In a unanimous decision, the U.S. Supreme Court ruled in Cunningham v. Cornell University that plaintiffs can satisfy the requirements for pleading prohibited party-in interest transactions under ERISA section 406(a) without alleging facts disproving the availability of a statutory exemption for such transactions, such as where no more than reasonable compensation is paid for necessary services. No. 23-1007 (U.S. Apr. 17, 2025). As a result, plaintiffs may be able to withstand motions to dismiss such claims even where the underlying pleadings are found insufficient to sustain a fiduciary breach claim based on the same conduct. Recognizing the risks posed by potentially frivolous claims proceeding into discovery, the Supreme Court coupled its ruling with specific advice as to how district courts can mitigate these risks.

A California district court recently denied a motion to dismiss claims that the fiduciaries of a 401(k) plan breached their ERISA fiduciary duties of prudence and loyalty by selecting underperforming, high-cost investments and causing the plan to pay excessive fees for services.  The decision is notable for illustrating how pleading standards in investment performance and

Defense counsel frequently lament the difficulties of defending 401(k) investment and recordkeeping fee litigation when different judges render conflicting rulings on motions to dismiss seemingly indistinguishable complaints.  Even when the judges purport to apply the same legal standards, the outcomes can differ.  For that reason, we thought it would be interesting to track the decisions

A federal district court in California granted defendants’ motion to dismiss claims asserted by Chevron 401(k) plan participants that the plan fiduciaries breached their ERISA fiduciary duties by selecting underperforming investment options and permitting the plan to pay excessive fees.

As a preliminary matter, the court dismissed plaintiffs’ duty of loyalty claims because they failed