Court OKs Causation as Affirmative Defense In Lincoln National ERISA Stock-Drop Case

In a decision that could provide an added weapon to the defense arsenal in employer stock-drop cases, the U.S. District Court for the Eastern District of Pennsylvania held Feb. 10 that Lincoln National Corp. can use causation as an affirmative defense in its bid to prove it is not liable for the investment losses of employees who invested their retirement savings in company stock (Dann v. Lincoln Nat’l Corp.).

In many Employee Retirement Income Security Act lawsuits involving defined contribution plans such as 401(k) plans, defendants frequently cite ERISA Section 404(c)‘s safe harbor provision as an ...