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Amicus Brief of Encore Fiduciary to SCOTUS, Urging Stronger Pleading Standards in ERISA Fiduciary Breach Cases (PDF)

"Excessive fee lawsuits have become a lucrative way for a small group of plaintiffs' firms to monetize ERISA's fiduciary provisions.... Petitioners in this case -- who have already lost on their Section 1104 claim -- ask the Court to construe a neighboring provision to create a form of duplicative liability that would be even more susceptible to misuse." Cunningham v. Cornell Univ., No. 21-0088 (2d Cir. Nov. 14, 2023; cert. pet. granted Oct. 3, 2024)]

HP Forfeiture Decision Validates That a Fiduciary's Primary Responsibility Is to Provide Promised Benefits, Not Reduced Participant Fees

"[T]he court confirmed that the goal of ERISA fiduciary law is to ensure that plan participants receive their promised benefits. This formula should be applied to dismiss any forfeiture liability claim in which the plan fiduciaries faithfully followed the terms of plan documents and the long-settled fiduciary practice to offset forfeitures against further contributions." [Hutchins v. HP Inc., No. 23-5875 (N.D. Calif. Feb. 5, 2025)]

Sixth Circuit Decision Allows a Performance Standard to Judge the Fiduciary Prudence of 401(k) Plan Investment Decisions

"If allowed to stand, America's plan fiduciaries can be held liable for fiduciary imprudence if they fail to choose the top performing funds in the market or [fail to] beat the S&P 500 index -- even if they never intended to offer a higher-risk investment strategy. The dissent makes the key point that ERISA imposes 'standards of conduct, not standards of performance.' The Sixth Circuit has thus 'open[ed] the door' to speculative ERISA class action lawsuits based on unfair performance standards." [Johnson v. Parker-Hannifin Corp., No. 24-3014 (6th Cir. Nov. 20, 2024)]

Euclid Fiduciary to the U.S. Supreme Court: Use Fiduciary Underwriting Factors to Stop Meritless Excessive Fee Cases Being Filed Against Prudent Plan Sponsors

"Euclid demonstrated to the Court that many of the misleading claims can be rebutted at the initial stage of the case based on [DOL] mandated fee and investment disclosures that are available to participants. These fee disclosures and more accurate benchmarks ... are exactly what fiduciary underwriters use every day to underwrite fiduciary best practices. And this more accurate information and proper fee benchmarking must be used by district courts to weed out the many meritless cases being filed against prudent sponsors of quality defined contribution plans." [Hughes v. Northwestern Univ., No. 18-2569 (7th Cir. Mar. 25, 2020; cert. pet. granted No. 19-1401, Jul. 2, 2020; amicus brief of Euclid Fiduciary filed Oct. 27, 2021)]

The Cornell Supreme Court Decision Sanctions ERISA Fiduciary-Breach Lawsuits Without Proof of Wrongdoing

"The Court sanctioned Schlichter's position that an ERISA prohibited transaction claim can be filed with bare-bones allegations that an employee benefit plan entered into a service provider contract -- something that is essential to run every modern plan.... [N]ow all excessive fee lawsuits, including the new genre of excessive fee lawsuits against health plans, will be recast as prohibited transaction claims to avoid a motion to dismiss. This distorts ERISA beyond any possible legislative intent." [Cunningham v. Cornell Univ., No. 23-1007 (S.Ct. Apr. 17, 2025)]

Fiduciary Standard of Perfection, No Discretion, and Hindsight Second-Guessing Is Rejected in the Prime Healthcare Trial

"The trial decision is yet another example demonstrating how the current slate of excess fee and imprudent investment fiduciary-breach cases constitute improper second-guessing of the discretionary fiduciary decisions of America's plan sponsors. When required to prove their manufactured excess fee claims, plaintiff lawyers use junk expert testimony that attempts to distort the fiduciary standard of care from customary industry fiduciary practice into guaranteeing best possible results." [In re Prime Healthcare ERISA Litig., No. 20-1529 (C.D. Calif. Aug. 22, 2024)]

Conservative Investment Strategies On Trial: Milliman Overcomes Fiduciary Breach Challenge

"The challenge to Milliman's hedging strategy is yet another in a growing list of breach-of-fiduciary duty performance cases filed by the trial bar challenging conservative investment strategies as imprudent.... If allowed to continue, plan fiduciaries will be forced to offer higher risk, aggressive investment strategies to avoid fiduciary litigation and liability -- a perverse incentive that is not consistent with ERISA fiduciary law under which preservation of investment capital is a legitimate investment goal." [Mattson v. Milliman, No. 22-0037 (W.D. Wash. Jun. 17, 2024)]

The Goldman Sachs Investment Performance Appellate Victory: How a Robust Fiduciary Process Helps Disprove the Disloyalty Claim for Proprietary Investments

"It is way too easy to bring a claim of fiduciary disloyalty, as courts give the benefit of doubt to plan participants who bring these claims. But the Goldman Sachs case shows how a prudent process of engaged and diligent fiduciaries can be used to rebut the unfounded claims of disloyalty and fiduciary imprudence on a summary judgment record. The case hopefully will give support for district court judges to grant summary judgment in more performance cases even when proof of fiduciary prudence is inherently fact intensive." [Falberg v. The Goldman Sachs Group, Inc., No. 22-2689 (2d Cir. Feb. 14, 2024)]

The Key Fiduciary Liability Storylines of 2022

"The risk environment for fiduciaries of America's employee benefit plans continues to heighten, as creative and enterprising plaintiff lawyers discover new ways to engineer fiduciary risk for plan fiduciaries in America's judicial system. This past year, politicians and regulators have added further uncertainty and risk for plan fiduciaries. [This article provides] a summary of the key fiduciary liability stories from the past year, and the implications for what might lie ahead in 2023 and beyond."

The Hy-Vee Summary Judgment Record Highlights Unfair Fiduciary Malpractice Lawsuits Against Large Plan Sponsors

"This case reinforces four key points that animate most excess fee cases: [1] We must allow plan fiduciaries to correct the record at the pleading stage when a complaint is based on false fee amounts; [2] We cannot allow complaints to use misleading benchmarks from random plans instead of real context of the entire market of what all large plans pay; [3] It is unfair to allow plaintiff lawyers to regulate fiduciary liability unless they can show a clear lack of any fiduciary process.... and [4] Recordkeeping is not commoditized for all large plans." [Rodriguez v. Hy-vee, Inc., No. 22-0072 (S.D. Iowa Mar. 7, 2024)]