There was lots of fun stuff out there this past week in podcasts, newspapers, professional journals and blogs. There were so many interesting publications and stories that I could have written ten favorites this week, but then the alliteration would be lacking in the post’s title.

So here are five stories that caught my eye this past week. If you really wanted ten, don’t worry, there will be five more next Friday, as Five Favorites for Friday is a weekly feature.

  1. Will American millennials riot in the streets a few years from now if, possibly when, social security benefits are cut as a result of demographic changes? Probably not, but they might if they were French. The Wall Street Journal explains the extent to which current protests in France are a product of a struggling public pension system.
  2. I wrote a post a little while back about my frustration in the past with courts not enforcing spoliation against parties who hid behind the tech involved, and my view that in the face of AI, courts are now increasingly unwilling to accept the “tech eat my homework” excuse for evidence having gone missing. I have long been interested in the evidence, civil procedure and trial rules related to the handling and admissibility of documents, but most discussions of these issues are written by lawyers for other lawyers. I really liked this article by North Carolina trial lawyer Jim White on these topics precisely because it is written to be read by any intelligent layperson, and not just members of the bar.
  3. Having done a lot of copyright litigation and watched a lot of television, I had no doubt that ER and The Pitt were similar in all different senses of that word, including legal. Still, I liked this article in the Guardian on why that is legally actionable.
  4. I’ve been known to joke that I’ve never met a regulation I couldn’t find a reason to dislike. But on first glance, I am not too unhappy with the new disclosure regulation on PBMs. I believe that information and disclosure about fees and costs in health plans is essential to bringing some market discipline to pricing, and I have had enough experience trying to negotiate for self-funded plans in the marketplace to know how hard it is to get accurate information. I think the triggers built into this regulation target the problem accurately, namely the hidden costs and profit taking in the PBM structure. I like this article on the subject if you want to know more.
  5. I’ve seen a lot of things in thirty years of litigating ERISA cases. If I told you some of them, as that old ERISA scholar Jerry Garcia wrote, it would burn off both your ears. But one thing I am not a cynic about in any way in this field are ESOPs. I have gone so far over the years as to call them American style capitalism at its best. Here’s a good blog post explaining a new statutory change providing at least some protection against claims targeting the valuation of ESOPs, intended to increase their adoption.

We’re back!  As I have been promising (threatening?) to do since my partner and I launched our new firm on June 1, I am again writing my weekly Five Favorites for Friday blog post.  I never meant to stop doing it, but I just plain ran out of time each week with the launch, between work on existing cases for existing clients, new work for new clients, business management issues to learn, and all the rest.

For those of you who are new to this series or, given its hiatus, don’t recall the rules, they are simple. Every Friday, I write a post covering five topics, articles, podcasts, posts, and the like that caught my eye during the preceding week but never had time to discuss on their own.

So here we go.

  1. First off, let me thank everyone who has been so supportive in the launch of our firm. I couldn’t list you all if I wanted to.  My partner and I are having a blast, between the complex litigation and ERISA issues we were handling before we launched that we are still handling to the new insurance, ERISA and litigation work we have received from new clients since launching.  We have been working on multiple new DOL investigations, complex advising over insurance coverage for entities in the ERISA space, multiple problems in the provision of different types of benefit plans, a host of lawsuits and arbitrations, ongoing tech litigation, counseling in the AI space, and a number of disputes over contractual relationships in health insurance and health care.
  2. Speaking of contractual complexities in the health insurance space, I like this article from Monday’s Benefits Digest on the new lawsuit by six major employers trying to get access to health plan data and information about their own claims and plans.  As the article explains, “the employers say they couldn’t see their own claims data well enough to know what they were paying for,” and the article references the importance for plan sponsors of understanding their rights and obligations under administrative services agreements.  These types of agreements in the context of benefit plans are seldom customer friendly and I always advise employers to have someone study them carefully before they sign on the bottom line (although to be fair, my views may suffer from a selection bias, in that I typically see those agreements only once there is at least a whiff of a dispute in the air, which may increase the odds that I only see the ones that are problematic).
  3. This series has been off the air for a few months, although I have been commenting on LinkedIn about major judicial happenings in the ERISA world.  So I thought it would be a good idea to include in this week’s Five Favorites a summary of key ERISA litigation developments published during the hiatus, and I liked this one enough to include it.
  4. What employers like to think of as voluntary benefits, I often like to think of as no good deed goes unpunished.  This story from Encore Fiduciary’s Fid Guru blog will tell you why.
  5. Personally, I think plan sponsors should be able to correct any and all mistakes in benefit plans through a government approved correction process, anytime there was no harm to participants or beneficiaries from the mistake or, if there was, the correction involves all the harm being remedied. So I was happy to see an expansion of correction processes and opportunities, although, given my sentiments on the matter, I don’t think the expansion goes far enough.  Anyway, here’s a good blog post on the latest changes. The author’s even got a podcast on the subject, which you can find here. (Yes, I threw a sixth into the Five Favorites as a bonus).

