The Right to Sue for Harm Caused by Breach of Fiduciary Duty

Three courts have recently issued positive rulings in favor of participants in defined contribution plans or “individual account plans” where only some of the participants are injured due to the plan sponsor’s wrongful actions.  Some courts have ruled that unless ALL plan participants are injured, the injured participants cannot sue.

New cases in the 3rd Circuit, 5th Circuit, and 7th Circuit have all agreed that even though not all participants were injured the injured participants could still go forward with their lawsuit.  The most likely situation where this type of situation arises is where a defined contribution plan offers participants several choices of where to invest their assets, and then misleads the participants on the quality of one of the investments, so that only the participants who chose that particular investment are harmed.  Read more about these cases.