H.R. 6084: ERISA Litigation Reform Act

This bill, known as the ERISA Litigation Reform Act, proposes several changes to the Employee Retirement Income Security Act of 1974 (ERISA) to modify the legal process for claims related to pension and benefit plans. The main objectives of the bill are to adjust the standards for pleading certain claims and to impact how lawsuits involving fiduciaries of retirement plans can be conducted.

Pleading Standards

The bill introduces stricter requirements for how plaintiffs must present their claims regarding fiduciaries violating plan rules. Specifically, it outlines that:

• For claims alleging that a fiduciary caused a retirement plan to engage in prohibited transactions, the plaintiff must now plausibly demonstrate that the transaction is not exempt under certain existing ERISA provisions.
• Claims regarding the purchase or sale of employer securities will also require the plaintiff to prove that the transaction is not exempt from specific ERISA rules.

Discovery Process Modifications

The bill changes the discovery process in lawsuits involving retirement plans:

• All discovery proceedings will be halted while a party awaits a decision on motions that could dismiss the case or narrow its scope.
• Parties involved in the lawsuit with knowledge of the allegations must treat relevant documents in their possession as if they are subject to ongoing requests for production, until the court decides otherwise.
• If a party fails to comply with these document preservation obligations, the aggrieved party may seek sanctions from the court.
• The court can also stay discovery in state court cases when necessary to assist its jurisdiction or protect its decisions.

Overall, the ERISA Litigation Reform Act seeks to change how legal claims are made and processed regarding retirement and pension plans, emphasizing clarity in the initial claims and limiting certain aspects of the discovery phase in relevant legal actions.

Relevant Companies

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