It was a very interesting and somewhat esoteric week in the media when it comes to insurance and ERISA, with a lot of good reading on withdrawal liability, the Department of Labor regulation on alternative investments in retirement plans and the rising scrutiny faced by the fiduciaries of health plans.

  1. Last week, I discussed a new Supreme Court decision on withdrawal liability, noting that the nature of the remedy and the size of many union plans inevitably makes the cases significant in value – which of course, in the legal world, tends to lead to litigation. I am making light – only a little – of the importance of this issue, but the fact is that for any employer considering eliminating its use of union labor, it is not a laughing matter in anyway. I have represented small and large employers confronting this issue, and the liability risk to both is significant relative to the size of the business. This article does an excellent job of explaining the real risks, what they are and how they apply.
  2. I have written more than a few times of my concerns about how plan fiduciaries will have to conduct themselves in light of the new proposed Department of Labor regulations on evaluating assets, including alternative assets. So I greatly enjoyed this article discussing a report from Morningstar evaluating the inclusion of annuity options in target date funds in light of the proposed regulation. I can’t say it makes it look to me like the task for fiduciaries will be easy. And maybe it shouldn’t be. Maybe at the end of the day part of the goal of the regulation is not just to open the doors of plans to such assets, but to impose some discipline on fiduciaries with regard to every type of asset in the plan, including alts.
  3. I might be a little late to this one, but this white paper on private credit and its role in insurance and with regard to 401(k) plans is outstanding. Here’s the thing, though, speaking of the Department of Labor’s proposed new regulation. There is simply no way that the run of the mill plan sponsor or fiduciary can fairly evaluate private credit investments at this level of detail, and it’s not clear to me how many will actually be able to access truly independent and nonconflicted outside advisors who can actually advise them on the issue. I have trouble seeing them being compliant with the new alts reg as a result.
  4. It’s a new world for health plan fiduciaries and there’s a new sheriff in town when it comes to health plans – you pick your favorite cliche and add it in. This great story from Hall Benefits Law does a nice job of summing up how EBSA has turned its focus to health benefits and away from retirement plans, with the result that health plan sponsors and fiduciaries are facing increased scrutiny of their handling of plans.
  5. Yes, I know they have a vested interest in the issue, but this article from T.RowePrice makes a pretty persuasive argument – even to a skeptic of the idea like me – for adding alts to 401(k) plans. I think what makes the article persuasive is that it acknowledges the drawbacks to the idea and the difficulties in overcoming them.

It was an eclectic week on the insurance and ERISA front, at least in my feed. Eclectic, but fascinating. I read at least ten articles this week that could have warranted blog posts all their own, but here are the five that made it, in shorter form, into this week’s Five Favorites for Friday.

