Defined Benefit Plan Participant’s Action Mooted by ERISA Plan’s Improved Financial Condition
A federal district court in Minnesota dismissed a plan participant’s allegations that plan fiduciaries mismanaged a defined benefit plan — and thus caused it to be underfunded — because the plan’s financial condition improved during the course of the litigation. As reported here, the court previously held that these allegations were sufficient to establish that plaintiffs suffered an injury in fact sufficient to confer Article III standing. In its most recent opinion, the court held that plaintiffs’ claims were now moot because the plan had become overfunded. As a result, “any money that could be awarded would simply add to the Plan’s now-existing surplus, in which Plaintiffs have no legal interest.” The court also held that “to the extent that the Plan becomes underfunded again in the future, raising anew concerns about the security of Plan participants’ future stream of benefits, the causal connection between the new increased risk of default and the Defendants’ alleged violations in 2007 through 2010 would be tenuous at best.” The case is Adedipe v. U.S. Bank, N.A., No. 13-2687, slip op. (D. Minn. Dec. 29, 2015).