Fiduciary Duty Lawsuit News: Cunningham, ERISA, and DOL Shifts

Fiduciary duty lawsuit news in 2025 and 2026 has been dominated by a Supreme Court ruling that made ERISA cases easier to file, a second ERISA question the Court has agreed to hear on how underperformance claims must be pleaded, the collapse of the Department of Labor’s expanded fiduciary rule, and a fresh wave of class actions pushing into voluntary insurance benefits, pharmacy benefit managers, and pension risk transfers. Plaintiffs’ firms filed 155 ERISA fiduciary class actions in 2025 alone, and new theories keep arriving.¹

Cunningham v. Cornell Lowered the Bar for ERISA Plaintiffs

On April 17, 2025, a unanimous Supreme Court decided Cunningham v. Cornell University, changing how prohibited-transaction claims under ERISA Section 1106(a)(1)(C) get pleaded. Justice Sotomayor’s opinion held that a plaintiff needs to allege only three things: that a plan fiduciary caused the plan to enter a transaction, that the fiduciary knew or should have known it involved goods, services, or facilities, and that the transaction was with a party in interest.²

What plaintiffs no longer have to do is the point. Some circuits had required plaintiffs to allege that a challenged transaction failed to qualify for any of the numerous statutory exemptions under Section 1108. The Court called that burden “impractical,” noting there are 21 statutory exemptions and hundreds of regulatory ones, and held the exemptions are affirmative defenses the defendant must raise and prove.³ The opinion also reminded district courts they still have tools to dispose of weak cases early, including limits on discovery, sanctions, and standing dismissals.⁴

The Supreme Court Will Decide What Counts as a Meaningful Benchmark

A circuit split has developed over what plaintiffs must allege when they claim a retirement plan’s investments underperformed. In January 2026, the Supreme Court agreed to hear Anderson v. Intel Corp. Investment Policy Committee to resolve it.⁵

The Ninth Circuit ruled in Intel’s favor, holding that plaintiffs must identify a comparable fund with similar risk, strategy, and objectives — a “meaningful benchmark.” A split Sixth Circuit panel took the opposite view in Parker-Hannifin Corp. v. Johnson, concluding that comparing a plan’s target-date funds to an S&P target-date index was enough at the pleading stage.⁶ The Solicitor General urged the Court to grant review in Parker-Hannifin, arguing the Sixth Circuit’s standard was too lenient.⁷ Oral argument in Anderson v. Intel has been deferred to the 2026–27 term, with merits briefing still in progress.

The DOL’s Expanded Fiduciary Rule Is Gone

The Department of Labor’s 2024 “Retirement Security Rule,” which would have broadened who counts as a fiduciary under ERISA, is now off the books. Two federal courts in Texas blocked the rule before it took effect, and on March 18, 2026, the DOL formally removed it from the Code of Federal Regulations, with the removal effective April 20, 2026.⁸

The rule would have replaced the long-running “five-part test” with a broader standard that captured one-time recommendations like rollover advice. A Texas district court found in March 2026 that the rule improperly eliminated key elements of the existing test, treated ordinary sales compensation as advice fees, and overstepped the DOL’s authority by imposing ERISA Title I duties on IRA service providers.⁹ The DOL declined to defend the rule.

With the vacatur, the five-part test governs again: a financial professional is a fiduciary only when the advice concerns specific investments, is compensated directly or indirectly, addresses the plan’s particular needs, serves as a primary basis for decisions, and is delivered on a regular basis.¹⁰ Assistant Secretary Daniel Aronowitz said the vacated rule “wrongly sought to impose ERISA fiduciary status on securities brokers and insurance agents when there was not a relationship of trust and confidence.”¹¹ The DOL has said it has no current plans to propose a replacement.

