The federal courts took a breather after the last two weeks of frantic compliance with the Civil Justice Reform Act’s September 30 deadline, so it was a slow week in ERISAland, with no notable decisions. (The Eleventh Circuit’s en banc ruling yesterday in Bolton v. Inland Fresh Seafood Corp. was announced too late for press time, so we’ll cover it next week.)
Nonetheless, read on to learn about (1) what happens if you are a plan fiduciary, you don’t pay premiums to keep the plan’s insurance coverage in force, and the Department of Labor gets involved (Sonderling v. Sills); (2) preliminary approval of an $850k class action settlement involving alleged mismanagement of the Hess Corporation’s 401(k) plan (Wagner v. Hess); (3) the invalidation of Illinois-law arbitration awards because they were preempted by ERISA (Cigna v. Laboratory Physicians); (4) a case ruling that while ERISA might require investment policy statements to be produced on request, it didn’t matter here because plaintiffs lacked standing to complain about it (Phillips v. CAES); and last, but not least, (5) a case holding, quite sensibly, that you can’t release claims that haven’t accrued yet (Cude v. Lincoln).
We’ll be back next Wednesday with coverage of Bolton and the rest of the week’s cases.
Below is a summary of this past week’s notable ERISA decisions by subject matter and jurisdiction.
Breach of Fiduciary Duty
Fifth Circuit
Sonderling v. Sills, No. 26-30272, __ F. App’x __, 2026 WL 3001434 (5th Cir. Oct. 6, 2026) (Before Circuit Judges Davis, Stewart, and Duncan). Kelly Sills was the president and sole owner of Coastal Bridge Company, LLC, which sponsored an employee welfare benefit plan offering (1) fully insured dental and vision coverage through Ameritas, (2) fully insured cancer, accident, and critical illness coverage through Guardian, and (3) self-insured medical coverage administered by Blue Cross and Blue Shield of Louisiana under an administrative services agreement. Sills was an authorized signatory on Coastal’s bank account and directed its finances, including the disposition of plan assets; Coastal’s CFO testified that he was the ultimate decisionmaker on which bills got paid. In 2019, Coastal stopped forwarding employee contributions to Ameritas and Guardian, and both insurers terminated coverage that year. Coastal nonetheless kept withholding contributions from employee paychecks through the end of the year. It also sporadically failed to reimburse Blue Cross, resulting in payment suspensions and denied claims. In January 2020, Sills terminated all coverages retroactive to December 2019, and did not timely execute a run-out agreement. Months later he signed a check to Blue Cross covering claims that had already been processed and paid, but this left $172,351.35 in unpaid medical expenses for other claims. The Secretary of Labor brought this action against Sills in 2023 and served requests for admission, which Sills never answered. He was therefore deemed to have admitted that he “had and exercised discretionary authority, control, and responsibility over Plan management and administration and exercised actual control over Plan assets,” and that he “was a fiduciary and a party in interest” under ERISA. The Secretary then moved for summary judgment, supported by a statement of uncontested facts citing the unanswered admissions, Sills’s deposition, and sworn statements from the Department’s investigator, the CFO, and the insurers. Sills filed several responses without leave and a Rule 56(d) motion for discovery, but never responded to the statement of facts. As a result, the district court deemed the facts admitted, found them supported by the record, and found no genuine dispute about his functional fiduciary status. It entered judgment for the Secretary in the amount of $209,466.34 plus interest and permanently enjoined Sills from serving as a fiduciary to any ERISA plan. It also denied Sills’s Rule 56(d) request and rejected his Rule 59(e) motion as duplicative. (Your ERISA Watch covered this ruling in our March 18, 2026, edition.) Sills appealed and the Fifth Circuit affirmed in this unpublished per curiam decision. The appellate court first rejected Sills’s contention that the district court had granted summary judgment “by default” through the local rule. Because Sills never controverted the Secretary’s statement of facts, the district court properly treated it as undisputed, verified that the record supported it, and then assessed whether the Secretary was entitled to judgment. His reply brief argument that he had in fact responded to the requests for admission fared no better. The court ruled that this argument was raised too late, and in any event Coastal’s corporate responses could not stand in for his own individual responses. On the