverage provided by the Excess Reinsurance Underwriters Agency. Toward the end of the discovery period, J.P. Farley Corp. and Nationwide issued deposition subpoenas to non-party Michael Kerns in connection with his company’s sale of the stop-loss insurance policy to Raymath and the ways in which he is alleged to have intervened in the processing of Nationwide’s claim for benefits to prevent it from being submitted for stop-loss coverage, as he would have suffered a personal financial loss if the claim was submitted. Not wanting to be deposed, Mr. Kerns moved to quash the subpoenas. The court denied his motion in this decision. It held that Mr. Kerns did not show that being required to testify at a deposition would subject him to an undue burden, and instead found the proposed line of questioning both relevant and proportional. It stated, “[b]ased upon the parties’ discussions of the evidence obtained during discovery, Kerns appears to have personal knowledge about several issues that are of central importance to the parties’ claims and defenses. Although Kerns argues that his financial interests are irrelevant, the Court disagrees because the parties contend that a financial conflict of interest motivated him to intervene in the processing of Nationwide’s claim. Finally, the parties have no other way to obtain the information that they seek. For all of these reasons, the likely benefit of deposing Kerns strongly outweighs the slight burden of being required to testify at a deposition.” The court did not take kindly to Mr. Kerns’ primary argument that it should prohibit or limit his deposition because the parties seek to obtain evidence that can be used against him. It found this proposition “startling,” not supported by “any authority,” and “readily refuted,” given that “Rule 45 does not allow non-parties to quash or modify subpoenas to avoid being required to implicate themselves or admit to wrongful conduct. To the contrary, non-party deposition subpoenas may be used for precisely that purpose.” In sum, it was abundantly clear to the court that Mr. Kerns’ deposition is necessary and thus it denied his motion to quash in its entirety.

Exhaustion of Administrative Remedies

First Circuit

Gray v. Arrow Mutual Liability Ins. Co., No. 25-10054-NMG, 2025 WL 3033882 (D. Mass. Oct. 29, 2025) (Judge Nathaniel M. Gorton). Plaintiffs Susan C. Gray and Brian Gray are the wife and son of decedent Peter Gray. In this action the mother and son allege that defendants Arrow Mutual Liability Insurance Company, the Arrow Mutual 401(k) Plan, and Tanya Ucuzian violated ERISA by wrongfully withholding over $600,000 in employer contributions when they distributed the plan assets to the family. In their lawsuit plaintiffs assert claims against defendants for wrongful denial of benefits under Section 502(a)(1)(B), equitable relief under Section 502(a)(3), and violation of ERISA Section 510. Defendants moved to dismiss all claims, or in the alternative, to stay the case pending resolution of the state court action in which the parties are currently involved which also concerns, among other things, Peter’s participation in the 401(k) plan. In this order the court denied the motion to dismiss, but allowed the motion to stay pending resolution of the state court action, which is much further along and set to go to trial in March. The court’s discussion of the pending motion to dismiss mostly focused on the issue of exhaustion. It decided without much ado that Susan exhausted all available administrative remedies before commencing the present action. “The complaint, as well as defendants’ own submissions, make clear that Susan filed a claim for benefits in December, 2023, when she submitted the Death Benefit Claim 401(k) Plan form. In November, 2024, Susan sent a letter to defendants reiterating that original claim. Defendants denied the claim with respect to employer contributions in February, 2025, more than one year after the original claim was made and almost two months after the filing of the present action. That delay is sufficient, as per regulation, to consider Susan’s administrative remedies exhausted.” However, the court agreed with defendants that the state law action and the federal action are sufficiently parallel to warrant a stay since both lawsuits cover similar ground concerning whether Peter was a valid member of the 401(k) plan. Thus, the court found that the claims here overlap with some of the claims in the state court proceedings and that the state court’s conclusions will have some bearing on whether plaintiffs are entitled to relief under ERISA. Consequently, the court concluded that it is prudent to stay the federal case pending resolution of the case in Essex County, Massachusetts.