  1. Forfeitures are having their day in the sun, with oral argument at one appellate court, a trial ruling adverse to participants claiming losses from forfeitures in a federal district court, and still another appellate bench upholding a dismissal against the plan participant for lack of standing. This write up will tell you, if you are late to this particular party, what this issue really is and what these cases are about, as well as why some courts – including now the Eighth Circuit – don’t believe that plaintiffs can show standing in these types of cases. (I could write a law review article on the question of how standing, civil procedure and ERISA intersect, and as to whether courts are right or not in this regard, but this isn’t the time or place for it – but if you want to hear me hold forth on this issue, feel free to reach out and I will be happy to jump on a call).
  2. I have written many times on the bad faith risks that insurers may face from relying on or utilizing AI in claims handling. Here’s one example. I have extensive experience litigating Chapter 93A and bad faith claims handling cases in Massachusetts and it’s easy to see how someone should prosecute or defend those types of cases once AI is added in as a new ingredient. This post is a nice reminder that state legislatures are weighing in on exactly this issue, and that their skepticism about the use of AI in this context needs to be accounted for by insurers, both in the claims handling itself and in defending claim decisions after the fact and in court.
  3. You know what’s always big news? Withdrawal liability and union pension plans. You want to know why? Because the statute that governs it combined with the reality of union plans consistently makes this issue about big money. Here’s a story about a brand new Supreme Court decision on the calculation of those amounts. What’s most interesting to me about it, however, is that, as the article points out, the decision allows actuarial flexibility in determining the amount at issue. Courts have always seemed reluctant to me to get into the nitty gritty of actuarial determinations, and over the years have often seemed to adopt rules that reduce the need to do that – this is certainly one with that theme.
  4. There’s multiple books worth of thoughts to be written about how AI and insurance coverage should coexist – or whether they even should. This podcast by Kevin Szczepanski is a good addition to the topic. Although it’s titled as focusing on exclusions for AI, it branches off into broader topics of coverage for AI exposures, including whether there should be any and, if so, how will it be cabined.
  5. I have frequently advocated for ERISA plan sponsors and their insurers to take more class action breach of fiduciary duty cases to trial for multiple reasons, including that the defense will do better than plan sponsors, their lawyers and their insurers often assume, and that trying more cases (rather than motion practice, discovery and settlement) will deter the filing of many of the cases. Here is a great blog post making the exact same case with regard to securities class actions, and citing evidence that trials can run just as easily in favor of the defense as the plaintiff class in that context as well.

I really enjoyed writing this week’s Five Favorites for Friday post. It brought me down the nostalgia trail all the way back to my days defending insurance companies against LTD claims and then routed me back to the future with stories about the latest class action theories against plan fiduciaries and the future of benefit administration once AI is fully integrated into it.

Hope you enjoy the trip as well.

  1. This is an excellent article on another voluntary benefits class action that has been filed, again by Schlicter Bogard. The article raises the interesting question of whether plan sponsors and fiduciaries may not have paid that much attention to the cost of the benefit or to vendor compensation because the benefits are paid for solely by employees and not by the employer itself. It may be human nature to be profligate when someone else is footing the bill, but the obvious purposes of the fiduciary duties imposed by ERISA is to require fiduciaries to act as though it’s their money at stake, even if it isn’t.
  2. This is an incredibly well-researched story on long term disability coverage, the standards that control disputes, the role of physician reviewers and the issues raised by long COVID. (It may be behind a paywall, but if this subject is of interest, the article is worth the subscription). My entree to ERISA litigation, which eventually led to everything from breach of fiduciary duty litigation to class action cases and more, was a decade or more of defending LTD cases, including winning a number of appeals at the First Circuit. I always thought my insurer clients in that context did a pretty good job of trying to fairly decide claims, and I never really bought into the demonization of either carriers or claimants that can often characterize that line of litigation. With long COVID claims, just as was the case with chronic fatigue claims or fibromyalgia claims years ago, the complexity of the syndrome, combined with the subjective nature of some aspects of the illness, can often make it hard for the LTD system to process the claims. Over time, as the legal standards and approaches to such claims become more established, the processing of the claims becomes more routine – I suspect you will see the same with long COVID. But it’s worth remembering that this is likely of cold comfort, at best, to people currently suffering from long COVID and having LTD claims denied.
  3. There’s really no question that the large scale RIFs across major tech companies have been driven by the need to free up capital and spending for AI projects. I see it in my practice and it’s now being well reported in the business media. But now we are seeing stories, such as this one, of the elimination of 401(k) matches by tech companies to free up cash for AI investments. There’s an awful lot to be said about this story, but at a minimum, I am not sure beggaring the retired to make the world safer for AI is exactly the right course of action.
  4. Last week’s Five Favorites for Friday post ran very heavily towards ERISA and so I promised that this week the post would skew back more towards insurance. Here’s a nice article about fiduciary liability insurance and the push to add alternative investments to 401(k) plans that meets that goal by checking both the ERISA and insurance boxes. One of the things I do a lot in my practice is counsel employers and plan sponsors on their fiduciary liability insurance, including reviewing it for coverage gaps and to determine whether, as written, the coverage fits the specific types of claims they are concerned about facing. What I like about this article in particular is that it discusses the extent to which adding alts into a plan may change the complexion of the risk and of the policy, possibly raising new coverage issues for a plan. Don’t sleep on that issue if you are a plan sponsor or fiduciary who allows alts into a plan. As the article point out, the coverage impacts of adding alts to a plan may not be obvious, and may instead show up as adjustments to “policy limits, retentions, premiums, and policy wording for fiduciaries.”
  5. We tend to think about AI in discrete increments, such as what would happen if AI were relied upon in picking the investment menus in a 401(k) plan, or if hallucinated data or information ended up in plan communications drafted with AI involvement. But ERISA lawyer Samuel Krause has gone meta on the question, asking – and writing this excellent article on – what it will look like for AI to weave its way into all aspects of benefit plan operations. I think he’s right when he looks at the integration of AI as a universal and system wide question for benefit plan operations, rather than as a series of discrete issues.

