ERISA Litigation Roundup: Northern District of Illinois Dismisses ERISA Stock-Drop Suit

On August 23, 2021, the U.S. District Court for the Northern District of Illinois dismissed an ERISA stock-drop lawsuit brought against fiduciaries of Kraft Heinz Food Company’s employee stock ownership plan (ESOP), holding that the plaintiffs failed to meet the “more harm than good” pleading standard set forth in Fifth Third Bancorp v. Dudenhoeffer, 573 U.S. 409, 428 (2014). Osborne v. Emp. Benefits Admin. Bd. of Kraft Heinz, No. 20-cv-2256, 2021 WL 3725613 (N.D. Ill. Aug. 23, 2021).

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ERISA Litigation Roundup: Federal District Court Finds ERISA Plan Participants Lack Standing to Challenge Cross-Plan Offsetting

A federal judge in the U.S. District Court for the District of Minnesota dismissed breach of fiduciary duty claims against UnitedHealth Group, holding that participants in ERISA-governed, employer-sponsored health plans lack standing to challenge UnitedHealth Group’s practice of cross-plan offsetting because they have not been denied any benefits and have not been individually injured. The decision underscores the Supreme Court’s ruling that plaintiffs must demonstrate individual injury in order to assert breach of fiduciary duty claims under ERISA.

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ERISA Litigation Roundup: Ninth Circuit Affirms Dismissal of ERISA Stock-Drop Suit

On April 19, 2021, in Wilson v. Craver, No. 18-56139, 2021 WL 1523253 (9th Cir. Apr. 19, 2021), the U.S. Court of Appeals for the Ninth Circuit affirmed the dismissal of an ERISA stock-drop lawsuit brought against fiduciaries of Edison International’s employee stock ownership plan (ESOP), holding that the plaintiff failed to meet the “more harm than good” pleading standard set forth in Fifth Third Bancorp v. Dudenhoeffer, 573 U.S. 409, 428 (2014).

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Federal Courts Continue to Dismiss ERISA Stock-Drop Claims Post-Jander

Ever since the Supreme Court’s decision in Fifth Third Bancorp v. Dudenhoeffer, 573 U.S. 409 (2014), plaintiffs’ attorneys have been trying to crack the code for pleading an ERISA duty-of-prudence claim against fiduciaries of employee stock ownership plans (ESOPs) following a drop in the company’s stock price. Those attempts have been largely unsuccessful, with the notable exception of Jander v. Retirement Plans Committee of IBM, 910 F.3d 620 (2d Cir. 2018), vacated and remanded, 140 S. Ct. 592, reinstated, 962 F.3d 85 (2d Cir. 2020). When the Supreme Court granted certiorari in Jander, many ERISA lawyers expected the Court to clarify how a plaintiff could satisfy the Dudenhoeffer standard while still preventing meritless stock-drop claims. But as it often does, the Supreme Court ducked the issue and remanded the case without addressing the merits.

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