merits, the court agreed with the district court that Sills was performing a fiduciary function when he took the actions at issue, i.e., failing to remit contributions and failing to pay Blue Cross’s invoices. It was “of no moment” that the administrative services agreement was signed by Coastal’s HR director or named Coastal as the plan sponsor and named fiduciary, and Sills’s “professed delegation” of plan tasks did not absolve him of responsibility. The court was equally unmoved by Sills’s challenges to causation, damages, and relief. He argued that a third-party surety controlled Coastal’s receivables, but the court held that a sponsor’s insolvency or a third party’s control of its receivables does not excuse a fiduciary’s failure to remit contributions, and in any event the surety played no role in the medical claims. Furthermore, Sills was not entitled to a credit for the amount he paid Blue Cross, because that payment reimbursed claims already processed and paid; they “are not part of the…denied-claims component of the court’s judgment, so no offset or further reconciliation is due.” Finally, the panel found no abuse of discretion in the denial of Rule 56(d) relief, as Sills submitted no affidavit or declaration “and he acknowledges the admission.” Nor did the district court err in denying the Rule 59(e) motion, which “merely reiterated his summary-judgment arguments.” The judgment against Sills was thus affirmed in its entirety.
Class Actions
Fifth Circuit
Wagner v. Hess Corp., No. 6:24-CV-004-H, 2026 WL 3034350 (N.D. Tex. Oct. 9, 2026) (Judge James Wesley Hendrix). In 2024, Joshua Wagner, a former Hess Corporation (recently acquired by Chevron) employee and participant in the Hess Corporation Employees’ Savings Plan, a 401(k) plan, sued Hess and the Hess Corporation Investment Committee on behalf of himself, the plan, and similarly situated participants. Hess had delegated to the Investment Committee the responsibility for selecting and monitoring the plan’s investments. Wagner alleged that defendants breached their duty of prudence by failing to replace certain investments with indistinguishable or similar investments carrying lower expense ratios, causing millions of dollars in losses to participants through excessive fees. In March of last year, the court dismissed one of his claims, regarding certain single asset funds, and allowed him to file a third amended complaint. (Your ERISA Watch covered this ruling in our April 2, 2025 edition.) Wagner attacked that ruling and also moved to certify a class, while defendants moved for summary judgment. One month before the November 2025 trial date, the parties announced a class-wide settlement, and the court vacated the trial date. The court denied Wagner’s first, unopposed motion for preliminary approval without prejudice because the proposed class would have given relief to plan participants who were not actually injured by the alleged misconduct. The parties then negotiated a new settlement, which defines the class as participants and their beneficiaries and alternate payees who invested in any of the “Challenged Funds,” a set of funds that lost value, at any time from February 12, 2018, through entry of the preliminary approval order. The settlement creates a gross fund of $850,000, subject to a service award of up to $15,000 and a fee request of up to one-third. Wagner’s second motion for preliminary approval was again unopposed. The court first concluded that the settlement class satisfied Rule 23(a) and (b)(1)(B) for settlement purposes. The class was ascertainable because the court could determine membership from participation in the plan during the class period, and notice would go to those identified by the plan’s recordkeeper. With more than 6,000 members, numerosity was met, and commonality was satisfied because the claims focused on the defendants’ conduct toward the plan as a whole. Typicality followed because Wagner’s claims were identical to the class’s. On adequacy, Wagner had litigated actively for two-and-a-half years, there was no evidence of conflicts or side agreements, and the settlement does not depend on court approval of fees or the service award. The court noted the absence of reverter and clear sailing provisions that can raise conflict concerns. It then found the case a “paradigmatic example” of a Rule 23(b)(1)(B) claim, because any recovery “inures to the benefit of the plan as a whole.” The court next found the settlement “likely to be found fair at the final approval stage” under Rule 23(e)(2) and the Fifth Circuit’s Reed factors. Representation was adequate for the reasons above, and the settlement was negotiated at arm’s length after more than two years of litigation up to the eve of trial. As for the proposed relief, the court emphasized the risks