In an unusual decision, a federal judge last month refused to strike a plaintiff class’ demand for a jury trial in an ERISA 401(k) class action.
In Garthwait v. Eversource Energy Co., a class of former and current participants in the Eversource 401(k) Plan (the Plan) filed an action against Eversource Energy Company and Plan fiduciaries seeking to recover plan losses caused by alleged breaches of fiduciary duty, and requesting other equitable or remedial relief.
The defendants filed a Motion to Strike Plaintiffs' Jury Demand (Motion), arguing that neither ERISA nor the Seventh Amendment provide a right to a jury trial for fiduciary breach claims, which are equitable in nature. The plaintiffs argued in opposition that the relief sought is legal rather than equitable because it demands compensation from the defendants' general assets. Claims seeking equitable remedies typically require a bench trial, whereas claims seeking legal remedies may be tried by jury.
Judge Janet C. Hall of the U.S. District Court for the District of Connecticut, granted the Motion in part and denied it in part, finding that the plaintiffs’ demand for Eversource to “make good” any losses caused by the alleged breach constituted a legal, rather than equitable, remedy and therefore could be submitted to a jury. However, the claims for equitable or remedial relief will be decided by the judge.
Although the opinion noted the Second Circuit is split on whether jury demands should be granted in “make good” claims such as these, Judge Hall ultimately found precedent supported that the remedy sought in such claims was legal and thus refused to strike the jury demand for those counts.
Judge Hall’s decision is a rare victory for plaintiffs seeking jury trials in ERISA fiduciary breach cases, as most jury demands are stricken. ERISA litigators will be closely watching this issue play out in other cases, as the Eversource Energy decision will certainly be cited by plaintiffs in other 401(k) class actions.
The case name is Garthwait v. Eversource Energy Co., No. 3:20-CV-00902 (JCH), 2022 BL 437310, 2022 U.S. Dist. LEXIS 220309, 2022 WL 17484817 (D. Conn. Dec. 07, 2022).