ERISA Lawsuit News: Tobacco Surcharges, Supreme Court, and DOL

ERISA lawsuit news in 2026 has been dominated by a sharp jump in class action filings: nearly 70 proposed class actions were filed in the first quarter alone, roughly double the pace of the same period in 2024 and 2025.¹ The surge is powered by new legal theories rather than the excessive-fee complaints that defined the field for a decade, and it lands against a backdrop of major Supreme Court activity, a Department of Labor that has shifted toward defending employers, and a bill in Congress that would raise the bar for filing these suits.

The numbers tell the story. Plaintiffs filed 155 ERISA fiduciary class actions in 2025, with 98 targeting 401(k) plans and 39 targeting health plans.² Only one class action filed in early 2026 focused primarily on 401(k) fee levels. Plaintiffs achieved class certification 95% of the time in 2025, which fuels both settlements and copycat filings.¹

Tobacco Surcharge Suits Are the Largest New Category

More than a quarter of the class actions filed in early 2026 challenge employer health plans that charge extra premiums to tobacco users.¹ Nearly 50 such suits were filed across 2024 and 2025.³

Recent district court rulings have tilted toward employers. In Noel v. PepsiCo, dismissed by the Southern District of New York on February 27, 2026, the court held that ERISA does not require a plan to retroactively reimburse a roughly $900-per-year tobacco surcharge to participants who completed a cessation program mid-year, and that administering the surcharge is a “settlor function” rather than a fiduciary act.⁴ The Eastern District of Missouri dismissed Plesha v. Ascension Health Alliance on similar reasoning in February 2026.⁵ Lower courts remain split on standing and disclosure requirements, and appeals are pending in the First and Second Circuits.¹

Voluntary Benefits Enter the Litigation Field

On December 23, 2025, Schlichter Bogard LLC, the firm that pioneered 401(k) excessive-fee litigation, filed four class actions targeting voluntary insurance programs like accident, critical illness, cancer, and hospital indemnity coverage — categories that had largely sat outside ERISA fiduciary scrutiny.⁶ The suits name both large employers and their benefits brokers:

Brewer v. CHS/Community Health Systems, Northern District of Illinois, against Community Health Systems and Gallagher.
Braham v. Laboratory Corporation of America Holdings, Northern District of Illinois, against Labcorp and Willis Towers Watson.
Pimm v. United Airlines, Northern District of Illinois, against United Airlines and Mercer.
Fellows v. Universal Services of America, Southern District of New York, against Allied Universal, Mercer, and Lockton.⁶

The theory is that these programs fall outside the DOL’s “voluntary plan” safe harbor because employers do more than passively deduct premiums: they select carriers, promote the programs at open enrollment, and brand them as company benefits. One complaint alleges $33 million in excess broker commissions.⁷ The complaints treat brokers as “functional fiduciaries” who allegedly screened out lower-cost options to protect their own compensation.⁸ The cases are early, but if the theory takes hold it would extend ERISA’s fiduciary framework well beyond retirement plans.

Target-Date Funds and Stable Value Funds

Twenty class actions filed in early 2026 challenge target-date fund lineups, particularly suites associated with American Century Investments, on the theory that fiduciaries should have swapped them for better performers.¹ Stable value fund claims are also climbing, at roughly 10% of recent filings, with plaintiffs arguing these funds should have produced higher returns during a period of elevated interest rates. In 2025, 27 suits raised stable value claims, a 500% jump over 2024.⁹

Meanwhile, 401(k) forfeiture suits have cooled. Only about half a dozen were filed in early 2026, down from a wave of nearly 100 over the previous three years, after courts sided with employers in 24 of 28 recent dismissal rulings. Appeals are pending in the Third, Eighth, and Ninth Circuits.¹⁰

Supreme Court: Decided, Pending, and Newly Argued

Cunningham v. Cornell University

The unanimous April 2025 decision in Cunningham v. Cornell University made ERISA prohibited-transaction claims easier to plead. Justice Sotomayor wrote that plaintiffs need only allege the basic elements under Section 1106(a)(1)(C) and do not have to anticipate or negate the Section 1108 exemptions, which the Court treated as affirmative defenses. Justice Alito’s concurrence, joined by Justices Thomas and Kavanaugh, urged district courts to order plaintiffs to file specific replies to exemption defenses to screen out weak claims before discovery.¹¹ Plaintiffs’ firms credit the ruling with clearing a path to discovery in the new voluntary benefits suits and other prohibited-transaction cases.