Hmm. I seem – despite my best intentions – to have ended up with an all ERISA post this week. I promise you there were plenty of very interesting stories and posts about insurance issues in my in-box this week, enough to literally do a second “Five Favorites for Friday” post this week. But I’ve got multiple filings due today, and my email in-box is overflowing, so I am going to take a pass on writing two “Five Favorites for Friday” posts this week.

I will try to make this imbalance up to the insurance crowd next week.

  1. Fifteen years ago, the Supreme Court at least appeared to expand the scope of equitable remedies that plan participants could seek under ERISA, and in so doing taught most ERISA lawyers a new word (well, really an old word in the legal context but one no one had uttered in the modern era), which was “surcharge.” As I joked back then, the moment the Supreme Court used the word to describe a type of equitable remedy, every ERISA lawyer in the country raced to their Black’s Law Dictionary to find out what it meant (this was so long ago, kids, that the only internet access was dial up, so no one was going to wait for AOL to load to find out the answer). Here’s a great write up of the fact that, even after all these years, courts still aren’t entirely sure what to make of the Supreme Court’s action at that time or of the doctrine of surcharge, and also of the fact that the Fifth Circuit appears to be about to reopen that Pandora’s box.
  2. I like some of the Department of Labor’s recent initiatives, For instance, as I have written elsewhere, I think the new field guidance on investigations of sponsors, service providers and fiduciaries is both excellent and long overdue. However, as I have written elsewhere, I am not convinced that the proposed regulation relating to alternative investments in 401(k) plans provides all that much benefit to plan sponsors and fiduciaries. Here’s an interesting article looking at the regulation from the perspective of plan participants, and suggesting that it needs to provide more pass through transparency to plan participants.
  3. There is a lot of discussion of a litigation crisis relating to 401(k) plans. As a longtime courtroom lawyer, and one who is none too happy about the vanishing status of the jury trial, I have long thought that the real answer to this crisis is for plan sponsors and their insurers to try more ERISA class actions to verdict. Nothing will scare off the filing of frivolous cases, leaving only the arguably meritorious ones, quicker than requiring plaintiffs and their lawyers to incur the expense of a full blown litigation, followed by a trial, in pursuit of a payday. Plaintiffs’ class action lawyers are a rational bunch, and they aren’t going down that road without a sound legal theory and solid facts to back it up, if they know they are eventually going to have to prove their case at trial. I was thinking about this because here’s an interesting story about a case being tried to determine breach of fiduciary duty liability for forfeitures. One thing that may make it more interesting, and result in a very interesting ruling, is that the judge hearing the case has something of a specialty in prominent 401(k) cases.
  4. Class action litigation over retirement plans is so last year. Well, not really – just see the prior item in this post. But the brave new world for everyone from regulators to plan sponsors to class action lawyers is health care, a five trillion dollar market with pricing and (sometimes too cozy) relationships that are now under regulatory and litigation pressure. If you haven’t been paying attention, this is the best high-level overview of the landscape I have seen in a while.
  5. As both the media reporting and my own practice shows, there are serious job losses currently impacting the executive class. The question of AI related job losses across all classes of employees is a major discussion point on all fronts at this time as well. So it’s nice to read a good discussion focused on hiring, not firing, displaced executives and employees, such as Brian Gilmore‘s latest post in his series on COBRA. This time, he discusses reimbursing new hires for the cost of their COBRA coverage from the jobs they left. You can find the post here (you can find the first two posts in his series on COBRA coverage referenced in my last two Five Favorites for Friday posts).

An embarrassment of riches, as the saying goes. That’s what the avalanche of excellent stories, publications, podcasts, YouTube videos and posts about ERISA, litigation and insurance issues looked like to me this week.

