A New Look at Standing for ERISA Causes of Action in Defined-Benefit Plans

Since the Employee Retirement Income Security Act of 1974 (“ERISA”) was enacted, courts have shifted away from analogizing to trust law and consequently have created a new precedent that raises the bar for ERISA litigation. Courts have narrowed the application of the Article III standing-to-sue requirement as it applies to ERISA breach-of-fiduciary-duty cases when a Defined-Benefit Plan is involved. This cause of action in Defined-Benefit Plans is dismissed on the grounds that private plaintiffs lack sufficient injury to establish standing. However, private plaintiffs in Defined-Contribution Plans are not experiencing this same difficulty, despite ERISA granting the same rights regardless of the type of plan. Notably, in Thole v. U.S. Bank, N.A. (decided June 1, 2020), the U.S. Supreme Court began a push towards a more expansive application of the standing doctrine in breach-of fiduciary-duty claims involving Defined-Benefit Plans, also demonstrating the controversy of standing in ERISA cases because the Court was split on this issue 5-4. This Note discusses inconsistencies that are embodied in the new precedent based on the plain language of the statute and Congress’s implicit intent. It also analyzes the consequences of courts’ narrowed interpretations and the effect on future ERISA litigation, while noting that the dissent in Thole was a more compelling argument and would eliminate many of these consequences. In analyzing these issues, this Note advocates for equal treatment among private plaintiffs and suggests adopting a new approach for the standing requirement. There are two proposed methods that would allow for participants and beneficiaries of Defined-Benefit Plans alleging breach of fiduciary duty to establish standing, both of which remain consistent with Congress’s intent and effectively resolve the implications associated with the current precedent.