On May 9, 2024, Seyfarth attorneys Ada Dolph, Thomas Horan, and Diane Dygert filed an amicus brief with the United States Supreme Court in the case of Bugielski v. AT&T Services, Inc. and AT&T Benefit Plan Investment Committee. The brief was submitted on behalf of The ERISA Industry Committee (ERIC), the American Benefits Council (ABC), the Committee on Investment of Employee Benefit Assets (CIEBA), and the SPARK Institute.
The purpose of this amicus brief is to support a petition to the Court for a writ of certiorari to the Ninth Circuit Court of Appeals in the ongoing excessive fee litigation case of Bugielski v. AT&T. The central issue in this case revolves around whether the plan sponsor had a duty to consider the fees received by their recordkeeper from a brokerage account and managed account provider in evaluating the overall reasonableness of the recordkeeper's compensation. The case holds significance because the Ninth Circuit adopted an interpretation of ERISA that makes routine service provider agreements preemptively unlawful, which would have significant implications for retirement plan sponsors, fiduciaries, and service providers.
Notably, this amicus filing follows a similar submission by Seyfarth on behalf of the same organizations in the Ninth Circuit, in support of AT&T's prior petition for rehearing en banc. Last fall, a Ninth Circuit panel overturned a District Court decision in favor of AT&T, and ruled that there were questions of fact as to whether AT&T had breached its fiduciary duties. One of the key factors in that panel's decision was whether AT&T's agreement to amend an existing service contract constituted a "prohibited transaction" under ERISA.
Bugielski v. AT&T has broader implications for retirement plan management, fiduciary obligations, and the ongoing debate over excessive fees. Its outcome could shape how employers and plan sponsors approach fee structures and meet participant interests, if the law stands as an impediment to obtaining services from third party providers.
The complete amicus brief can be accessed here.