But for my own purposes (namely having time to do my work), this weekly post is limited to five of them, so here are the five I selected this week.

  1. The newest and in some ways most important front opened in class action litigation against plan sponsors and fiduciaries involves so-called voluntary benefits, which encompasses an entire range of additional employee benefits that employers often offer. The lawsuits have their own importance, related to the question of whether ERISA makes employers liable for any excessive costs of those products or profit taking by the vendors. But the cases also have a stalking horse aspect to them, in that they are being used to test out whether brokers and benefits consultants can be tagged as fiduciaries in health benefit litigation. Most of the stuff going on with these cases at this point is really still inside baseball for now. However, the lawsuits raise some real questions and issues for employers who continue to provide these types of benefits and want to avoid litigation risk from doing so. This Vorys Benefits Brief discussing these types of claims is helpful in that regard.
  2. This is a great blog post on a new decision finding that an insurer could have a policy reformed to eliminate coverage for a claim, by adding back into the policy an exclusion that the insured knew was intended by both parties to be included in the policy but that had been inadvertently omitted. Insurers are often too quick to reject the idea of fighting for an interpretation of the policy, or here for reformation, that is consistent with the extrinsic evidence as to the scope of coverage, believing that a court will ignore that evidence in favor of interpreting the actual policy language in favor of the insured if the language itself is unclear for some reason. I am always on the lookout for cases that prove the opposite and that might dissuade insurers from taking that default approach to coverage disputes. This one is a good example to cite.
  3. ERISA is rife with “if it looks like a duck, and quacks like a duck, then it is a duck” problems. To me, the quintessential example of this is preemption. It can often be hard to find a principled reason why one case and scenario results in preemption and another doesn’t. Moreover, the tests for preemption are sufficiently imprecise that preemption of a statute or cause of action can often be in the eye of the beholder, leading to an analysis that basically adds up to “if a state statute or cause of action looks like its preempted, and acts like its preempted, then it is preempted.” A similar problem bedevils the question of when different types of compensation plans fall within ERISA, or instead are simply subject to state employment and contract law. If you’re not careful in drawing a line between what is subject to ERISA and what remains subject to state law, ERISA can end up being interpreted to capture various types of employment compensation plans that it was probably never meant to capture. Here is a great write up of a new Fourth Circuit decision explaining why Merrill Lynch’s long term incentive plan for its financial advisors falls outside of ERISA. In making that decision, the Court gave significant guidance to others trying to figure out where the border is between ERISA and state law when it comes to various types of compensation plans.
  4. I was retained to litigate my first top hat plan case about twenty years ago, when a very experienced commercial and business litigator discovered that what he thought was a contractual dispute over a non-competition clause and its impact on certain deferred compensation owed to his client was in fact an ERISA case, which he learned when defense counsel removed the complaint he had filed to federal court. I loved that case – we turned the tables back on defense counsel, who had thought that moving it into an ERISA framework would backfoot plaintiff and his counsel, really quickly. I think this post on LinkedIn from the other day is one of the best summaries of the law of top hat plans if, like my co-counsel on that case back in the day, the issue crosses your desk for the first time.
  5. You know why I am fascinated by COBRA issues? Because in a world where health insurance is closely tied to employment, it shouldn’t be all that hard or complicated to provide health insurance benefits to departing executives and other employees, and yet it is. Here’s the second installment in Brian Gilmore‘s excellent series on providing COBRA benefits to departing execs. (I covered the first in the series in last week’s Five Favorites for Friday, if you are looking for it).

A few years ago, I wrote that the history of legal tech made me believe that the incorporation of AI into legal work would not drive down the costs of legal work or decrease the amount of it needed by clients. Instead, the increased horsepower from incorporating AI into legal work would simply increase the complexity of transactions, litigation and regulatory work that lawyers and clients would engage in, resulting in more, not less, legal spend. I wrote about that in detail here, all the way back in the prehistoric dark ages of AI, all of about three years ago.

More recently, research out of academia has established that my prediction was correct, and has found that dockets show increased litigation work in the average case, corresponding with the time period in which AI has been actively incorporated into legal work.

Bloomberg Law just published an interesting article on the role that AI can play in class action litigation targeting ERISA plans, now rather than in some imagined, AI dominated future. I, along with several other ERISA litigators, talk in the article about how litigators can use AI in class action litigation targeting ERISA plans. I focused on a granular aspect, which is how plaintiffs’ firms can use it to more powerfully target the complaints they file in this area, and how defense lawyers can likewise use it to build out motions to dismiss.

