Breach of Fiduciary Duty

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Peters v. Aetna Inc., No. 19-2085, __ F.3d __, 2021 WL 2546412 (4th Cir. June 22, 2021) (Before Circuit Judges Agee, Floyd, and Thacker)

In this case, the Fourth Circuit covers the whole shebang of ERISA: standing, fiduciary status, party in interest status, restitution, surcharge, disgorgement, and declaratory and injunctive relief for both an individual and a class. This opinion, which reads like an ERISA treatise, serves as a reminder of the many layers that exist within ERISA and its equity-based common law. What is not layered is the issue at the core of the suit: money.  
Continue Reading Fourth Circuit Largely Rules for Plaintiffs in Class Action Challenge to Aetna/Optum Billing Practices

Becker v. Wells Fargo & Co., et al., No. 20-2016 (DWF/BRT), 2021 WL 1909632 (D. Minn. May 12, 2021) (Judge Donovan W. Frank). 

The Notable Decision this week exemplifies a recent trend in the courts to allow 401(k) participants in litigation challenging the appropriateness of certain investments to move forward on their class action complaints even where the named plaintiff is not invested in all of the funds being challenged.

In this case against Wells Fargo, Yvonne Becker, a single named plaintiff, brought this putative class action alleging breach of fiduciary duty and prohibited transactions for selecting and retaining 17 Wells Fargo proprietary funds for its own 401(k) plan. She alleges that these funds not only underperformed their benchmarks, but that the fees are higher than similar non-proprietary funds. In addition, she alleges that Wells Fargo added newly launched proprietary funds that had no historical performance to evaluate whether they were appropriate investment options for the plan. Becker claims the higher fees on the proprietary funds increases the salaries for executives who serve as the plan’s fiduciaries and were used as seed money for the newly launched funds. Becker invested her 401(k) savings in Wells Fargo/State Street Target Date Collective Trusts, one of several investment options being challenged.
Continue Reading District Court Denies Wells Fargo’s Motion to Dismiss Proprietary Funds Case

Bafford v. Northrop Grumman Corporation, No. 20-55222, __ F.3d ___, 2021 WL 1419055 (9th Cir.  2021) (Before Boggs, Smith, and Murguia, Circuit Judges).

This week’s notable decision is a significant Ninth Circuit victory for pension plan participants represented by attorneys from Kantor & Kantor, LLP, and Renaker Hasselman and Scott LLP.  In this published decision, the Ninth Circuit clarified that ERISA does not preempt state-law negligence claims against the plan’s third-party administrator, Hewitt, for its carelessness in miscalculating plan benefits. The court also ruled that online requests for pension benefit statements may constitute “written requests” for benefit statements for purposes of ERISA Section 105, 29 U.S.C. § 1025. The decision was not a complete victory for the participants, however, as the Ninth Circuit also concluded that the miscalculation of benefits by Hewitt involved ministerial and not fiduciary functions, and therefore none of the defendants could be held liable for fiduciary breach under ERISA based on Hewitt’s miscalculations.
Continue Reading Pension Plan Service Providers and Administrators May Be Liable for Misstated Benefits, Even Though Miscalculations Are Not Fiduciary Breaches