Washington, D.C., April 18, 2025 – Today, Tom Christina, Executive Director of the ERIC Legal Center released the statement below in response to a decision issued Thursday by the U.S. Supreme Court. In Cunningham v. Cornell, the Court made it more cumbersome for courts to dismiss allegations that a benefit plan engaged in a “prohibited transaction” under the Employee Retirement Income Security Act. The decision is a change to pleading standards that could significantly increase litigation, creating new costs for employers and jeopardizing working families’ access to employer-sponsored benefits like health and retirement plans.
“In Cunningham vs. Cornell, the U.S. Supreme Court appears to acknowledge that its decision has the potential to open the floodgates for ultimately meritless litigation, but the Court also provided a number of off-ramps to federal courts to avoid such outcomes. As stakeholders continue to review the implications of the decision, courts should use these tools to hold plan sponsors harmless for transactions the law clearly permits. And noting its admission that the Court was constrained by the structure of the statute, Congress should take action to address the decision so that plan sponsors, workers, and retirees aren’t left to pay the price for what could well be a tsunami of frivolous litigation.”