As I explained in the article:

Stephen Rosenberg, head of the Wagner Law Group’s ERISA litigation practice, said plaintiff’s attorneys could also use AI to generate copycat complaints by identifying recent class action complaints and sorting out ones that made it past the motion to dismiss stage.

On the defense side, Rosenberg said the technology can be used to put together a benchmarking defense for a motion to dismiss by identifying fee points and performance points of different options that a client could have selected for an investment menu “without having to laboriously pour through financial data.”

It’s hard to prevent AI from becoming the theme of any end of the week roundup of the news, and that is true here as well to some extent, particularly with regard to the potential risks that AI poses for employers who offer benefit plans. However, I have managed to sneak in some stories about health insurance, including COBRA, this week as well.

  1. Here’s a good article on insurers quietly moving away from covering AI risks in business operations. It’s slightly ironic because insurers are clearly moving towards incorporating AI throughout claims and underwriting operations, but it’s understandable – their own AI based operations are a known risk and one they have control over, whereas insureds’ risks in this regard are much more amorphous, harder to pin down and subject to a great deal of variability with regard to the dollar value of the risk. In any event, the extent of insurability for AI risks is something that businesses adopting AI in their processes need to pay close attention to.
  2. This is a great article on the labor market theory of monopsony. Why am I discussing it here, other than that I like the subject and the article is well-written? Because it is really about the existence of market forces and the extent to which their absence distorts a market, in that case concerning employee compensation. There are a lot of ways to distort a given market, and the decades of class action litigation over retirement plans were originally triggered by a 401(k) marketplace rendered not fully competitive by a lack of transparency and questionable compensation structures and designs. Years of litigation and regulatory action eventually dislodged the worst of that phenomenon. But this isn’t just a nostalgic point. There are currently a range of behaviors preventing the marketplace for health benefits from being fully or even substantially competitive, from the point of view of a given plan sponsor or participant. Regulatory changes targeting this, along with legal challenges to it, are already underway – and you can easily characterize the latest phase in ERISA regulation and litigation as an effort to make this particular market a more open and competitive one.
  3. I like this article discussing the liability risks that are inherent in using AI for making business decisions and in business operations. The discussion in the article of the risks of misrepresentations inherent in using AI to generate statements attributable to the business or documents published by it has particular relevance in the context of ERISA. It’s easy to picture inaccurate summary plan descriptions, fee disclosures or other mandated documents being generated by AI – and it’s also easy to picture the liabilities and lawsuits they could trigger.
  4. AI hallucinations in legal briefs are, in fact, completely avoidable, and by now everyone knows that Sullivan & Cromwell has become the highest profile example of a law firm failing to do so. If any of you missed it, here’s a good story explaining what happened. But the risk of AI hallucinations are hardly limited to court filings. I was quoted in an excellent Bloomberg Law article discussing the fiduciary liability risks for employers, plan sponsors and plan fiduciaries posed by the use of AI, and the risk of hallucinations, in 401(k) plans. The article is behind a paywall, but you can find a summary and a link to it here. Why is it important enough to bring to your attention here? Because if AI begins putting inaccurate investment performance and other financial data into the 401(k) ecosystem, it will be opening up Pandora’s box for employers, plan fiduciaries and employees.
  5. I have said before that no one explains complicated health and welfare benefit issues in plain English better than Brian Gilmore of Newfront, and he has done it again, this time with regard to COBRA subsidies for executives who have been terminated. It’s well written enough that even if you don’t think you have any interest in this topic, you will change your mind by the time you are partway through. With mass layoffs across the senior ranks of major employers seemingly a daily event these days, it’s particularly timely information.

Last week’s Five Favorites for Friday post ran a little heavy, with a focus on five different issues and articles concerning the Department of Labor’s new proposed regulation intended to somehow reduce class action litigation and increase participants’ exposure to alternative investments all at the same time. That seems like a trick worthy of Penn & Teller, or at least of a lawyer version of the duo.

So this week we are going both a little lighter and a little more eclectic, all at the same time, by discussing a wider variety of articles and topics, including the corporate overlord in the Alien movies.