Anderson v. Intel

On January 16, 2026, the Court granted certiorari in Anderson v. Intel Corporation Investment Policy Committee. The question is whether a plaintiff alleging a fiduciary breached the duty of prudence by keeping underperforming funds must identify a “meaningful benchmark” — a comparator fund with similar objectives and risk — at the pleading stage. The Ninth Circuit imposed that requirement; other circuits have not.¹² Respondents’ brief is due July 2, 2026, with oral argument expected in the fall.¹³ The ruling will directly affect the 20 target-date fund suits filed in early 2026.¹⁴

M & K Employee Solutions v. IAM National Pension Fund

On May 21, 2026, a unanimous Court in M & K Employee Solutions, LLC v. Trustees of the IAM National Pension Fund resolved how multiemployer pension plans calculate withdrawal liability. Justice Jackson wrote that ERISA does not require actuarial assumptions to be locked in before the statutory measurement date.¹⁵ The employers had challenged the fund’s actuary for switching to a lower discount rate after the measurement date, which increased their bill. The Court held assumptions are predictive judgments, not fixed data points, and that forcing selection before the measurement date could tie actuaries to stale information.¹⁶ The decision resolved a split between the D.C. Circuit and the Second Circuit; assumptions must still be reasonable and reflect the actuary’s best estimate.

Fourth Circuit Unsettles 401(k) Class Certification

A Fourth Circuit panel issued a ruling on March 10, 2026, in Trauernicht v. Genworth Financial Inc. that could reshape how 401(k) fiduciary breach cases are brought. The court reversed class certification, holding that claims for monetary relief under ERISA Section 502(a)(2) in a defined contribution plan are “individualized monetary claims” that cannot be certified as a mandatory class under Rule 23(b)(1).¹⁷ Because participants in a 401(k) plan hold individual accounts, a fiduciary breach may affect them differently based on when they invested and withdrew, and some class members may have suffered no loss or even gained.¹⁸

If the ruling stands, Fourth Circuit plaintiffs would need to meet Rule 23(b)(3), including showing common questions predominate. On April 14, 2026, the plaintiffs petitioned for rehearing en banc, backed by an amicus brief from employee benefits law professors arguing the panel conflicts with Supreme Court precedent and could push identical allegations into hundreds of individual suits. The Fourth Circuit ordered Genworth to respond by April 27, 2026.¹⁹

Sixth Circuit Opens the Door on Outdated Mortality Tables

A niche but expensive category of litigation alleges pension plans underpay retirees by calculating joint-and-survivor and early-retirement annuities using mortality tables from as far back as the 1960s and 1970s. Because people live longer than those old tables assumed, plaintiffs argue, the resulting benefit reductions are too large.

On March 16, 2026, the Sixth Circuit became the first federal appeals court to weigh in. In a 2-1 ruling in Reichert v. Kellogg, the court reversed dismissals and held that ERISA’s “actuarial equivalence” requirement prohibits unreasonably outdated mortality assumptions. The majority read “actuarial equivalence” as a technical term that inherently requires reasonable, current inputs. The dissent argued Congress did not write a reasonableness requirement into the statute and the court should not read one in.²⁰ Four days later, on March 20, 2026, the Eastern District of Missouri dismissed a similar case with prejudice, holding ERISA’s plain language does not mandate periodic updates. The Eleventh Circuit is reviewing a related case.²¹

Pension Risk Transfer and the DOL’s New Posture

Since early 2024, 13 class actions have challenged employers that offloaded pension obligations to insurance companies through pension risk transfer transactions, typically alleging the employer picked an annuity provider less safe than alternatives. Four have been dismissed, two survived motions to dismiss, and four remained pending as of early 2026.³

The first to reach a federal appeals court is Konya v. Lockheed Martin in the Fourth Circuit. On January 9, 2026, the Department of Labor filed an amicus brief supporting Lockheed Martin and urging reversal of a lower court decision that let the case proceed. The DOL argued plaintiffs lack standing because they continue to receive full benefit payments and no default is imminent.²² The department also called the decision to enter a pension risk transfer a settlor function, not a fiduciary act, and noted that no annuity selected in such a transaction has defaulted in three decades.²³

That brief is part of a wider shift. The DOL has also filed briefs supporting employers in forfeiture cases, signaling a move to defend the employer-sponsored benefit system against what the department characterizes as overreach by private plaintiffs.³

DOL Enforcement and Regulatory Changes

In April 2026, the Employee Benefits Security Administration issued Field Assistance Bulletin 2026-01 setting new enforcement principles. It prioritizes criminal cases and civil investigations involving clear breaches of loyalty or asset misappropriation, and directs staff to “avoid cases that unfairly second-guess process-based fiduciary judgments.” The bulletin also bars EBSA from using enforcement to introduce novel legal theories without senior leadership approval and requires the agency to eliminate any appearance of coordination with private plaintiffs’ attorneys, an issue the DOL Inspector General is investigating.²⁴

EBSA refreshed its enforcement priorities in January 2026. Cybersecurity became an official priority for the first time, ESOP enforcement was removed from the national project list, and the agency signaled it would de-emphasize missing-participant cases. EBSA head Daniel Aronowitz said the agency “will no longer make plan sponsors spend more than account balances in futile, repeated searches for missing participants.” DOL recoveries have trended down, from $844.7 million in fiscal year 2023 to $714.4 million in fiscal year 2025.²⁵

