A federal appeals court in Philadelphia has upheld a lower court's granting of class-action status in an ERISA complaint against Universal Health Services Inc., becoming the first appeals court to rule on a defined contribution sponsor's use of a U.S. Supreme Court decision about a defined benefit plan as a DC plan defense.
The June 1 unanimous ruling by the 3rd U.S. Circuit Court of Appeals in Boley et al. vs. Universal Health Services Inc. et al., added to DC defendants' losing streak in seeking to dismiss ERISA lawsuits based on the Supreme Court's 5-4 decision in Thole et al. vs. U.S. Bank NA et al. in July 2020.
The Supreme Court ruled that DB plan participants, in an overfunded plan, lacked standing to sue because they weren't harmed financially. The court also noted there is a difference between a DC plan and a DB plan.
Federal courts in multiple jurisdictions have cited the Supreme Court's DB vs. DC distinction in rejecting bids by sponsors to have ERISA complaints dismissed for participants' alleged lack of standing to sue.