of continued litigation. The parties disputed whether Wagner’s two theories could succeed. The first was that defendants should have mixed and matched individual funds, which the defendants called “novel.” The second was that they should have replaced the mutual funds wholesale, which would have helped most participants but harmed about ten percent, and which defendants said had been raised too late and failed on the merits. Because discovery was complete and summary judgment was ripe, “the parties [had] a good understanding of the likely outcomes and their expected value.” Wagner estimated that the settlement represented “nearly 70% of the total damages that [he] could currently obtain at trial.” Observing that the settlement also covers funds subject to the claim the court had previously dismissed, the court concluded that “seventy percent is highly beneficial.” The claims process, the fee provision, and a fee-sharing arrangement with a Kansas firm that had not appeared, which did not affect the net settlement amount, all supported approval, and class members were treated equitably because each would receive a pro rata share based on his or her Challenged Funds balance. The court then approved the remaining requests, including appointing Wagner as class representative, appointing class counsel, approving Analytics Consulting, LLC as settlement administrator, and approving the notice plan, claim form, and objection procedures. The motion was thus granted in full, the class was provisionally certified, and the settlement was preliminarily approved. A final approval hearing was set for February 17, 2027.
Disability Benefit Claims
Ninth Circuit
Cude v. Lincoln National Life Ins. Co., No. 8:25-cv-00123-AH-KESx, 2026 WL 3036131 (C.D. Cal. Oct. 9, 2026) (Judge Anne Hwang). Christopher Cude brought this action challenging the denial of his claim for ERISA-governed benefits under the Wells Fargo & Company Short Term Disability Plan, which was administered by Lincoln Financial Group. The plan barred suit until its claims and appeals procedures were exhausted, and required that any suit for benefits be brought within one year from the date of the final appeal determination. Lincoln denied Cude’s claim on September 7, 2023, advising him that he had 180 days to appeal. He appealed the same day. On February 5, 2024, while the appeal was pending, Cude signed a Confidential Settlement Agreement and General Release resolving an employment claim against Wells Fargo. In it he released the company and related parties from “any and all claims…known or unknown” that he might have “based on any actions or events which occurred prior to the date he executes this Agreement.” Less than three weeks later, on February 23, 2024, Lincoln issued its final denial, which told Cude that his “administrative right to review has been exhausted” and any suit had to be filed by February 23, 2025. Lincoln moved for summary judgment on the ground that Cude had released his short-term disability claim when he signed the release. The court framed the question as whether the release covered Cude’s ERISA claim, and it turned on when the claim accrued. Under Ninth Circuit authority, an ERISA claim accrues “either at the time benefits are actually denied, or when the insured has reason to know that the claim has been denied.” Benefits are actually denied only after the claimant exhausts the internal appeal process, and under Wise v. Verizon Communications, Inc., a claimant has reason to know when the plan communicates a “clear and continuing repudiation” of his rights such that he could not reasonably have believed that his benefits had not been finally denied. The court concluded that Cude’s claim accrued no earlier than February 23, 2024, the date of the final denial, which was after he signed the release. Lincoln argued that the claim accrued no later than September 7, 2023, i.e., before the release, because on that day it had denied Cude’s claim and Cude had submitted his appeal, but the court found that argument inconsistent with Wise, in which the claim accrued “only after…[the claimant was] informed that no further internal appeals were possible.” Because Cude was told he had exhausted his appeals only in the final denial, his claim accrued then. The court then examined the release, and under California law determined that the release’s plain terms did not reach a claim based on events occurring after its execution. The court acknowledged that the complaint also alleged conduct that predated the release, but it held that “the backward-looking Release does not waive an ERISA claim that was not ripe.” As a result, the court denied Lincoln’s motion for summary judgment and sua sponte granted Cude summary judgment on Lincoln’s tenth affirmative defense, the release defense.
