Goodwin Insights December 16, 2021

Trends in ERISA Litigation Concerning Retirement Plans

Key Takeaway: Although fewer new cases were filed in 2021 than 2020, plaintiffs in ERISA cases have continued to experience success and we expect that, barring changes in the law or a favorable opinion for the defense in the Northwestern case or others, ERISA litigation will continue to be a hot area of the law into 2022 and beyond.

2021 was another very active year in ERISA litigation, particularly in cases concerning retirement plans. Although the number of new ERISA cases filed in 2021 concerning retirement plans did not match 2020’s record of over 100 new cases, over 40 were still filed in 2021, approximately ten more than were filed in 2019. The decline in new cases filed in 2021 as compared to 2020 may be simply due to the fact that plaintiffs’ firms are busy with the cases filed last year, most of which are still working their way through the courts. Trends, including the following, indicate that this new normal of increased ERISA litigation may continue:

  • New plaintiffs’ firms have entered the space: Particularly in 2020, but also in 2021, we have seen plaintiffs’ firms that have not historically been active in ERISA cases file lawsuits. Some of these firms have filed many lawsuits; one firm alone filed over 40 ERISA cases in the past three years. 
  • Lawsuits have been brought against sponsors and fiduciaries of smaller retirement plans: In earlier waves of ERISA litigation, lawsuits mainly concerned very large, multi-billion dollar plans. Plaintiffs’ firms then began to sue regarding plans with several hundred million dollars of assets. Now, even companies with plans under $100 million in assets have been sued.
  • Most cases have survived motions to dismiss: Many courts have been reluctant to grant motions to dismiss, although as plaintiffs target plans that have different characteristics, that might change. In cases filed since 2019, courts have denied dismissal in part or in whole in nearly three-quarters of contested motions to dismiss. One notable outlier has been in California district courts, where four out of nine such motions were granted. Goodwin profiled two of these decisions in an earlier edition of the ERISA Litigation Update, available here.
  • Classes have been certified in most cases: To date, courts also have been reluctant to deny class certification in many ERISA fee cases. Indeed, some defendants now stipulate to class certification rather than oppose the motion to certify a class. Defendants have fared best in cases where plaintiffs seek to certify classes consisting of many plans or participants in many plans. For example, a Goodwin client recently prevailed in opposing class certification in such a case. More information on that favorable decision is available here. 
  • Settlements have continued: And, ultimately, many cases have still ended in settlements. Several eight-figure settlements were approved in 2021. Generally, 2021 settlement amounts were similar to those in prior years, after taking into account the size of the plans at-issue.

New ERISA Cases Brought Regarding Retirement Plans (2019 – 2021 YTD)