Welcome to Goodwin's ERISA Litigation Update. Litigation involving ERISA-governed benefits plans has exploded in recent years. Lawyers in our award-winning ERISA Litigation practice have extensive experience litigating these cases across the country, as well as representing clients in Department of Labor investigations. The ERISA Litigation Update will gather notable developments in this space, including important court decisions and appeals as well as regulatory guidance, and provide information regarding those developments on a quarterly basis.
For more information about Goodwin's ERISA Litigation practice or to read our publications, please visit our practice page.
1. Ninth Circuit Affirms Grant of Motion to Dismiss in Investment Selection and Monitoring Case
Key Takeaway: The Ninth Circuit affirmed the dismissal of a lawsuit alleging that plan fiduciaries had breached their duties by including investment options with exposure to hedge funds and private equity funds.
On May 22, 2025, the Ninth Circuit affirmed the grant of a motion to dismiss for Intel Corp. (Intel) in a lawsuit regarding Intel's 401(k) plan. The plaintiffs alleged that the Intel plan's fiduciaries had breached their duties of prudence and loyalty by including as plan investment options investments with exposure to hedge funds and private equity funds. They further alleged that, in doing so, the defendants had favored investments that benefited Intel's venture capital arm, providing a benefit to Intel. The district court first dismissed the lawsuit in 2021. The plaintiffs then amended, and the amended complaint was largely dismissed in 2022. The plaintiffs appealed the dismissal order.
The Ninth Circuit affirmed dismissal on the grounds that the plaintiffs had failed to adequately allege a breach of fiduciary duties. The court held that, where a complaint alleges breach in the selection of certain plan investment options rather than others but lacks direct allegations of fiduciary breach — as this one did — the plaintiffs must allege sufficient circumstantial evidence of a breach through the use of a meaningful benchmark. The plaintiffs had failed to allege a meaningful benchmark in this case because the investments to which they compared the at-issue investments had greater exposure to equities than did the at-issue funds. The court also rejected the plaintiffs' argument that they need not plead a meaningful benchmark because they alleged that the use of investments with private equity and/or hedge fund exposure in a 401(k) plan was unusual, which the court interpreted as an argument that the use of such investments in a 401(k) plan is per se improper. The court ruled that these investments were not per se improper because under the Employee Retirement Income Security Act (ERISA), fiduciaries can include investment options with varying degrees of risk.
The case is Anderson v. Intel Corp. Investment Policy Committee, No. 22-16268, in the Ninth Circuit Court of Appeals. The decision is available here.
2. Sixth Circuit Affirms Dismissal of Claims Challenging Recordkeeping Fees
Key Takeaway: The Sixth Circuit affirmed the district court's dismissal of a complaint alleging overpayment of recordkeeping fees and reaffirmed its approach of carefully scrutinizing ERISA complaints.
On May 6, 2025, the Sixth Circuit affirmed the district court's dismissal of a complaint filed against Denso International America, Inc. (Denso), among others, that challenged Denso's alleged overpayment of recordkeeping fees in connection with its 401(k) plan. More specifically, the plaintiffs alleged Denso's plan had paid its recordkeeper more than double what it should have and pointed to the lower fees paid by 15 plans the plaintiffs claimed were comparable. The district court dismissed the complaint for "failing to set forth the required 'context specific' facts — such as the types and quality of services provided — to render plausible an ERISA overpayment-for-recordkeeping-services claim." The plaintiffs appealed.
The Sixth Circuit affirmed. In doing so, it rejected the plaintiffs' argument that the 15 selected plans were comparable, explaining that "nothing in plaintiffs' complaint permits [the court] to reasonably infer a breach of the duty of prudence." The court explained that the complaint failed to provide any details concerning the specific types or quality of services the comparator plans received, and the complaint itself admitted that there were variations in the level and quality of services across the plans. The court stated that the plaintiffs' failure to explain the differences or show a meaningful benchmark left it "unable to evaluate whether the fee is excessive" under the circumstances.
The case is England v. Denso International America Inc., No. 24-1360, in the Sixth Circuit Court of Appeals. The decision is available here.