Where the New Class Actions Are Landing

Retirement plan litigation has kept up a punishing pace. Over 600 excessive-fee and imprudent-investment cases have been filed in the last decade, and 2025’s 155 ERISA fiduciary class actions came close to a record. New excessive-fee filings alone rose from 47 in 2024 to a projected 60-plus in 2025.¹²

The theories driving new suits have shifted. Stable value funds — conservative options common in 401(k) menus — became the primary target in 2025, with challenges up 500% year over year. Plaintiffs allege these funds returned less than comparable fixed-income alternatives. Recordkeeping fees remain a staple. Target-date fund challenges, once the most common theory, have declined.¹²

Settlements have been substantial but are trending smaller. Since 2023, more than 120 class settlements have totaled over $665 million, though the median settlement fell from $3 million in 2023 to about $1.6 million in 2025. Outliers still land: Snyder v. UnitedHealth Group settled for $69 million, and General Electric’s ERISA class action resolved for $61 million.¹³ The largest plans absorb almost all of the risk. Plans with $250 million or more in assets make up less than 3% of all defined contribution plans but account for nearly every lawsuit.¹

Forfeiture Cases Keep Getting Dismissed

A newer theory targets how employers use forfeited 401(k) funds left behind by employees who leave before vesting. When companies apply forfeitures to reduce their own contribution obligations rather than participants’ administrative costs, plaintiffs call it a breach. Nearly 80 such cases have been filed since September 2023, with 43 in 2025 alone.¹² Plan sponsors are winning. More than 80% of written opinions have favored defendants, and appeals are pending in the Third, Eighth, and Ninth Circuits.¹⁴ The DOL has filed amicus briefs backing plan sponsors, taking the position that using forfeitures to offset employer contributions is permissible.

Stifel Financial’s $134 Million Suit

In February 2026, plaintiff Amber Striplin filed a class action in the Eastern District of Missouri alleging that Stifel Financial breached its fiduciary duties by failing to remove two underperforming pooled investment accounts — one managed by American Century, one by Artisan — from its 401(k) plan. The complaint alleges losses between $42 million and $134 million to participants since March 2020.¹³

Voluntary Benefits Are the New Frontier

On December 23, 2025, plaintiffs’ firm Schlichter Bogard filed four class actions attacking a category of employee benefits that had largely escaped ERISA scrutiny: voluntary insurance plans like accident, critical illness, and hospital indemnity coverage. The named defendants pair major employers with their benefits brokers:

Community Health Systems and Gallagher
Labcorp and Willis Towers Watson
United Airlines and Mercer
Allied Universal with Mercer and Lockton

Three suits were filed in the Northern District of Illinois and one in the Southern District of New York.¹⁵

The theory is novel. Voluntary benefits are typically employee-paid and often exempt from ERISA under a safe harbor requiring, among other conditions, that the employer not “endorse” the program. The plaintiffs argue these employers crossed that line through actions like filing Form 5500 reports and maintaining service relationships with carriers, which would bring the plans under ERISA’s full fiduciary regime. In at least one case, plaintiffs allege $33 million in excess broker commissions.¹⁶ The suits seek personal liability against plan fiduciaries, disgorgement of broker profits, and removal of the named fiduciaries.¹⁷

Pharmacy Benefits and Health Plan Cases

Employers are increasingly being sued over prescription drug benefits, with plaintiffs alleging that plan fiduciaries failed to police pharmacy benefit managers whose opaque fee structures inflated employee costs.

Lewandowski v. Johnson & Johnson

The signature PBM case, Lewandowski v. Johnson & Johnson, alleged that J&J and its Pension and Benefits Committee mismanaged PBM contracts, failed to negotiate lower drug prices, and paid substantially more for generic drugs than uninsured consumers could pay at retail pharmacies.¹⁸ The plaintiff also alleged J&J failed to produce requested plan documents.¹⁹

The case has been dismissed twice for lack of standing, first in January 2025 and again on November 26, 2025, in the District of New Jersey. The court found the connection between PBM fees and higher participant costs “speculative and not redressable,” noting J&J’s sole discretion over setting employee contribution rates.²⁰ The plaintiffs declined to amend a third time and filed a notice of appeal on January 16, 2026.²¹ Whether the appeal succeeds could determine whether PBM-related fiduciary claims gain broader traction.