Medical Benefit Claims

Second Circuit

Marc Everett MD PC v. UMR, Inc., No. 22-CV-4856 (ARR) (AYS), 2025 WL 3004944 (E.D.N.Y. Oct. 27, 2025) (Judge Allyne R. Ross). Plaintiff Marc Everett M.D. brought this action on behalf of his patient against defendant UMR, Inc. under ERISA Section 502(a)(1)(B) alleging that it underpaid healthcare benefits for a bilateral breast reduction surgery that was covered under the plan. The parties filed cross-motions for summary judgment under an arbitrary and capricious standard of review. Because the court agreed with Dr. Everett that UMR’s $2,132.54 payment based on 150% of Medicare rate did not conform with the Summary Plan Description’s general definitions of “Reasonable Reimbursement” and “Usual and Customary” for out-of-network providers, the court granted summary judgment in favor of Dr. Everett. In addition to finding that the language of the plan did not support the administrator’s benefit determination, the court also concluded that the other materials in the administrative record suggested that the use of the Medicare rate was an abuse of discretion. In fact, the court said that nothing within the administrative record supported the idea that the reimbursement was to be based on 150% of Medicare rate. To the contrary, the court agreed with Dr. Everett that UMR’s “threadbare interpretation of the Plan” was arbitrary and capricious. Accordingly, the court granted Dr. Everett’s motion for summary judgment, while it denied UMRs motion. This left only the issue of how to remedy the plan administrator’s abuse of discretion. Ultimately, relying on Second Circuit precedent, the court concluded that the appropriate remedy was to remand the claim back to UMR for UMR to interpret “usual and customary” based on the prevailing market rates for the procedure in the relevant geographical area.

Pension Benefit Claims

Third Circuit

Kostomite v. Kimberley-Clark Corp., No. 24-4473, 2025 WL 3002995 (E.D. Pa. Oct. 27, 2025) (Judge Gail Weilheimer). Plaintiff Sophie Kostomite brought this lawsuit as the beneficiary of her long-time partner Bill Teetsel’s 401(k) & Profit Sharing Plan account. Although the couple was not legally married, Ms. Kostomite often used her partner’s surname, Teetsel, as her own, so much so that Bill Teetsel named “Sophie Teetsel” as his designated beneficiary. The social security numbers and dates of birth of Sophie Teetsel and Sophie Kostomite match exactly. Thus, identifying herself as the named beneficiary, plaintiff submitted a claim for benefits under the plan following Bill’s death. While many cases present close calls and difficult determinations, the court was adamant that this was not one of them. Instead, it stated that this case was so clear that “it is puzzling as to how we arrived at a point where the judicial power of the United States is required to resolve it.” The court found “it inescapably obvious that the Decedent intended to name Plaintiff the recipient of the Plan’s proceeds. The use of her social security number and birth date makes it entirely unambiguous that the Decedent intended the Plan’s funds to go to Plaintiff. That misuse of the last name Teetsel creates virtually no ambiguity in the face of that corroboration. The only logical conclusion that can be drawn from this set of facts is that the Decedent, in his own mind, thought of Plaintiff as his spouse and referred to her as having his name. This is particularly true in light of the record evidence which shows that Plaintiff at least sometimes used Teetsel as her last name, and that she and Decedent were live-in romantic partners across decades. There is no other reasonable way to understand that beneficiary designation, and no reasonable jury could conclude otherwise.” In an attempt to thwart plaintiff’s claim to the benefits the Estate of Bill Teetsel offered a strange theory – that the identification was meant to be a qualifier or a requirement that in order to receive the funds, the couple needed to be married. This theory was offensive to the court. It disregarded this “rank speculation” for three reasons: (1) married spouses are automatically beneficiaries under the plan; (2) not all married women assume the last name of their spouses; and (3) there is no law which prevents Ms. Kostomite from legally changing her surname to Teetsel even without marrying Bill. For these reasons, the court flatly rejected defendant’s hypothesis that the plan’s designation was conditional. Instead, the court offered its own theory. It theorized that the Estate’s “whimsical alternative explanation” was simply a wild “attempt to gain a $300,000 windfall.” Seeing no genuine dispute of material fact that plaintiff and beneficiary were one and the same, the court entered judgment in favor of Ms. Kostomite, and awarded her the benefits her partner always intended for her to have.