3. Investment Manager Prevails at Trial in Class Action Challenging Selection and Monitoring of Affiliated Funds
Key Takeaway: The court ruled after a bench trial that the defendants had not breached their fiduciary duties of loyalty and prudence when selecting and maintaining mutual funds affiliated with the plan sponsor in the sponsor's 401(k) plan.
On June 26, 2025, the US District Court for the District of Massachusetts issued a complete defense verdict following a 10-day trial earlier in 2025. The plaintiff alleged that Natixis Investment Managers, LLC (Natixis) and the committee responsible for overseeing Natixis' 401(k) plan had breached their fiduciary duties by selecting and maintaining in the plan mutual funds affiliated with Natixis alongside several plan investment options not affiliated with Natixis. The case proceeded to a bench trial in January and February 2025. At trial, the plaintiff argued that the defendants' processes were generally imprudent and/or disloyal and focused on five specific plan investment options, asking for damages based on the decisions to include those funds in the plan.
In the court's 86-page ruling, it rejected both the plaintiff's "wholesale" theory regarding planwide breaches and arguments regarding each of the funds on which the plaintiff focused. As to the former, the court found that the defendants had not acted disloyally when constructing the plan lineup as a whole, because the committee members testified that they believed the affiliated funds used in the plan were the best options for plan participants and because they had also included unaffiliated funds in the plan. The court also found that the defendants had acted prudently as to the lineup as a whole; for example, the court found persuasive the committee's use of independent investment consultants and legal advisers. Next, the court rejected the plaintiff's arguments as to the five specific plan investments challenged at trial. For four of the five, the court found that the plaintiff had failed to prove a breach of duties. For the fifth, a fund that was unaffiliated with Natixis during the class period, the court ruled that the plaintiff had failed to show loss for allowing that fund to remain in the plan because he had not shown that the replacement proprietary fund was imprudent, and he offered no evidence that there was a loss compared to the replacement.
The case is Waldner v. Natixis Investment Managers, No. 21-10273, in the US District Court of Massachusetts. The decision is available here. Goodwin represents the defendants in the case.
4. Jury Awards $38.7 Million to the Plaintiffs in a Case Challenging Excessive Recordkeeping and Investment Management Fees
Key Takeaway: The Pentegra case is one of a few to be tried before a jury and is the only recent case in which substantial damages were awarded in the plaintiffs' favor.
On April 23, 2025, a jury in the Southern District of New York awarded the plaintiffs $38,760,232 in a case challenging the plan's administrative and investment management fees as excessively costly. The case is unusual because it is one of a handful of cases to be tried before a jury — in many other cases, courts have stricken jury demands — and is the only recent case to have awarded substantial damages to the plaintiffs.
Although the jury did not explain the rationale for its findings or for awarding damages, several points raised in the plaintiffs' pretrial briefing could have impacted the jury's decision. For example, the plaintiffs noted that the plan used a recordkeeper affiliated with the defendant, noted that the plan was the recordkeeper's second-largest client, and pointed to evidence that the defendant was actively trying to grow its affiliate recordkeeper. The plaintiffs further flagged that the plan's affiliated recordkeeper helped pick the plan's committee members and that the plan never conducted an RFP for recordkeeping services, which was allegedly suggestive of an imprudent process. Finally, with respect to damages, it is also notable that the $38.8 million damages awarded was on the low end of the range of damages proposed by the plaintiffs. Three of the plaintiffs' proposed damages ranges started at $78 million or higher.
After the jury announced its award, the parties announced on July 2, 2025, that they would settle the matter — including prohibited transaction claims not resolved by the jury — for $48.5 million and non-monetary, affirmative relief.
The case is Khan v. Board of Directors of Pentegra Defined Contributions Plan, No. 20-7561 (S.D.N.Y.).
5. District Courts Continue Trend in Dismissal of Forfeiture Claims
Key takeaway: Several district courts in the Ninth Circuit have recently dismissed claims challenging the use of forfeitures to reduce companies' employer contributions, reflecting a growing trend toward early dismissal.
