ERISA Class Action Review – 2025

barred to proceed. Id. In Hensiek, et al. v. Board Of Directors Of Casino Queen Holding Co. Inc. , 2024 U.S. Dist. LEXIS 32714 (S.D. Ill. Feb. 26, 2024), the court considered the intersection of the ERISA’s time-bars and Rule 23’s standards for class certification. There, the plaintiffs, who were current and former employees of Casino Queen Hotel and Casino, brought an action against the fiduciaries and selling shareholders of their company’s employee stock ownership plan, alleging that a 2012 stock purchase transaction and a 2013 asset constituted a breach of defendants’ fiduciary duties under the ERISA. Id. at *4-6. The court denied the plaintiffs’ motion for class certification. Id. at *30. The court’s analysis was focused on how the plaintiffs failed to satisfy the Rule 23(a) prerequisite of commonality. Id. at *18. The plaintiffs filed their original complaint in 2020, more than six years after the alleged unlawful transactions. Id. at *21. Therefore, their claims would be time-barred unless they could invoke the fraud or concealment exception. Id. The court noted that in this case, the plaintiffs’ fraudulent concealment argument was not based on a single uniform fraudulent statement or action. Id. at *23. Rather, the alleged fraud and concealment efforts were made by various defendants in various forms and at different times. Id. at *22. Furthermore, the plaintiffs were impacted by these concealments in different ways. Id. The court therefore found that it was necessary to conduct an individual inquiry into each purported class member’s knowledge of fraud or concealment. Id. at *25. This rendered commonality impossible because this inquiry could result in an array of possible answers for different plaintiffs. Id. at *25, *27. Finally, in Seidner, et al. v. Kimberly-Clark Corp., Case No. 21-CV-867 (N.D. Tex. Jan. 31, 2024), the court issued an opinion that should serve as a reminder to the plaintiffs’ bar about the importance of observing deadlines. There, the plaintiffs were participants in and beneficiaries of Kimberly Clark’s 401(k) and Profit Sharing Plan. They filed a class action against the company, its Board of Directors, its Benefits Administration Committee, and unidentified individual John Does 1-30 for alleged breaches of fiduciary duty in administering the plan. The plaintiffs alleged that plan administrators’ breaches of the duty of prudence and their failure to monitor other fiduciaries led to millions of dollars of monetary losses in the form of unreasonable and unnecessary recordkeeping fees. The court denied the parties’ proposed schedule for litigating the issue of class certification because the plaintiffs had missed the deadline for seeking certification by several months. Id. at 3. The court noted that class certification motions are due within 90 days of a complaint being filed, and that the plaintiffs failed to file a motion for class certification or a motion for an extension. Id. at 4. The court therefore struck the class allegations from the complaint and denied the motion for a proposed scheduling order on the issue of class certification. Id. at 5. 6. Rulings On The Enforceability Of Mandatory Arbitration And Class Action Waiver Provisions Despite the increasingly successful reliance on arbitration and class action waiver provisions to defeat class litigation elsewhere in the law, federal courts have consistently refused to enforce them in the ERISA context. This tendency has a major impact on the viability of lawsuits in this area. In many cases, individual harms in ERISA cases are limited to thousands or even hundreds of dollars. These cases are often only profitable when thousands of individual claims are aggregated. Accordingly, the resolution of the question of whether a mandatory arbitration provision with a class action waiver is enforceable determines whether that case ultimately will go forward. Most motions to compel arbitration in ERISA class actions were denied in 2024, as courts held that such provisions were unenforceable under the effective vindication exception to the Federal Arbitration Act. The effective vindication doctrine holds that a mandatory arbitration or class action waiver provision that prevents the effective vindication of federal statutory rights is unenforceable. Because plaintiffs in ERISA class action suits generally seek relief on behalf of the plan at issue, most courts found that the statutory right to such relief would be impermissibly abridged by the enforcement of arbitration agreements and class action waivers. For example, in Cedeno, et al. v. Sasson , 100 F.4th 386 (2d Cir. 2024), the Second Circuit affirmed the district court’s denial of the defendant’s motion to compel arbitration. Id. at 390. The Second Circuit emphasized that statutory remedies available under § 502(a)(2) of the ERISA run only to the plan as a whole and provide only indirect benefits to individual plan participants. Id. at 397, 404. The Second Circuit found nothing in U.S.

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