ERISA Litigation Roundup: Ninth Circuit Partially Reverses Dismissal of Two Proposed Class Actions

The U.S. Court of Appeals for the Ninth Circuit partially reversed the dismissal of two proposed class actions alleging mismanagement of separate 401(k) plans in violation of ERISA. In Davis v., Inc., 2022 WL 105557 (9th Cir. Apr. 8, 2022), participants in 401(k) plan claimed that, its board of directors, investment committee and executives breached their fiduciary duties by imprudently selecting and retaining relatively high-cost investments and failing to investigate less expensive alternatives, despite the availability of lower-cost options with identical or substantially similar underlying assets. The district court dismissed the plaintiffs’ complaint in its entirety, noting that it lacked adequate factual support. Specifically, the district court held that the allegations regarding alternative share classes, without more, were insufficient to state a claim; the complaint improperly attempted to compare passive funds with actively managed funds; and there is no obligation to offer alternatives such as collective investment trusts (CITs), and, in any event, CITs are not meaningful comparators to mutual funds.

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About Author: W. Glenn Merten

Glenn Merten, a sought-after litigator, represents insurance carriers, service providers and financial institutions in class actions, complex litigation and administrative proceedings. He is the co-leader of the firm’s ERISA litigation team and a member of both the Insurance and Benefits and Executive Compensation practice groups. With more than two decades of experience guiding clients through compliance issues and alternative dispute resolution, Glenn helps shield clients from the cost and risk of litigation. He often represents clients in high-stakes internal investigations and regulatory enforcement actions. View all posts by and

About Author: Elizabeth A. Charles

Elizabeth Charles supports clients in litigation and dispute resolution. View all posts by and

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