Discovery
Ninth Circuit
Fortitude Surgery Center LLC v. Aetna Health Inc., No. CV-24-02650-PHX-KML, 2026 WL 3000501 (D. Ariz. Oct. 6, 2026) (Judge Krissa M. Lanham). Fortitude Surgery Center brought this action against two Aetna entities challenging Aetna’s denial of its claims under a number of health plans. Fortitude has already survived two motions to dismiss (detailed by Your ERISA Watch in our May 19, 2025, and September 24, 2025, editions). Now the parties are embroiled in a dispute over the standard of review and the scope of discovery. Fortitude sought leave to serve 25 interrogatories and 37 requests for production, and take two depositions: one of Aetna’s claim investigator and one under Federal Rule of Civil Procedure 30(b)(6). Aetna had agreed to answer some of the requests, but opposed others and objected to the depositions. Addressing the standard of review first, the court held that Fortitude had “effectively conceded” the issue under the doctrine of judicial admissions. Fortitude’s operative complaint alleged that Aetna “has full discretionary authority to make factual determinations, to determine eligibility for benefits, to determine the amount of benefits for each claim received, and to construe terms of the Plan with respect to benefits,” and Aetna’s answer agreed. Fortitude never amended its pleading or explained why its allegations were incorrect. It argued instead that it needed discovery to evaluate the language of the various plans, but the court observed that “for ERISA claims like this one the standard of review shapes discovery – not the other way around.” Fortitude’s allegation was therefore a binding judicial admission that established abuse of discretion review. Turning to the requested discovery, the court noted that a district court reviewing for abuse of discretion may consider evidence outside the administrative record “to decide the nature, extent, and effect on the decision-making process of any conflict of interest.” An insurer that both administers a plan and funds its benefits operates under a structural conflict of interest, and the court concluded that the facts supported such a finding as to Aetna regarding four of the plans at issue. (The court noted that discovery may also be ordered where procedural irregularities “have prevented full development of the administrative record.” Fortitude pointed to a “procedural failure” in a letter from Aetna’s Special Investigations Unit, but the court stated that Fortitude “does not elaborate on how the letter’s purported deficiencies show Aetna’s failure to fully develop the administrative record with documents about the claims it actually denied.”) The court thus agreed to permit discovery on “the nature, extent, and effect” of Aetna’s structural conflict on Fortitude’s claim denials, including “[f]acts involving [Aetna]’s processing and investigation of” the claims and “the reasons given for the denial.” But consistent with the limited discovery available under abuse of discretion review, the court confined discovery to information about Fortitude’s own claims, not those of other providers, and only to claims governed by the four plans with a disclosed structural conflict. The court thus approved some of Fortitude’s written discovery requests, and both of its depositions, although the depositions were limited to “claim-adjudication systems, Flags, automation, the May 1 process, and conflict-mitigation measures, which are the only proposed topics that appear to relate to Fortitude’s claims governed by the four plans where Aetna disclosed a structural conflict.”