California SB 41 Faces an ERISA Preemption Challenge

On January 2, 2026, the Pharmaceutical Care Management Association filed suit in the Central District of California challenging Senate Bill 41, which imposed fiduciary duties on PBMs servicing self-insured employer plans. The law, effective January 1, 2026, requires PBMs to act in clients’ best interests, avoid conflicts, and exercise care and diligence. The industry argues ERISA preempts these requirements.²² As of mid-2026, the California Attorney General had not yet responded, and no preliminary injunction ruling had issued.²³

Ghost Networks: Hecht v. Cigna

A different angle on health plan fiduciary duty surfaced in Hecht v. The Cigna Group, filed in the Northern District of Illinois. “Ghost networks” refer to provider directories listing doctors who aren’t actually accepting patients, leaving enrollees to unknowingly receive out-of-network care. In February 2025, Judge Manish Shah ruled that allegations of “systemic and repeated failures to maintain accurate directories” plausibly stated a breach of the duties of loyalty and prudence under ERISA.²⁴ The parties announced a $5.7 million class-wide settlement in October 2025 that includes injunctive measures requiring Cigna to strengthen directory verification. A court granted preliminary approval in November 2025.

Pension Risk Transfers: Konya v. Lockheed Martin

Pension risk transfer litigation targets employers who shift pension obligations to an insurance company. Most such suits have been dismissed because courts find the retirees haven’t yet suffered any actual injury — the insurer is still paying benefits. Konya v. Lockheed Martin is the exception that has cleared that hurdle so far.

The case involves two 2021–2022 transactions totaling roughly $9.2 billion, in which Lockheed transferred pension assets covering more than 31,000 retirees to Athene Annuity.²⁵ In March 2025, Judge Brendan Hurson of the District of Maryland denied Lockheed’s motion to dismiss, finding the plaintiffs had “eked out sufficient injury-in-fact to establish standing.”²⁶ Lockheed obtained certification for an immediate interlocutory appeal, and the case is now before the Fourth Circuit, with district proceedings stayed.

In January 2026, the DOL filed an amicus brief backing Lockheed, arguing that plaintiffs lacked standing because they hadn’t shown a “certainly impending” risk of monetary harm and that federal interpretive guidance on pension risk transfers requires a prudent process, not the selection of a single “safest” annuity.²⁷ The Fourth Circuit’s ruling could set precedent for 13 similar PRT lawsuits filed since 2024.²⁸

The DOL Is Now Defending Plan Sponsors

Across several of these matters, the Department of Labor’s posture has shifted. The department has filed amicus briefs supporting defendants in forfeiture cases, the Lockheed pension transfer appeal, and the Pizarro v. Home Depot petition, where it argued that ERISA does not create a special burden-shifting framework requiring defendants to disprove that a breach caused losses.²⁹ The plaintiffs withdrew that petition in January 2026.³⁰ In the pension risk transfer context, the DOL warned that “vexatious litigation” could discourage employers from offering pension plans altogether.²⁸

A Delaware Ruling Ties Fiduciary Duty to Workplace Misconduct

Fiduciary duty litigation extends beyond benefit plans. In January 2026, the Delaware Court of Chancery issued a significant ruling in Los Angeles City Employees’ Retirement System v. Glenn Sanford, a derivative suit against directors and officers of eXp World Holdings. Chancellor Kathleen McCormick denied motions to dismiss claims that the company’s leadership breached fiduciary duties by failing to oversee and respond to workplace sexual misconduct. The court held that directors’ failure to act on credible “red flags” about sexual assault could constitute the bad faith required for oversight liability under the Caremark doctrine, and that allegations of the CEO actively concealing misconduct to protect personal financial interests were not shielded by the company’s exculpatory charter provisions.³¹

