Washington – The ERISA Industry Committee (ERIC) and coalition allies filed an amicus brief with the U.S. Supreme Court supporting the petitioners in Capital Group Companies, Inc. v. Pover. The brief urges the Court to grant certiorari and reverse a Ninth Circuit ruling that lets one 401(k) participant sue on behalf of every other participant without their knowledge or consent.
Each 401(k) account belongs to an individual worker. When a participant claims a plan fiduciary’s mistake costs them money, the Employee Retirement Income Security Act (ERISA) lets that participant sue to recover their losses. The plaintiff here, Cathy Pover, challenged five investment options but invested in only two. The Ninth Circuit held she could sue for losses to all plan participants’ accounts regarding all five options. The Fourth Circuit reached the opposite conclusion in a similar case, leaving the courts of appeal split.
“Your 401(k) account is yours alone. If you think a fiduciary’s mistake cost you money, you can sue to get it back,” said Doug Hinson, Executive Director of the ERIC Legal Center. “What you shouldn’t be able to do is sue for coworkers who may not want you to speak for them, particularly because some of them might be worse off if you win. There are protections for other participants in class action rules, but the Plaintiff and the district court in this case skipped over them. That’s unfair, and the Supreme Court should step in to make that clear.”
The brief argues that a plaintiff has a stake only in her own account, and that anyone seeking money for a whole group must first win class certification, which gives other participants notice and a chance to opt out.
Additionally, the brief also warns of added settlement pressure on employers, which pulls money from benefits. Defending cases is expensive, and the dollars involved in these types of cases are so large that the defendants have a strong incentive to settle, even if they believe they will win. And the real winner in these settlements are the lawyers. A survey of 2025 ERISA settlements cited in the brief found the median of average per-participant awards was $67.79, while average plaintiffs’ attorneys’ fees were $1.59 million.
Read ERIC’s full brief here.