Pleading Issues & Procedure

Third Circuit

Milano v. Cognizant Tech. Solutions U.S. Corp., No. 20-cv-17793 (MEF)(SDA), 2025 WL 3002178 (D.N.J. Oct. 27, 2025) (Judge Michael E. Farbiarz). Employees of Cognizant Technology Solutions U.S. Corporation sued the investment committee of the company’s 401(k) plan under ERISA alleging that it failed to control the administrative and recordkeeping expenses of the plan which left them saddled with unreasonable costs. Defendant moved to dismiss the complaint pursuant to Rule 12(b)(1). The investment committee presented the question of whether plaintiffs have standing under Article III to press their claims to the extent they are based on fees associated with plan funds that they did not personally invest in. The court could not say. The long and the short of it is that this decision functioned more as a vehicle for posing questions than for answering them. If the fees were paid on a uniform basis, the court was confident that plaintiffs do have standing. If, on the other hand, they were paid in a nonuniform manner through a revenue sharing model, the court was less certain. In the latter situation, it found the question to be a closer call, as there are several decisions, including within the Third Circuit, which suggest that the answer may potentially be no. Further complicating matters, it appears as though the Cognizant Tech 401(k) plan had a direct-fee model after September 2018 and an indirect-fee model before September 2018. Because the resolution of these Article III standing questions depends on factual and legal matters that have not been fully addressed by the parties, the court determined that there was simply “no way to thoughtfully resolve the Defendant’s motion to dismiss” just yet. Given this backdrop, the court denied the motion to dismiss without prejudice and ordered the parties to file briefing indicating how they wish to proceed.

Seventh Circuit

Whitten v. Midwest Refrigeration Corp., No. 2:24-CV-407-PPS-JEM, 2025 WL 3002978 (N.D. Ind. Oct. 23, 2025) (Judge Philip P. Simon). Plaintiff Kenneth Whitten worked for the Midwest Refrigeration Corp. (“Midwest”) for 36 years. According to Mr. Whitten, Midwest and his union entered into a collective bargaining agreement on September 25, 1989, that obligated Midwest to make pension contributions on his behalf and on behalf of other eligible employees. Mr. Whitten maintains that despite this obligation, Midwest did not begin remitting pension contributions on his behalf until eight years later. In this lawsuit Mr. Whitten alleges that those missing years of pension contributions were in violation of ERISA and state law. Midwest moved to dismiss the complaint pursuant to Rule 12(b)(6). Because the court agreed with Midwest that it is not a proper defendant for either Mr. Whitten’s ERISA claim for benefits or his ERISA claim for fiduciary breach, the court granted the motion to dismiss. Beginning with the Section 502(a)(1)(B) claim, the court held that Mr. Whitten could not sue Midwest because it was not the benefit plan itself, nor an entity that controls the plan. In fact, the court concluded that Mr. Whitten had alleged “no facts to plausibly suggest Midwest is sufficiently intertwined with his plan to state a Section 502(a)(1)(B) claim against it.” Moreover, the court determined that the Section 502(a)(3) claim also failed because there are no plausible allegations in the complaint to suggest that Midwest had any “authority, control, or discretion with respect to the benefit fund’s assets, administration, or management.” The court rejected the notion that Midwest exercised any control over the plan’s assets or functioned as a plan fiduciary simply by virtue of being a contributing employer. Nor did the court agree with Mr. Whitten that “Midwest’s partial payment of $23,538.20 to correct its shortfall in contributions demonstrates discretionary control over the fund and the administration of its contributions.” To the contrary, the court viewed this as demonstrating Midwest only exercised control over its own assets. Accordingly, the court granted the motion to dismiss both causes of action under ERISA. And, having found that the complaint fails to state its federal claims, the court declined to exercise supplemental jurisdiction over the remaining state law claim for breach of an oral agreement. As a result, the court granted Midwest’s motion to dismiss.