On March 31, 2026, the DOL published a proposed rule creating a safe harbor for fiduciaries who include alternative assets — private equity, real estate, digital assets, and similar investments — in 401(k) menus. The proposal implements Executive Order 14330, “Democratizing Access to Alternative Assets for 401(k) Investors.”²⁶ Fiduciaries who follow a process evaluating six factors (performance, fees, liquidity, valuation, benchmarks, and complexity) would receive a “presumption of prudence.” The comment period closed June 1, 2026.²⁷

The Bill That Would Rewrite the Pleading Rules

Representative Randy Fine of Florida introduced the ERISA Litigation Reform Act (H.R. 6084) in November 2025. The bill would override Cunningham v. Cornell by raising the pleading standard for prohibited-transaction claims involving allegedly excessive compensation, and it would stay discovery while early motions to dismiss are pending.²⁸ The House Committee on Education and Workforce, chaired by Representative Tim Walberg, held a hearing in December 2025 titled “Pension Predators: Stopping Class Action Abuse Against Workers’ Retirement” and voted to report the bill out of committee on March 17, 2026. It has not yet been scheduled for a floor vote.²⁹

Health Plan Litigation Beyond Tobacco

Health plan cases are branching into new areas. In Navarro v. Wells Fargo, plaintiffs alleged the company breached fiduciary duties by failing to ensure reasonable prescription drug prices, leading to higher premiums and out-of-pocket costs. On March 3, 2026, the District of Minnesota dismissed the case with prejudice, finding the injury claims “too speculative to confer standing” because Wells Fargo had sole discretion to set contribution rates and those rates could be influenced by factors unrelated to drug pricing.³⁰ Plaintiffs appealed to the Eighth Circuit on April 1, 2026, with their opening brief due June 25, 2026.³¹

ERISA preemption also continues to close off state-law alternatives. In November 2025, the Ninth Circuit reaffirmed a broad reading of preemption in Dedicato Treatment Center v. Aetna, holding that state-law contract and quasi-contract claims arising from preservice verification-of-benefits communications are preempted by ERISA’s remedial scheme. The court rejected the argument that providers can use state-law theories as an alternative route to payment for services covered by an ERISA-governed plan.³²

1
Bloomberg Law. ERISA Class Actions Soar in 2026 as New Legal Theories Emerge
2
401k Specialist. 155 ERISA Fiduciary Lawsuits Filed in 2025 as Litigation Broadens
3
Encore Fiduciary. ERISA Fiduciary Litigation in 2025
4
Nixon Peabody. Employer-Favorable Trend Emerges From Tobacco Cessation Class Actions
5
Gibson Dunn. Quarterly ERISA Litigation Update
6
Ropes Gray. Voluntary Benefits Under Scrutiny
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DLA Piper. Voluntary Benefit Plans Face Increased ERISA Fiduciary Scrutiny
8
Miller Chevalier. Voluntary Benefits Challenged in New ERISA Class Actions
9
Mayer Brown. The Evolution of Defined Contribution Plan Class Action Litigation in 2025
10
Gibson Dunn. Update on ERISA 401(k) Plan Forfeiture Litigation
11
U.S. Supreme Court. Cunningham v. Cornell University, No. 23-1007
12
Sidley Austin. Anderson v. Intel: US Supreme Court Grants Certiorari
13
U.S. Supreme Court. Docket No. 25-498
14
SCOTUSblog. Anderson v. Intel Corp. Investment Policy Comm.
15
U.S. Supreme Court. M & K Employee Solutions v. Trustees of the IAM National Pension Fund, No. 23-1209
16
Oyez. M & K Employee Solutions v. Trustees of the IAM National Pension Fund
17
U.S. Court of Appeals for the Fourth Circuit. Trauernicht v. Genworth Financial Inc., No. 24-1880
18
Inside Class Actions. One Plan, Many Accounts: Fourth Circuit Slams the Door on Mandatory ERISA Classes
19
PlanAdviser. Genworth 401(k) Class Action Suit May Head to Rehearing
20
U.S. Court of Appeals for the Sixth Circuit. Reichert v. Kellogg, No. 24-1442
21
Husch Blackwell. Sixth Circuit, Missouri District Court Differ as to Whether ERISA Requires Updated Mortality Tables
22
U.S. Department of Labor. Secretary of Labor Files Amicus Brief in Konya v. Lockheed Martin
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U.S. Department of Labor. Amicus Brief of the Secretary of Labor, Konya v. Lockheed Martin
24
U.S. Department of Labor. Field Assistance Bulletin No. 2026-01
25
Morgan Lewis. US Department of Labor ERISA Enforcement: Spring 2026 Updates
26
Federal Register. Fiduciary Duties in Selecting Designated Investment Alternatives
27
U.S. Department of Labor. Fact Sheet: Fiduciary Duties in Selecting Designated Investment Alternatives
28
Rep. Tim Walberg. ERISA Litigation Reform Act Heads to House Committee Markup
29
GovTrack. H.R. 6084: ERISA Litigation Reform Act
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Goodwin Procter. ERISA Litigation Update: Q1 2026
31
Georgetown Law Litigation Tracker. Navarro et al. v. Wells Fargo & Company
32
Troutman Pepper. 9th Circ. Clarifies ERISA Preemption for Healthcare Industry