Court Considers Right to Sue for Mishandled 401(k)
Three justices from the U.S. Supreme Court’s liberal wing appeared sympathetic today to arguments on behalf of a man who lost $150,000 in his 401(k) plan.
James LaRue claims he lost the money because administrators of his 401(k) retirement plan twice failed to follow his direction to move the money to safer investments.
Lawyers for LaRue argued the Employee Retirement Income Security Act allows his federal lawsuit. Justices Stephen G. Breyer, Ruth Bader Ginsburg and David H. Souter appeared sympathetic to that argument, the Associated Press reports.
Lawyers for administrators contend that recent rulings shielding lawyers from lawsuits involving health plans indicate that Congress would not have wanted a “torrent of litigation” over retirement plans, the ABA Journal reported in a November story.
The Richmond, Va.-based 4th U.S. Circuit Court of Appeals had ruled ERISA only permits lawsuits for damages to enforce the rights of a whole plan, rather than a single account holder, Bloomberg News reports.
The case is LaRue v. DeWolff.