There is a great article today in the Wall Street Journal on the adoption of 401(k) plans by smaller companies, noting that this phenomenon is driven by both legislative and labor market developments, and crediting these changes with pushing employee participation in 401(k) plans to half of the labor force. All good news, but there is one point about this development that is worth mentioning and probably should have been mentioned in the article, given its focus on the adoption of such plans by small businesses.

In my practice, I have often seen poor administration of 401(k) plans run by smaller employers, not because of anything nefarious on anyone’s part or even anything at all on the part of the employer. Instead, it arises because of the nature of many of the administrators available to small plans and employers. Some are good, some aren’t, but generally speaking, they don’t bring the same level of resources to bear on administering plans that the large companies that administer the plans of large employers bring to the table. For smaller employers either thinking of offering or already offering a 401(k) plan, this is a point to remember.

If you are a small employer, while the marketplace will dictate which vendors are available to you, there are steps you can take to ameliorate the risks and concerns this raises. I will give you one of those right now: pay close attention to the contract you enter into with the administrator and, if at all possible, have an ERISA lawyer review it before you execute it. There are many key points and issues in offering a 401(k) plan that, if problems arise, will be affected by the terms of that contract, and it is a lot better if the employer offering such a plan knows those terms at the outset than only after a problem arises. It is even better if the employer and counsel have a chance to negotiate with the administrator over those terms before the agreement is signed. I cannot count how many times employers have brought such contracts to me only after a dispute has arisen – and at that point, the cure is a lot worse than prevention, by means of careful contracting, would have been.

Some things are just evergreen when it comes to ERISA, a point that is driven home whenever, as now, I publish my top ten most read blog posts of the prior year. The Supreme Court just returned, for about the umpteenth time, to the subject of excessive fee class action litigation and the question of how to balance the value of such cases to participants against the costs to plan sponsors. Coincidentally, the fourth most popular post in 2024 on this blog was about the exact same issue, which I wrote about in the post “An Easy Read on the Past and Future of 401(k) Plan Litigation.” The more things change, I guess . . .

Over on LinkedIn, Megan Wade, who writes “A Brief Review – A Connecticut Appellate Law Blog” and recently launched an appellate litigation practice in Connecticut, asked the question of at what stage of a case trial counsel should associate in appellate counsel. I thought I would answer this from the perspective of someone with a double digit number of both appeals and trials under his belt – and the answer is it depends. Now before many of you mutter “obviously” and stop reading, I mean more specifically that it depends on the case strategy and the interrelationship in that strategy of the trial and appellate phases.

If it’s a fact based case and the only likely appellate concerns that will arise at trial involve preserving for appeal evidentiary or other typical issues that arise “in the run of play” at trial, trial counsel should be capable of protecting those issues for appeal and appellate counsel can just be retained later, if and when the losing party appeals. But if there is a complex legal issue that will be central to the suit’s outcome that is unlikely to be fully resolved at trial and, barring settlement, almost certainly will be subject to appellate review, then that is a different situation. In that case, bringing in appellate counsel even before trial can be important, both for planning how to frame the issue at trial so that it can be best argued on appeal and to deal with any disruptions to that strategy that arise during the trial (after all, no trial ever really goes exactly as planned and the mark of a good trial team is their ability to adjust on the fly).

I will use a concrete example from my own practice to illustrate my point. I was defending a pierce the corporate veil case against a senior officer of a company, with the plaintiff relying on an open question of law in the jurisdiction we were in to make the claim. We believed that the proper resolution of that open question of law provided my client with a powerful defense and, if included in the jury instructions, should result in a jury verdict in our favor.

We also knew that we had no other defense, however, and that, therefore, if the trial court refused to include a jury instruction to that effect, we were certain to lose at trial. Given the circumstances, we deliberately tried the case in a manner directed at prevailing under what we believed should be the new rule of law, figuring that either the trial judge would agree to include it in the jury instructions and the jury would rule in our favor, or the trial judge would refuse to grant the instruction, we would lose at trial and then have to fight that issue on appeal (we also felt confident even before trial that, if the trial court refused to give that jury instruction, the appeals court would hold that the instruction should have been given and thus any verdict in favor of the plaintiff would be reversed).