SEC Enforcement Against Investment Advisers

Outside ERISA, the Securities and Exchange Commission continues to enforce fiduciary standards against investment advisers, though under a narrower philosophy since Chairman Paul Atkins took over. The SEC has listed “breaches of fiduciary duty by investment advisers” as a priority within a “back-to-basics” approach that favors genuine fraud cases over novel legal theories.³²

Fiscal year 2025 brought a jury verdict against Cutter Financial Group for failing to disclose financial incentives when recommending insurance products to advisory clients, and charges against Vanguard Advisers for inadequately disclosing conflicts of interest related to its fee-based advisory service.³² In January 2026, the SEC brought an enforcement action against Familywealth Asset Management over hedge clauses in advisory agreements — contractual provisions that limit an adviser’s liability — which the agency considers generally inconsistent with its antifraud rules.³³

1
Encore Fiduciary. ERISA Fiduciary Litigation in 2025
2
Supreme Court of the United States. Cunningham v. Cornell University, No. 23-1007
3
Oyez. Cunningham v. Cornell University
4
Cornell Law Institute. Cunningham v. Cornell University, No. 23-1007
5
Baker Botts. U.S. Supreme Court Poised to Address ERISA Pleading Standards for Underperformance Claims
6
Supreme Court of the United States. Parker-Hannifin Corp. v. Johnson, No. 24-1030, Brief for the United States as Amicus Curiae
7
Mayer Brown. U.S. Solicitor General Supports Plan Sponsors on Key ERISA Legal Questions
8
U.S. Department of Labor. DOL Vacates Fiduciary Investment Advice Rule
9
October Three. Texas District Court Vacates DOL Fiduciary Rule
10
International Foundation of Employee Benefit Plans. DOL Vacates Fiduciary Investment Advice Rule
11
Thomson Reuters Tax & Accounting. DOL Removes 2024 Investment Advice Fiduciary Regulations to Implement Court Rulings
12
Mayer Brown. The Evolution of Defined Contribution Plan Class Action Litigation in 2025
13
NAPA Net. Advisory Firm Slapped With $134 Million 401(k) Fiduciary Breach Suit
14
Mayer Brown. Key Issues to Watch in ERISA Defined Contribution Plan Class Action Litigation in 2026
15
Ropes & Gray. Voluntary Benefits Under Scrutiny
16
DLA Piper. Voluntary Benefit Plans Face Increased ERISA Fiduciary Scrutiny
17
Kutak Rock. New Year, New Worries
18
Becker’s Payer Issues. Judge Dismisses Lawsuit Accusing J&J of Mismanaging Employee Drug Benefits
19
Georgetown Law Litigation Tracker. Lewandowski v. Johnson and Johnson
20
Trucker Huss. Johnson & Johnson Beats Back Again Class Action Alleging Breaches of Fiduciary Duty
21
ERISA Litigation Blog. Lewandowski v. Johnson and Johnson: Another PBM Fee Case Falls on Standing
22
Bloomberg Law. Pharmacy Benefit Managers Fight California Over Fiduciary Role
23
Trucker Huss. PBM Fiduciary Provisions of New California Law Challenged
24
American Bar Association. Ghost Networks and ERISA Fiduciary Duty
25
CaseMine. Konya v. Lockheed Martin Corporation
26
GovInfo. Konya v. Lockheed Martin Corp., Civ. No. 24-750-BAH
27
U.S. Department of Labor. DOL Amicus Brief, Konya v. Lockheed Martin
28
NAPA Net. DOL Backs Plan Fiduciaries in PRT Suit
29
U.S. Department of Labor. DOL Press Release, Pizarro v. Home Depot
30
SCOTUSblog. Pizarro v. The Home Depot, Inc.
31
Akin Gump. Delaware Court of Chancery Rules Workplace Sexual Misconduct Oversight Failures Can Support Breach of Fiduciary Duty Claims
32
U.S. Securities and Exchange Commission. SEC Announces Results for Fiscal Year 2025 Enforcement
33
Alston & Bird. SEC Order on Investment Advisory Hedge Clauses