ERISA Preemption
Seventh Circuit
Cigna Health & Life Ins. Co. v. Laboratory Physicians, LLC, No. 1:24-cv-1947, 2026 WL 3026403 (N.D. Ill. Oct. 8, 2026) (Judge John J. Tharp, Jr.). Cigna Health and Life Insurance Company and Cigna Healthcare, Illinois, Inc. serve as claim administrators for various ERISA-governed health plans, both insured and self-funded. Laboratory Physicians, LLC and Winfield Laboratory Consultants, S.C. (the “Pathology Groups”) provide pathology services in hospitals that are in network with Cigna, but the groups themselves are out of network. When a Cigna plan member treated at an in-network hospital received their services, the member could be balance-billed. However, Section 356z.3a of the Illinois Insurance Code limits what the patient owes in that situation, and requires the insurer and provider to negotiate the bill, and sets up binding arbitration if they cannot agree. Each Pathology Group initiated an arbitration against Cigna; the Laboratory Physicians arbitrator found for Laboratory Physicians, and the Winfield arbitrator found for Cigna. Cigna sued before either arbitration concluded, contending that the arbitrations were preempted by ERISA, and that about 85 percent of the claims at issue involved self-funded plans which were not governed by Illinois insurance law. Count I sought declaratory and equitable relief under ERISA’s enforcement provision, requesting a ruling that would deny future arbitrators jurisdiction over the plans and bar the Pathology Groups from initiating arbitrations that violated ERISA. Count II sought similar relief under the Declaratory Judgment Act. Count III sought to render the Laboratory Physicians award unenforceable under ERISA, and Count IV sought vacatur under the Federal Arbitration Act and the Illinois Uniform Arbitration Act. The Pathology Groups moved to dismiss under Rules 12(b)(1) and 12(b)(6). The court began with jurisdiction. It held that Counts I and II were moot because they sought relief from arbitrations that had concluded. Cigna invoked the exception for disputes “capable of repetition, yet evading review.” The court agreed that the 45-day deadline for an arbitrator’s written decision is relatively short, but Cigna’s claims rested on the premise that the arbitrators exceeded their authority, so applying the exception would require speculating that future arbitrators would misread Section 356z.3a and ERISA in the same way, which was too uncertain. As the court put it, “Cigna cannot request an advisory opinion telling AAA arbitrators how they should interpret the law just because they might make a mistake.” The claims against Winfield were moot for the added reason that Cigna had won and did not contest the award. “Cigna cannot have it both ways: it is not entitled to an opinion limiting the [arbitrator’s] jurisdiction that would leave the current award undisturbed.” As for the remaining counts, the court found federal question jurisdiction because Cigna’s claims arose under ERISA. The Pathology Groups argued that Section 356z.3a “does not provide for judicial review,” and thus the court could not consider the dispute, but the court responded that this “is not correct,” because “Congress, not the states, determines the jurisdictional authority of the federal courts.” Turning to the merits, the court rejected the Pathology Groups’ argument that Cigna’s suit was an impermissible collateral attack on the arbitrators’ jurisdictional rulings. The court noted that Cigna had to show “an egregious jurisdictional error by the arbitrators” in order to overturn the award, and found that high bar met here. Section 356z.3a governs “health insurance issuer[s],” a term the Illinois HIPAA defines to exclude group health plans, which include self-funded ERISA plans, so by its own terms the statute did not reach the self-funded plans. The arbitrators nonetheless applied it to self-funded plans Cigna administered, contradicting both the state statute and ERISA. The court ruled that “[t]o the extent that Section 5/356z.3a creates a process that allows awards that conflict with ERISA to be enforceable, it must be preempted.” The arbitrators’ assertion of jurisdiction over self-funded plans was thus “an improper expansion of the scope of their powers.” Cigna did not contest dismissal of Count IV, as the FAA and the Illinois arbitration act both require a written arbitration agreement and Cigna did not allege one. As a result, the court granted the motion to dismiss as to Counts I, II, and IV and denied it as to Count III, and because Count III was brought only against Laboratory Physicians, it dismissed Winfield as a defendant.
