Langbecker v. EDS Update: Fifth Circuit Decides that EDS is AOK

The recent 5th circuit ruling vacating class certification is a big win for EDS and imposes significant obstacles for the plaintiffs on remand. The 57 page decision can be boiled down to the following:

1. ERISA plan fiduciaries do have plan wide responsibilities for 401(k) plans. So participants can sue on behalf of the entire plan under 502(a)(2) for plan wide relief even if the damages are ultimately allocated on an individualized basis.
   
   
2. BUT, section 404(c) applies as well. ERISA 404(c) immunizes a 401(k) plan fiduciary for any losses caused by a breach if the loss results from the participant's exercise of control.
   
   
3. 404(c) applies even though a fiduciary selected an investment for the plan, or chose to keep the investment as an option. Participants still have control over their own investments, even if the menu is limited by the fiduciary.
   
   
4. The Fifth Circuit is very skeptical that the case is appropriate for class status because of the 404(c) defense, which would appear to apply on an participant by participant basis, as well as damage issues, which depend upon each participant's particular set of investment decisions.