August 9, 2024
The Eleventh Circuit’s recent ruling backing Home Depot’s defeat of a suit from workers who showed their 401(k) plan was mismanaged, but couldn’t tie those lapses to financial losses, adds to a growing circuit split that attorneys say warrants guidance from the U.S. Supreme Court.
A three-judge panel’s decision Aug. 2 affirmed the home improvement retailer’s summary judgment win in Georgia federal court in plan participants’ suit alleging that excessive fees and subpar investments in their retirement plan violated the Employee Retirement Income Security Act.
The decision adds to a split between circuit courts on the question of which party must prove loss causation to prevail on ERISA claims of retirement plan mismanagement. The Eleventh Circuit joined the Tenth Circuit in specifically rejecting retirees’ theory that the burden of proving loss causation should shift to the employer if plaintiffs can show a fiduciary breach and that the plan suffered a loss.
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Many plaintiff-side attorneys said they disagreed with the decision, including Kai Richter, of counsel at Cohen Milstein Sellers & Toll PLLC.
“Why should a breaching fiduciary get the benefit of the doubt?” Richter said. “It’s not equitable, it’s not consistent with trust law, it’s not consistent with the Department of Labor’s view as an industry expert and it’s not consistent with the opinions that have been reached in many circuits, including the First Circuit in the Putnam case that I litigated.”
Read Home Depot’s ERISA Win At 11th Circ. Deepens Circuit Split.