‘Mega-Class’ Suit Threat in 5th Cir. Alarms Benefits Providers

Companies providing administrative services to workplace benefit plans fear a federal appeals court in Louisiana may soon greenlight “mega-class” lawsuits that leave them vulnerable to possible civil litigation from nearly all their clients.

The US Court of Appeals for the Fifth Circuit heard oral arguments last week in a case brought under the Employee Retirement Income Security Act that would certify a class of nearly 300,000 workers in 3,300 different plans that use Texas-based Fringe Benefit Services Inc. as their plan provider.

Multi-plan ERISA cases that involve thousands of individual plan participants are an alluring new target for plaintiffs attorneys ...