End result in the case? The judge refused to include the requested jury instruction, the jury came back against my client after a half day of deliberations, and the appeals court agreed with us that it was reversible error not to give that instruction. The appeals court further held that a reasonable jury, on the evidence at trial, would have found for my client if the instruction had been granted and therefore entered judgment for my client.

That particular case required appellate planning and expertise long before trial, rather than just after trial. In a case like that, it makes sense to have appellate expertise on board earlier rather than later, whether that is because it is part of the skillset of the trial team or by bringing in an appellate specialist.

And that is why when to bring in appellate expertise depends – it is all about what is necessary to get the win and when that expertise will be needed under the specific circumstances and strategy at issue.

This is a really good day to be returning to my countdown of the top ten most read blog posts of 2024, because just yesterday, the Supreme Court returned to a central issue in ERISA class action and excessive fee litigation: namely, what are the pleading standards and how can they be used to control the scope of such litigation, including avoiding the prosecution of essentially meritless such claims, which benefit only the defense lawyers and, if the defendant or insurer pays a settlement to avoid defense costs, then the plaintiffs’ lawyers as well.

Why does that make today a particularly propitious day for me to return to this countdown? Because the fifth most read post on this blog in 2024 was about this exact topic, with the discussion driven by a summary judgment ruling allowing such a claim to proceed in circumstances where, in point of fact, the case appears to have clearly lacked objective merit. And with that, here is the fifth most popular post from 2024, “Summary Judgment Proceedings in Breach of Fiduciary Duty Litigation: The Lessons of Sellers v. Boston College.”

I don’t exactly understand why this particular post made it all the way up the rankings to be the sixth most read post on my blog in 2024, as substantively it isn’t anywhere near as interesting to me as most of the other posts in the top ten, which discuss more novel or esoteric aspects of ERISA or insurance litigation. However, my best guess is that it was popular because it focused on one of the most evergreen, yet often misunderstood, topics in ERISA litigation – the role and impact of arbitrary and capricious review. I have a lot I could and would like to say on that topic, both today and every day, but that would require me to sit down and write for a while, something I have already done once today so as to write this LinkedIn post on the insurance markets in the face of pandemics and wildfires. So instead, without further delay, here is the sixth most popular post on my blog during 2024, “What Does Arbitrary and Capricious Review Really Mean, Anyway?

Story after story keep telling the same story – that class action litigation against ERISA plan sponsors and fiduciaries is a growth industry. Encore Fiduciary’s Daniel Aronowitz and Karolina Jozwiak have a great, data rich piece out in Planadvisor documenting this fact, and the legal media world is all atwitter about the latest new way to sue a plan fiduciary, which is by accusing him or her of the dastardly deed of considering ESG factors in selecting investments.

I mention this because it is a perfect lead in to my seventh most popular blog post of the year just gone by, which was a plea for plan sponsors and their insurers to invest in reining in the run away costs of this type of litigation. I had fun with writing it, but it was driven, at the end of the day, really by a certain level of frustration with the status quo in the legal and insurance world with these types of cases. And with that lead up, here is the seventh most popular post on my blog in 2024, “A Modest Proposal for Solving (At Least Part of) the ERISA Class Action Litigation Crisis.”

It’s interesting. Blog posts have “legs” (you should get the intentional pun in a minute) for all sorts of reasons, and it can be hard to figure out why in any particular case. With regard to my eighth most popular blog post of 2024, it might have been the great picture of horses racing (there – that’s the “legs” pun) or it might have been the thoughtful discussion of how a judge’s views on summary judgment as a tool and the inherent standards can affect the outcome of a case. Regardless, as I continue with my countdown of my ten most popular blog posts of 2024, here is number eight, “Horse Races, Judges and Summary Judgment: Further Thoughts on Sellers v. Boston College.”

Continuing with my countdown of my top ten most read blog posts of 2024 – as chosen by you, the reader! – leads me today to one of my favorite topics, namely the increasing targeting of small (relatively speaking) ERISA plans by class action firms bringing suits alleging that the plans were too expensive. In my ninth most perused post of last year, I discussed the similarity between these types of suits and the strike suits filed against companies that I defended in a past life as an IP litigator (I used to have more of a general commercial litigation practice, of which I would joke that one half was insurance coverage and bad faith litigation, one half was ERISA litigation and one half was IP litigation) and what we can learn from that comparison. The post was “Why Turning Excessive Fee Class Action Litigation Into More of an Insurer Managed Exposure Will Benefit Both Insurers and Plan Sponsors” and you can find it here. Hope you enjoy it.