On April 30, 2025, the US District Court of Arizona dismissed a complaint filed against Knight-Swift challenging its allocation of forfeited employer contributions. On May 2, 2025, the US District Court for the Central District of California dismissed a complaint likewise challenging the allocation of forfeitures filed against a plan sponsor as well as the plan's administrative committee. Finally, on June 13, 2025, another district judge in the Central District of California dismissed similar claims filed against JPMorgan Chase. Each of the complaints — like others filed in the last two years — alleged that the defendants violated ERISA by allocating plan forfeitures to reduce their own company contributions to the plan rather than to pay plan administrative expenses.
The three decisions emphasize that ERISA does not create a duty to maximize pecuniary benefits for participants. Rather, ERISA protects only the benefits due to an employee under the terms of the plan. The decisions accordingly adopted the reasoning in Hutchins v. HP that a plan sponsor or fiduciary's decision to allocate forfeitures toward reducing its employer contributions, without more, is insufficient to state a claim for a breach of ERISA's fiduciary duties of loyalty or prudence. Hutchins is currently pending appeal in the Ninth Circuit Court of Appeals.
The cases are Sievert v. Knight-Swift Transportation Holdings, Inc., No. 24-02443, available here; Madrigal v. Kaiser Foundation Health Plan, Inc., No. 24-05191, available here; and Wright v. JPMorgan Chase & Co., No. 25-00525, available here. Related claims were also dismissed with prejudice against Nordstrom and its retirement plan committee on June 23, 2025, in the US District Court for the Western District of Washington. In that case, the plan language required that forfeitures first be used to restore previously forfeited amounts and then to reduce the employer's own contributions. That case is McWashington v. Nordstrom, Inc., No. 24-1230, which is available here.
6. Upcoming Events
Speaking Engagement: Fiducient Advisors 2025 Investor Conference
(September 17, 2025)
Jamie Fleckner, Goodwin partner, will be
speaking on a panel at the Fiducient Advisors 2025 Investor
Conference discussing the trend of OCIO in the retirement
space.
Speaking Engagement: RILA Retail Law Conference 2025 (October 9,
2025)
Jaime Santos and Crystal Kaldjob, Goodwin partners, will be
speaking on a panel at the RILA Retail Law Conference discussing
lawsuits challenging employer-sponsored health plan costs.
7. Recent Events
Speaking Engagement: DCIIA/SPARK Public Policy Forum (June 3-4,
2025)
Jamie Fleckner, Goodwin partner, spoke on the
panel "Are Retirement Plans Facing a Litigation Tipping
Point?" at the DCIIA/SPARK Public Policy Forum and at a Plan
Sponsor Institute (PSI) Roundtable following the Forum.
8. Recent Insights
Client Alert: "DOL Abandons ESG Rule in Investment Duties
Regulation; Rescinds Cryptocurrency Guidance" (June 23,
2025)
Patrick Menasco, Bibek Pandey, Hasan Cetin, and John Cleary co-authored a Client Alert
discussing two major steps the DOL has taken that signal a shift in
its approach to fiduciary oversight under ERISA: abandoning the ESG
rule in investment duties regulation and rescinding cryptocurrency
guidance.
Client Alert: "Supreme Court Decides Pleading Standard to Allege
ERISA Prohibited-Transaction Claims, Favoring Plaintiffs"
(April 18, 2025)
Jamie Fleckner, Jaime Santos, Christina Hennecken, Isabel Marin, and Drew DiMaiti co-authored a Client Alert
discussing the Supreme Court's decision in Cunningham v.
Cornell University, which has significant implications for
nearly all employee benefit plans regulated by ERISA and for
businesses providing services to those plans.
9. Awards and Recognitions
Goodwin's ERISA Litigation practice received top ranking by Chambers USA and The Legal 500 US in 2025. Congratulations to Alison Douglass, Jamie Fleckner, Christina Hennecken, Mike Isenman, Matt Riffee, Dave Rosenberg, and Jaime Santos on being recognized in this year's tables.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