  1. The other week I discussed an article totaling up all of the class action filings in New England in 2025 and which suggested that the concern that there is an excessive boom in ERISA class action litigation might be overstated. Lo and behold, and naturally enough, now comes this Bloomberg Law article documenting that 2025 was so last year, and that there is a verifiable boom in ERISA class action filings in 2026. (Hat tip to my colleague Caroline Fiore for forwarding the article to me and pointing out this finding). What’s most interesting to me is the discussion in the article about the fact that the filings, and what they allege, seem to ebb and flow depending on what areas of ERISA class action claims are succeeding. One observer notes that class action lawyers go where the money is, so to speak, and there are thus more filings in the ERISA space than in others because class action lawyers have noted a higher degree of success in the ERISA area than they can find in other areas of class action litigation. Similarly, the article points out that class action filings related to forfeiture claims are down, presumably because those claims have not fared well in the early going. There’s a lot one could say about this, but for now I will limit myself to this point: if filings decline on losing theories and increase on theories that are successful, doesn’t that undercut the narrative – even if just a little bit – that the boom in ERISA class action filings is due to meritless claims being filed? And that instead the litigation system is working the way it’s supposed to, by allowing meritorious claims to proceed while winnowing out the poor ones?
  2. Not that any of that much matters, because worrying about the ratio of meritorious ERISA class actions to frivolous ones is an artifact of the decade long boom in retirement plan litigation. As I have written many times before, we have now entered the era of class action litigation over health and welfare benefits, where the lack of transparency, high costs and conflicted decision making that plagued retirement plans years ago is only now coming under the bright light shined by the class action bar. This point is discussed nicely in this article. But what I really like about this article is its emphasis on the increased access to data in the AI age, and the fact this is likely to empower the plaintiffs’ class action bar when it comes to these types of cases. That’s just going to add to the perfect litigation storm that is headed directly at employers, plan fiduciaries and brokers when it comes to health plans.
  3. As an armchair economist, I enjoyed this article in Planet Money comparing rapacious employers to the corporation in the Alien movies who convinced employees to face the murderous creature by invoking clawback provisions in their employment contracts. No, really – that’s what the article says happened! In that idea, though, is a representation of one of the great distinctions between employment law and ERISA law (which as any employment lawyer who has tried to litigate an ERISA case will tell you, aren’t actually the same thing), namely that while employment law may run towards being pro-employer in many circumstances, ERISA – particularly once you get away from disability plan litigation, where the standard of review is stacked against employees – gives a lot of tools to employees and their lawyers. Whether it’s the current power of the ERISA plaintiffs’ class action bar, the high standard for fiduciary conduct that is literally written into ERISA itself, anti-cut back rules that limit reduction in benefits, Section 510 – which makes retaliation against participants seeking benefits illegal – or a host of other rules and provisions, ERISA gives employees and their lawyers a lot of firepower. There’s no way that corporation in Alien could have forced the employees in to face the creature by targeting their retirement benefits – that wouldn’t have worked.
  4. One could have predicted this. In last week’s Five Favorites for Friday post, I catalogued a series of complicated issues (and corresponding risks for plan sponsors) inherent in any decision to add alternative investments to 401(k) plans in response to a new Department of Labor initiative in this regard. Bloomberg Law reporter Brett Samuels took the temperature of plan sponsors and fiduciaries on the issue, and found that while financial industry types who are certain to profit from the initiative are very excited about the idea, plan sponsors and their lawyers aren’t so keen on it. Brett spells it out here. This is pretty smart of plan sponsors and their advisors. They face serious risk from this course of conduct and so deciding to be a later adopter, not an early one, of alts may be the safest course. At a minimum, by waiting, they will eventually end up with a better sense of what the litigation environment on this issue turns out to look like, before they ever expose themselves or their plans.
  5. Wow. Just wow. I had multiple very deserving candidates for the number five spot in this week’s post, but they all got trumped (no politics intended, but I have decided to reclaim the use of that word, which is very useful when writing) by the amazing story in Crain’s Detroit Business of the ERISA class action brought against Blue Cross Blue Shield alleging that it profits from its own mistakes as the administrator of self-funded health plans. Now, I have both represented and sued TPAs, including of self-funded health plans, and I don’t think anyone expects they won’t make mistakes when administering complicated plans. But the allegations here are remarkable. Unfortunately, you cannot access the article itself if you are not a subscriber, but you can find an excellent synopsis (as well as a link to the article if you are a subscriber or want to become one) in this LinkedIn post.