When I was growing up back in the seventies, one of the highlights of the end of the year was that the rock stations would all compile lists of the top songs of the year, and then play them all in one long countdown – often without any ads! There was no Spotify yet, or Spotify Wrapped, so this was about the only way you could hear the year’s top songs in review.

Taking my cue from the disc jockeys of that era, I am launching today my countdown of the top 10 read posts of the year on my blog. I confess that some of this is because I spent some time over the holidays learning how to use Google Analytics, and now I want to put that effort to work.

So without further ado, here is number 10, the tenth most read post on my blog in the year just ended: Generative AI, Nuclear Verdicts and Insurance Bad Faith: My Takeaways from DRI’s Insurance Coverage and Practice Symposium.

Like many lawyers with expertise in insurance coverage, I was immediately contacted after the pandemic hit by business owners – often restaurant and bar owners – about seeking business interruption coverage under their insurance policies. My usual conclusion was that you could at least submit a claim and see what happens, but that, unless you had particularly deep pockets and/or large losses, I didn’t suggest bringing suit. My advice was based on two points: first, that recovering insurance benefits under the facts of the losses and the coverage terms was going to be difficult and, second, the statute of limitations would allow them to wait and see how the case law shook out on the issue before making a decision.

Time would show that my advice was pretty good – most jurisdictions and courts have since found there to be no coverage under business interruption coverage (also known as business income insurance, in the same way and for the same reason insurers sell and consumers buy life insurance, not death insurance) for pandemic shutdown related losses. The big insurance story of December, however, was the North Carolina Supreme Court finding to the opposite, and holding that, at least with regard to policies that did not include an express exclusion for losses due to viruses, coverage does exist for such claims.

To me, this is almost an epistemological question or perhaps an etymological one, in the sense of determining what meaning should be assigned to the language used in the general insuring grants of business interruption coverage where, in truth, there was almost certainly never an actual meeting of the minds between insurers and insureds over the scope of that coverage and its application to an event as unexpected and unprecedented as the pandemic and its related shutdowns. Certainly insurers who issued such coverages with an express virus exclusion were anticipating such a risk, even if they could not have anticipated its exact parameters, and insureds or their brokers were on notice at the time of the purchase of the insurance that coverage for virus driven shutdowns was not something they should reasonably expect.

But the story is not necessarily the same with regard to policies that provided business interruption coverage but did not include a virus exclusion. It is probably not fair to assume that an insurer that left such an exclusion out was actively planning out what coverage it intended to sell for a virus driven pandemic, and I highly doubt most insureds ever even read that coverage – yet alone considered that question – at the time the policy was purchased. Most courts and most insurers have simply fallen back on the scope of the insuring grant itself, which doesn’t quite reach the events underlying the pandemic based shutdown and related losses, leading to the absence of coverage. But the language itself isn’t crystal clear in that regard, and there is room to argue over it – even if, in most courts, insurers have prevailed on the question.

This is where, I think, the general rules, standards and principles of contract interpretation – beyond just the usual application of interpretative cliches in coverage disputes such as those favoring insureds where language might be deemed ambiguous – have a role. In contract law, numerous interpretive doctrines, approaches to unclear contractual terms and rules for the use of extrinsic evidence exist that are used to determine the meaning of the contract where the language used by the contracting parties doesn’t sufficiently resolve the question. From both a practical and doctrinal perspective, insurance coverage disputes typically are not decided using the same approach or by use of these same interpretive tools and approaches.

Here, though, adopting and fully applying those same rules is likely the best way to conclude what the scope of the business interruption coverage really is or should be with regard to pandemic related closures, in circumstances where the policy lacks a virus exclusion. Full use of all the tools of contract interpretation, including close study of extrinsic evidence, would be the best way to reach as accurate as possible a conclusion as to whether business interruption coverage should, as a matter of contract interpretation, be extended to pandemic era shutdowns.