ERISA Class Action Review – 2025

where the defendants successfully asserted a challenge based on lack of standing. In that case, the plaintiffs were participants in self-funded, employer-sponsored health benefits plans administered by the defendant United. Id. at 811. The plaintiffs claimed that United breached its duty of loyalty when it did not pay their providers in full, but instead offset the amount due based on sums United claimed those providers had previously been overpa Id. Id. The district court concluded that the plaintiffs lacked standing and dismissed their claim. Id. On appeal, the Eighth Circuit affirmed the district court’s ruling. Id. The Eighth Circuit emphasized that even if the defendant’s arrangement violated the statutory requirements of the ERISA, the plaintiffs still had to demonstrate concrete injury in order to have standing. Id. at 813. The Eighth Circuit also clarified that the fiduciary duties created by the ERISA are owed to the plan itself, which means plan participants lack a legal or equitable ownership in plan assets. Id. Additionally, there was no breach of contract in this case because the plans specifically gave United the discretion to implement this type of cross-plan offsetting. Id. This decision indicates that, in the context of health benefits plans, participants may not have legal or equitable rights in the plan’s assets, and therefore may lack standing to challenge an administrator’s discretion in paying healthcare providers. In Savage, et al. v. Sutherland Global Services, 2024 U.S. Dist. LEXIS 154852 (W.D.N.Y. Aug. 28, 2024), the court considered challenges to both Article III and class standing. There, the challenge to standing was raised at the class certification stage, rather than the motion to dismiss stage. Savage had a rather complicated history. In their initial complaint, the plaintiffs alleged that defendants had breached their fiduciary duties by selecting expensive retail shares that required the plan to pay a fee when identical institutional shares that had no fee were available. Id. at *13. During the course of the litigation, the plaintiffs’ theory of injury changed, and they came to believe that the real harm that they suffered consisted of their plan having paid excessive compensation to recordkeepers. Id. Although their original complaint was devoid of relevant facts regarding this claim, the plaintiffs argued in a reply brief that they had suffered an injury in fact because their plan had paid a $50 fee for account distributions and withdrawals, a fee that participants in a comparator plan did not have to pay. Id. at *15. The court first addressed Article III standing. The court noted that the plaintiffs’ overall claims regarding the $50 fee were highly speculative and only weakly supported. “It is not even clear,” the court noted, “that all the named plaintiffs paid such a fee.” Id. at *16. Even if they had, there was little evidence in the record to suggest that the fee was unreasonable. Id. at *17. Nonetheless, the court deemed the allegations sufficient to provide standing because at least one named plaintiff had plausibly alleged a concrete injury. Id. at *17 (citing Hyland, et al. v. Navient Corp , 48 F.4th110, 117 (2d Cir. 2022) (“[Article III] standing is satisfied so long as at least one named plaintiff can demonstrate the requisite injury.”). While the court held that the plaintiffs had standing to sue over past injuries, it also held that Article III standing was lacking to the extent that their suit sought prospective relief ( i.e ., a declaratory judgment) because none of the named plaintiffs were still enrolled in the plan and standing to seek prospective relief requires a plaintiff to demonstrate the likelihood of future injury. Id. at *18. But while the court held that the requirements for Article III standing had been met, it reached a different conclusion with respect to the question of class standing. In the Second Circuit, the class standing inquiry focuses not on whether the named plaintiff has sufficiently alleged an injury, but rather on whether he or she is able to represent the absent members of the putative class. Id. at *19 (citing NECA-IBEW Health & Welfare Fund v. Goldman Sachs & Co. , 693 F.3d 145, 158 n.9 (2d Cir. 2012)). In Savage , it was not clear that all of the members of the putative class had paid the same $50 fee. The court opined that class standing was not appropriate because the “alleged injuries [had] the potential to be very different – and could turn on very different proof.” Id. at *20 (quoting NECA-IBEW , 693 F.3d at 163). Accordingly, the court denied class certification. Id. at *26-27. These rulings indicate that challenges to standing remain an important weapon in the defense bar’s tactical arsenal, but that success in these challenges is by no means guaranteed. 4. Cases Challenging The Denial Of Health Benefits While most ERISA class actions center on allegations that defendants have violated their fiduciary duties with respect to 401(k) plan management, a substantial number concern the denial of healthcare benefits. In 2024, there were several significant decisions in this space.

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