Recent ERISA Fiduciary Case Highlights

03.18.2021

The KMK Law Employee Stock Ownership Plan (“ESOP”) team and ERISA defense team recently achieved several successes for our ERISA fiduciary clients. The KMK team achieved a tremendous result for our client, Capital Trustees, LLC, in an ESOP case pending in the United States District Court of the District of Massachusetts in Boston. Our client was sued for violating several sections of ERISA, state law and other federal statutes, arising from its role as a transactional ESOP trustee.

Members of our ESOP defense team, Mike Scheier, Brian Muething, and Jacob Rhode, filed a motion to dismiss the claims. After full briefing, and an oral argument, the court dismissed all of the plaintiff’s claims against our client with prejudice, meaning the plaintiff will not have an opportunity to amend its claims. This success follows on the heels of another successful motion to dismiss a recent case pending in the United States District Court for the Eastern District of Wisconsin in Green Bay. In that matter, the plaintiff filed a section 502(a)(2) ERISA claim against our client, an institutional ESOP trustee, alleging violations of ERISA section 404 (breaches of fiduciary duties), section 405 (co-fiduciary liability), section 406 (prohibited transaction claim) and other state and federal laws. After briefing and argument, the court dismissed all claims against KMK’s client. Rounding out our recent successes, the ESOP defense team is defending an appeal of a decision dismissing an ERISA fiduciary from a case because the state law claims asserted against the fiduciary were preempted under ERISA’s broad preemption provisions in section 514.

Whether a small matter or a bet-the-company issue, the KMK Law ERISA Defense team brings creative and cost-efficient solutions to both ERISA fiduciaries and plan sponsors.

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