The U.S. Chamber of Commerce has ramped up its legal campaign punching back against the expansion of proposed class actions challenging 401(k) plan fees.
The organization filed amicus briefs in a trio of cases in late February and early March urging federal district courts to dismiss claims against companies brought under the Employee Retirement Income Security Act. That followed a similar burst of briefs filed in three ERISA cases at the motion-to-dismiss stage last fall.
“This is unique,” said Ruben Garcia, a labor and employment law professor at the University of Nevada-Las Vegas who’s written about amicus brief strategy. “It’s rare that amicus briefs are filed in district court. This particular pattern is even more rare.”
The Chamber’s strategy reflects private sector concern with the surge in 401(k) fee class actions. The number of such suits filed jumped nearly five-fold from 2019 to 2020. The group said in briefs that “the year-and-a-half since then have only seen more of the same.”
The spike in litigation is partly due to plaintiffs’ attorneys cherry-picking data and disregarding realities of plan management to create a picture of mismanagement, the Chamber argues. Courts often lack the context to toss the cases at the motion-to-dismiss stage, which puts pressure on employers to settle cases, the group said.
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