Pension & Benefits News $1.8 billion in ERISA-related damages awarded from 2016-2018
Tuesday, June 25, 2019

$1.8 billion in ERISA-related damages awarded from 2016-2018

By Pension and Benefits Editorial Staff

Awards totalling $1.8 billion occurred despite a downturn in case filings. The number of ERISA case filings declined from nearly 9,000 cases to about 6,600 cases from 2010 to 2018—a 26 percent drop, according to Lex Machina’s first ERISA Litigation Report, which focuses on the three-year time period from January 1, 2016 to December 31, 2018 to showcase recent trends in the U.S. District Courts, but also looks at longer-term trends.

The report highlights a broad range of litigation data, including case filings, case timing, most active districts, judges, parties, and law firms, case resolutions and findings, and damages awarded. The report focuses on two primary case types: claim denial and delinquent contribution claims, which make up 85 percent of all ERISA cases in the Lex Machina database.

Delinquent contribution. Delinquent contribution case filings have seen a significant decline from nearly 4,400 cases in 2010 to more than 1,900 cases in 2018, the report also found. This decline is likely the result of a decrease in pension-related litigation over the last decade.

Claim denial.On the other hand, claim denial case filings have risen over the same period, peaking at more than 4,000 filings in 2017, up from just over 3,000 filings in 2010, indicating employers are switching from pensions to 401(k)s or similar retirement accounts.

More key findings. Other highlights of the report covering 2016 through 2018 include these:

  • Courts awarded more than $1 billion in approved class action settlement damages. The next largest damages award type was ERISA plan benefits (more than $670 million), followed by liquidated damages (more than $80 million).
  • The Northern District of Illinois had the most case filings during the 2016-2018 period (1,698 cases), likely due to its strong union presence and large population. The next most active districts were the Central District of California (1,053 cases) and the District of New Jersey (1,030 cases).
  • The top four most active ERISA judges in the United States came from the District of South Carolina, due to the large number of life insurance companies in that state, as well as a specialized ERISA case management structure.
  • In claim denial cases, healthcare companies were the most active plaintiffs, while insurance companies were the most active defendants. In delinquent contribution cases, plaintiffs were mostly pension funds, while defendants tended to be construction companies or insurance companies.

SOURCE:  ERISA Litigation Report 2019.

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