Medical Benefit Claims
Seventh Circuit
Brady K. v. Health Care Service Corp., No. 25 C 759, 2026 WL 3034335 (N.D. Ill. Oct. 9, 2026) (Judge Matthew F. Kennelly). Brady K., individually and on behalf of his minor child A.K., sued Health Care Service Corporation d/b/a Blue Cross Blue Shield of Texas under ERISA § 502(a)(1)(B) and (a)(3) and the Mental Health Parity and Addiction Equity Act. In 2023 and 2024, A.K. was treated at two Utah facilities for issues including autism spectrum disorder, aggression, and ADHD. A.K. was a beneficiary of an insured health plan administered by Blue Cross, which denied preauthorization and coverage on the ground that the facilities lacked 24-hour on-site nursing. On appeal, Brady argued that Blue Cross violated the Parity Act by imposing a 24-hour nursing requirement on residential treatment centers but not on analogous medical or surgical facilities such as skilled nursing and inpatient hospice, and by imposing national accreditation requirements on residential treatment centers for children and adolescents (RTCCAs) that it did not impose on other analogues. In July 2024 Blue Cross upheld its denial and this action followed. Count one alleged breach of fiduciary duty under ERISA “by denying coverage in violation of the plan terms and failing to provide adequate review and explanation for the denials,” and count two alleged a Parity Act violation. In September of last year (as we reported in our October 1, 2025 edition), the court denied Blue Cross’s motion to dismiss for failure to state a claim. Blue Cross then moved to dismiss for lack of subject matter jurisdiction under Rule 12(b)(1), which the court converted in part to a motion for summary judgment. Blue Cross’s motion contended that Brady did not satisfy the redressability and traceability elements of Article III standing. On redressability, Blue Cross argued that the facilities could not qualify as RTCCAs, which require 24-hour on-site nursing, accreditation by one of two national organizations, and state licensure. The third requirement was undisputed, and Brady conceded that the facilities lacked sufficient nursing and offered no evidence that they held national accreditation. However, he contended that because those two requirements violated the Parity Act, he was not required to satisfy them. The court observed that this issue, “pitched by Blue Cross as a standing issue, rather obviously overlaps with the merits.” The court ruled that because Brady plausibly alleged that both requirements violated the Parity Act, including by asserting that Blue Cross imposed accreditation requirements on residential treatment for children and adolescents “but did not impose them on other analogues,” his allegations were good enough to establish redressability. As for traceability, Blue Cross first argued that Brady’s out-of-network costs were not traceable to its alleged network adequacy violation because it was not required to maintain a network in Utah. The court held that Blue Cross was an ERISA fiduciary with respect to out-of-state care because it processed claims, handled initial appeals, and made benefit determinations, and the plan gave Blue Cross “sole and absolute discretion” to negotiate payment with an out-of-area provider on “an exception basis.” As a result, Blue Cross “cannot contract to provide services and covered care outside of its Texas service area, exercise ‘absolute’ discretion on allowing case-by-case benefits exceptions for healthcare services outside of a Host Blue’s network, and expect not to be a fiduciary regarding those discretionary decisions.” The only record evidence on network adequacy was that one covered RTCCA facility was within 140 miles of Brady’s residence, from which a jury could find the network inadequate. Blue Cross’s second traceability argument was that Brady failed to obtain prior authorization or search for in-network facilities. The court explained that Article III requires no proximate causation, only a “‘meaningful connection’ between a defendant’s conduct and the plaintiff’s injury.” Even if prior authorization could have yielded in-network coverage, the allegedly inadequate network made that outcome “very unlikely, at least as shown on the present record.” Thus, Brady was able to establish traceability as well, and Blue Cross’ motion was denied. Finally, the court addressed several loose ends. It (1) did not reach Blue Cross’s challenge to a request for an accounting of other participants’ funds because Brady clarified that he sought no relief for anyone but himself and A.K, (2) declined to consider Brady’s alternative standing arguments, and (3) mooted Brady’s argument for discovery under Rule 56(d).
