Insights
Kent Mason Featured in PlanSponsor Article Discussing Appeals Court Ruling’s Impact on ERISA Class Actions
- Published Date: March 17, 2026
On March 17, 2026, PlanSponsor published an article titled, “Appeals Court Ruling Upends Path for ERISA Class Actions,” where Davis & Harman Partner, Kent Mason, was quoted describing the decision’s impact on investment performance lawsuits.
Last week, the U.S. Court of Appeals for the Fourth Circuit issued an opinion in Trauernicht v. Genworth Financial Inc. overturning a district court order certifying a class of Genworth’s 401(k) plan participants who had invested in a series of target-date funds that allegedly underperformed. The Fourth Circuit held that fiduciary breach claims under ERISA section 502(a)(2) regarding defined contribution plans involve individualized monetary losses, not a single shared injury. Therefore, such claims cannot advance as mandatory class actions under the Federal Rules of Civil Procedure’s Rule 23(b)(1)—instead, class action claims for individualized monetary damages must be brought under Rule 23(b)(3), a more cumbersome provision.
Even more significantly, the Fourth Circuit held that this type of ERISA underperformance suit does not inherently satisfy the Federal Rule’s requirement that there be questions of law and fact that are common to the class because the class members have not suffered the same injury.
The decision has already impacted a district court’s class certification in another ERISA lawsuit within the Fourth Circuit, which was vacated citing Trauernicht as precedent.
Mason is quoted describing the opinion “as potentially transformative for a wave of investment performance lawsuits targeting target-date funds.” Rather than relying on the assumption that ERISA fiduciary breach claims automatically satisfy the common injury requirement for class action certification, “Trauernicht means judges must examine whether investors experienced the same harm—something that may vary widely, depending on when and for how long they held a specific investment. Participants who invested during different periods could have very different outcomes . . . . If courts adopt that reasoning broadly, . . . the analysis could dramatically shrink the size of potential classes in investment performance cases—or eliminate classes altogether.”
A link to the article can be found here.
