Plan’s Improved Financial Condition Leads to Dismissal of Fiduciary Breach Lawsuit

Recently, a federal district court in Minnesota dismissed plan participants’ fiduciary breach lawsuit against plan fiduciaries when during the course of litigation the plan’s financial condition improved. The participants argued that the plan fiduciaries mismanaged the defined benefits plan causing it to become underfunded. However, while litigating the claims the plan became overfunded which, according to the court, meant that the plaintiffs’ claims were moot. The defendants’ alleged violations had occurred in 2007 through 2010 and the court believed that if the plan became underfunded again in the future, raising again the concerns about the security of the plan participants’ benefits, the connection to the defendant’s alleged violations in the current case would be “tenuous at best.”

Adedipe v. U.S. Bank, N.A., No. 13-2687, slip op. (D. Minn. Dec. 29, 2015)