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ERISA • Employment Law

Settlement Reached: Circuit Split Remains in ERISA Breach of Fiduciary Duty Claims

16 Oct 2018

On September 20th, 2018, the Supreme Court of the United States dismissed, at the parties’ joint request, an ERISA lawsuit (Pioneer Centres Hold. v. Alerus Fin.) that could have potentially resolved an existing circuit split over who bears the burden of proof in ERISA breach of fiduciary duty claims. The case was dismissed because the underlying dispute was settled by the parties.  

For now, this circuit split will remain in place. In this article, our Philadelphia ERISA litigation lawyer provides a brief overview of where different circuit courts currently stand in regards to the burden of proof in breach of fiduciary duty actions brought under the Employee Retirement Income Security Act.

Some Circuit Courts Put the Burden Squarely on the Beneficiaries

In several circuit courts — the Sixth, Ninth, Tenth, and Eleventh — judges have held that beneficiaries and not fiduciaries bear the burden of proving causation when they bring an ERISA-based breach of fiduciary duty lawsuit. More specifically, it is on the plaintiff to prove that there is a causal link between the fiduciary’s alleged misconduct and the actual financial losses sustained by the beneficiaries of the ERISA plan.

Some Circuit Courts Shift the Burden of Proof to the Fiduciaries

In other circuit courts — Second, Fourth, Fifth, and Eighth — judges have ruled that the burden shifts to the fiduciary as soon as the plaintiff (the beneficiary) is able to establish a prima facie case of breach of fiduciary duty. A prima facie case is one that relies on basic evidence that is sufficient to prove something and that can be accepted until it is refuted. With this legal standard, the hurdles that beneficiaries must clear in ERISA breach of fiduciary duty claims are far lower.

Will This Circuit Split be Resolved?

The circuit split may be resolved at some point in the future. Indeed, most significant circuit splits are eventually resolved: The Supreme Court often grants certiorari in cases that can help to resolve circuit splits and bring uniformity to federal courts across the country. However, until the nation’s highest court actually decides to do so, the circuit split on the ERISA breach of fiduciary question is likely to remain in place. 

Contact Our Philadelphia ERISA Attorney Today

At The Garner Firm, we represent executives, workers, and other plan participants in all aspects of ERISA litigation. Our Philadelphia ERISA lawyer has extensive experience handling complex breach of fiduciary duty claims. To find out more about what we can do for you, please do not hesitate to contact our legal team at (215) 645-5955 to schedule a free, fully confidential consultation.

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Mr. Garner is an ERISA employee benefits and employment attorney with over a decade of experience. The laws governing employee benefits, the employment relationship, and the workplace are complex.

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