Remedies

Sixth Circuit

Chalk v. Life Ins. Co. of N. Am., No. 3:25-cv-133-RGJ, 2025 WL 3006758 (W.D. Ky. Oct. 27, 2025) (Judge Rebecca Grady Jennings). On April 24, 2024, plaintiff Jennifer Chalk submitted a claim for short-term disability benefits to Life Insurance Company of North America (“LINA”) relating to pain from the amputation of her right leg and adjustment to a prosthesis. LINA initially approved the claim. However, right before Ms. Chalk received the maximum short-term disability benefits, on October 16, 2024, LINA terminated them. While she was appealing this decision, Ms. Chalk submitted a separate claim to LINA for long-term disability benefits on October 30, 2024. The parties agree that Ms. Chalk submitted this claim for long-term disability benefits and that LINA failed to issue notice of its decision regarding the long-term disability claim within 45 days in violation of 29 C.F.R. § 2560.503-1(f)(3). There is also no dispute that Ms. Chalk is deemed to have exhausted her administrative remedies, and is entitled to sue for these benefits under Section 502(a)(1)(B), as she has done in this lawsuit. Rather, the dispute before the court was whether LINA should have the opportunity to decide the claim now despite its failure to conduct a review of it within ERISA’s statutory deadline. LINA believed so. It moved the court to order an administrative remand so it could consider the claim in the first instance, and for the case to be stayed pending that process. Ms. Chalk objected. She argued that remand is not an appropriate remedy because it would function as a reward for LINA’s inaction and would frustrate the purposes of ERISA. She further argued that the administrative record is sufficiently developed in this case because LINA already made a determination with respect to her claim under the short-term disability policy. Thus, she argued, the court should conduct a de novo review of her long-term disability claim and should decide the issue of disability based upon the information already developed. In addition, Ms. Chalk requested that even if the court grants LINA’s motion for remand, that it order LINA “pay [her] LTD benefits to date, continue to provide her benefits while they perform the claim review, and reimburse her attorneys’ fees and costs.” The court decided to order a remand. It agreed with LINA that the problem here was a procedural violation which prevented a full and fair review and that this failure resulted in an incomplete and insufficient administrative record regarding the long-term disability claim. Under these circumstances, the court concluded that case law supports remand. Accordingly, the court granted LINA’s request for an administrative remand, despite its violations of ERISA’s claims handling procedures, and ordered LINA to conduct a full and fair review of Ms. Chalk’s long-term disability claim under the policy. The court, however, denied LINA’s request for a stay. It held that this request was moot in light of this chosen remedy. Finally, the court ended its decision by expressing an openness to Ms. Chalk’s requests for damages including past-due benefits and attorneys’ fees and costs. Although it did not conclusively issue any rulings regarding these requests, it stated that there is at least the possibility that Ms. Chalk may be entitled to some or all of them. Accordingly, the court permitted her to file a more formal motion for attorneys’ fees and costs under Section 502(g)(1), as well as a more formal request for an award of benefits.

Venue

Sixth Circuit

Janosky v. United Surgical Partners International, Inc., No. 25-68-DLB-CJS, 2025 WL 3022319 (E.D. Ky. Oct. 29, 2025) (Judge David L. Bunning). This putative class action is a tobacco surcharge ERISA case brought against a corporate owner of hundreds of medical and surgical facilities, defendant United Surgical Partners International, Inc. Before the court was United Surgical’s motion to change venue, in which it sought to transfer the case to the Northern District of Texas, Dallas Division pursuant to 28 U.S.C. § 1406(a) and 28 U.S.C. § 1404(a). Plaintiff Dara Janosky, a resident of Kentucky, filed a response in opposition on behalf of herself and the putative nationwide class. In its order the court agreed with defendant that transfer to Texas is proper pursuant to both Sections 1406(a) and 1404(a). With regard to 28 U.S.C. § 1406(a), the court concluded that ERISA’s venue statute has not been satisfied because (a) the benefit plan at issue is administered in the Northern District of Texas, (b) United Surgical does not have minimum contacts with Kentucky (none of its 551 facilities are located in the state), and (c) each of the claimed breaches concerning the design and administration of the welfare plan took place in Dallas, not Kentucky. Furthermore, the court stated that even if it agreed that venue was legitimate in Kentucky under ERISA, transfer was warranted pursuant to 28 U.S.C. 1404(a). Weighing the factors, the court concluded that the convenience of witnesses, location of documents, locus of operative facts, availability to compel witnesses, and trial efficiency all weighed in favor of defendant. While the court did conclude that the relative means of the parties weighed slightly in favor of Ms. Janosky, this factor alone was not determinative. All of the remaining factors were considered neutral by the court, including the convenience of the parties, the forums’ familiarity with ERISA, and the weight accorded to plaintiff’s chosen forum. In sum, the court found that the relevant factors, when looked at as a whole, support transferring this case to the Northern District of Texas. In fact, the court stated that Ms. Janosky’s residence is the only connection to the state of Kentucky and noted that she works remotely for United Surgical in Ohio. Altogether, the court was convinced that defendant satisfied its burden to demonstrate that transfer was appropriate, and thus it granted the motion to change venue and ordered the case transferred to the Northern District of Texas.