Faegre Drinker filed an amici curiae brief on behalf of the ESOP Association and American Benefits Council in Ramon Dejesus Cedeno v. Argent Trust Co. et. al. The brief was filed in an appeal of a district court ruling that could effectively ban individualized arbitration of ERISA fiduciary-breach claims. This case is one of several that address the enforceability of arbitration provisions in ERISA plan documents. In the appeal, the Second Circuit will address whether an ERISA plan can require individualized arbitration of ERISA fiduciary-breach claims.
The district court held that a participant in an ERISA plan has a right to pursue all loss to an ERISA plan, not just the individual’s loss in a plan account, and that an agreement requiring individualized arbitration was unenforceable. The amici curiae brief provided an analysis of ERISA’s legislative history and principles of the common law of trusts, arguing that this contextualized information demonstrates that ERISA permits individualized arbitration. The brief also argued that banning individualized arbitration would create an environment prone to prohibitively high risks of litigation, and the district court’s ruling would undermine Congress’ goal of striking a balance between a participant’s rights to benefits and protecting plans against excessive litigation.