Pension Benefit Claims
Ninth Circuit
Trevillyan v. Western States Carpenters Pension Trust, No. CV 25-9043 PA (AJRx), 2026 WL 3012459 (C.D. Cal. Oct. 5, 2026) (Judge Percy Anderson). M. Jeanine Trevillyan, proceeding pro se, was a member of the United Brotherhood of Carpenters and Joiners from April 1977 until she voluntarily withdrew in May 1990. She alleged that she became eligible for the union’s multiemployer pension plan in March 1979, but that the plan never notified her of her enrollment or sent her summary plan descriptions or benefit statements. When she sought a withdrawal card in 1990, a union business agent told her she had “enough to get a pension,” but a printout showed a shortfall from one employer, C.F. Braun, whose 1980-81 hours had been reported at a third-period apprentice level that carried no pension credit. The plan acknowledged in 1991 that the coding did not match her apprentice record but explained that “[s]ince almost 10 years have elapsed” since the hours were submitted, it could not bill the employer for “these missing benefits.” After Trevillyan called about her pension in May 2023, a September 2023 letter credited the C.F. Braun hours toward vesting but concluded that she still had not met the vesting requirements. The plan denied her October 2023 application in January 2024, finding that she had insufficient credits and noting nine consecutive one-year breaks in service from 1987 through 1996, which cancelled her credits in any event. The plan then denied her appeal, and this action followed. In July of this year the court granted in part the trust’s Rule 12(c) motion, finding that Trevillyan had adequately pleaded a § 1132(c)(1) statutory penalties claim based on the trust’s delay in responding to a February 2024 document request. It granted leave to amend. (We covered this ruling in our August 5, 2026 edition.) Trevillyan’s second amended complaint asserted claims for benefits under § 1132(a)(1)(B), statutory penalties, and breach of fiduciary duty and prohibited transactions under §§ 1104, 1132(a)(2), and 1132(a)(3). The trust moved to dismiss the benefits and fiduciary claims and to strike Trevillyan accompanying declarations. In this order, the court began by declining to consider claims beyond the scope of its prior leave to amend, including a new health and welfare plan claim, and dismissed with prejudice a § 1140 interference claim that the amended pleading no longer mentioned. On Trevillyan’s benefits claim, she argued that because she worked past January 1, 1989, with five prior years of service, she was fully vested under the Tax Reform Act of 1986. The court disagreed. The TRA imposed five-year vesting on most plans but retained a ten-year requirement for employees covered by collective bargaining agreements, and multiemployer plans were not required to adopt five-year vesting until the Small Business Job Protection Act of 1996. The court’s prior order had also found that Trevillyan’s 1990 withdrawal was a permanent break in service that cancelled her unvested credits, and furthermore, her own allegations did not give her sufficient vesting service credits even counting the misclassified 1980-81 C.F. Braun hours. Because “the allegation of other facts consistent with the challenged pleading could not possibly cure the deficiency,” the court dismissed the benefits claim without leave to amend. On the breach of fiduciary duty claim, Trevillyan alleged that the plan failed to attribute remittances to the proper accounts or audit the apprentice-level coding, which she characterized as a prohibited transaction, and failed to enroll her or provide required documents. The court found that the alleged misclassification occurred in 1980-81 and the alleged failure to furnish documents occurred in roughly 1979-90, decades before Trevillyan filed suit, so the claims were untimely under § 1113(1). Trevillyan argued that “[t]he concept of Pension Plans was completely outside the scope of Plaintiff’s cognition,” but the court found that this conflicted with her own allegation that she had been told she had enough hours for a pension, and in any event, the limitations period “is triggered by the [party’s] knowledge of the transaction that constituted the alleged violation, not by their knowledge of the law.” The court also rejected Trevillyan’s fraudulent concealment theory, because the 1991 letter “did not hide any information” but explained the misclassification. Nor did her complaint explain that it discouraged her from acting, since she inquired about her pension and applied for benefits in 2023 and the plan eventually credited the hours. At most, the conduct resembled “bureaucratic inefficiency” that “does not on its own rise to the level of affirmative concealment.” The court thus granted the trust’s motion to dismiss. It denied the trust’s motion to strike because Trevillyan’s declarations did not change its analysis. Meanwhile, Trevillyan’s statutory penalties claim from her 2024 request is still alive.
Pleading Issues & Procedure
Ninth Circuit
Phillips v. Cobham Advanced Electronic Solutions, Inc., No. 23-cv-03785-EKL, __ F. Supp. 3d __, 2026 WL 2997716 (N.D. Cal. Sept. 30, 2026) (Judge Eumi K. Lee). Michael Phillips, Brenda Paclik, and Crystal Franklin were participants in a 401(k) retirement plan sponsored by defense and aerospace company Cobham Advanced Electronic Solutions, Inc. In a 2022 letter their counsel requested plan documents under ERISA § 104(b)(4), including “investment policy statements…under which the Plan was established or operated.” Defendants responded and produced some documents, but did not include an IPS. The parties exchanged follow-up correspondence, but defendants never produced one and neither confirmed nor denied that one existed. Plaintiffs filed suit in 2023, and the procedural history that followed was, in the court’s words, “extensive and unusual.” The first three complaints asserted a breach of fiduciary duty claim and a derivative failure to monitor claim, premised on a theory that the plan’s funds were imprudently selected and retained because they underperformed other investments. Another judge (Edward J. Davila) dismissed those allegations on the ground that poor performance alone could not establish imprudence. (Your ERISA Watch covered this ruling in our July 10, 2024 edition.) After the case was reassigned to Judge Lee, the third amended complaint was dismissed with leave to amend because plaintiffs had not compared the funds to meaningful benchmarks. (The court relied on the Ninth Circuit’s decision in Anderson v. Intel Corp. Inv. Policy Comm. for this ruling, which, if last week’s oral argument at the Supreme Court is any indication, looks like it will be affirmed.) The fourth amended complaint, filed in April 2025, repleaded the fiduciary claims and, for the first time, added a § 104(b)(4) claim based on the failure to furnish the IPS. In September 2025, the court dismissed the prudence and failure to monitor claims with prejudice, but denied dismissal of the § 104(b)(4) claim, finding it plausible that defendants had to furnish the IPS. (We covered this decision in our October 1, 2025 edition.) The parties then agreed that the remaining claim presented “a purely legal question,” stipulated that no discovery was necessary, and filed cross-motions for summary judgment. In their motion, defendants argued that plaintiffs lacked Article III standing, which the court agreed was a threshold question. The court examined three possible theories of injury identified or implied by plaintiffs, and found that none passed muster. The first theory was that nondisclosure of the IPS was itself a concrete injury. The court rejected this, ruling that it was “a bare procedural violation, divorced from any concrete harm.” Recasting the violation as an “informational injury” did not help, because plaintiffs “have identified no downstream consequences from failing to receive the required information.” Plaintiffs’ second theory, that the missing IPS prevented informed investment decisions and thereby interfered with their entitlement to benefits, was “legally cognizable” but “devoid of factual or evidentiary support.” It was undisputed that Phillips and Franklin withdrew their entire balances in 2020, long before the 2022 document request, so the IPS would have been of no use to them. Paclik remained invested for about a year after the request, but plaintiffs submitted no declaration or other evidence that she lacked knowledge about her investment options or would have made different decisions with more information. Meanwhile, plaintiffs “received substantial and detailed information about the Plan’s investment options,” including annual disclosures describing the relevant funds’ objectives, strategies, risks, and returns, along with quarterly statements detailing returns and fees. An IPS, by contrast, “reveals only the general criteria used to select, evaluate, and monitor investment options.” The third theory was that the missing IPS prevented plaintiffs from stating a viable fiduciary breach claim. The court assumed that dismissal of the other claims was a cognizable injury but held that it was not “fairly traceable” to defendants’ conduct. The prudence claim failed because it rested on the premise that fiduciaries must maximize returns and may be liable for choosing less volatile investments, not because the IPS was missing. The complaint’s own allegations that the funds frequently outperformed the median also precluded any inference of damages, an independent ground for dismissal that production of the IPS would not have saved. Because plaintiffs lacked standing, the court lacked jurisdiction, and thus the court granted defendants’ motion for summary judgment and denied plaintiffs’ cross-motion.
Recent Comments