As Summer Turns to Fall: The Evolution of ERISA Forfeiture Cases

In July and August, we published two Legal Updates describing the evolving state of the law with respect to the ongoing wave of ERISA forfeiture lawsuits. Because we are continuing to see material developments in these lawsuits, this Legal Update describes the current state of the ERISA forfeiture lawsuit landscape as we enter the fourth quarter of 2025.

The primary takeaway for plan sponsors is that, while motions to dismiss are still pending in dozens of cases, the growing majority of courts that have ruled on motions to dismiss have ruled in favor of plan sponsors. As shown in the table below, district courts have now ruled on motions to dismiss in 24 forfeiture lawsuits, and granted the motions to dismiss in 18 of them (a 75 percent win-rate for plan sponsors). These dismissals have resulted in a growing number of appeals, with eight appeals now pending in four US Courts of Appeals. On top of all of this, the plaintiffs’ bar continues to file new forfeiture lawsuits, including six in September, for a total of 75 forfeiture lawsuits filed since September 2023. In a nutshell, plan sponsors should continue to monitor this ever-evolving legal landscape regarding ERISA plan forfeitures.

Motion to Dismiss Rulings

Since our most recent Legal Update, three more district courts have ruled on motions to dismiss, with all three granting the motions: Dimou v. Thermo Fisher (S.D. Cal., Sept. 9); Armenta v. Willscot Mobile Mini Holdings (D. Ariz., Sept. 15); and Estay v. Ochsner Clinic Found. (E.D. La., Sept. 15). In total, 16 federal district courts in 14 different states have now ruled on motions to dismiss in 24 forfeiture cases. These district courts collectively have granted motions to dismiss in 18 cases and denied motions to dismiss in six cases. The table below lists the 24 motion to dismiss rulings by their respective US Court of Appeals. The three new rulings are bolded.          

Summary of Recent Rulings Granting Motions to Dismiss

First, in Dimou v. Thermo Fisher, the district court dismissed the lawsuit with prejudice after previously dismissing the lawsuit without prejudice in September 2024. The court emphasized that the plaintiffs had “received all the benefits they were due under the terms of the Plan” and nothing in ERISA “require[d] the administrator to allocate forfeitures to cover the cost of expenses in every circumstance.” The court also emphasized that the plaintiff’s per se theory that ERISA’s duty of prudence always requires using forfeitures to pay for the plan’s administrative expenses before applying them to contributions “flies in the face of decades of ERISA practice.” Finally, the court for a second time held that Thermo Fisher’s allocation of forfeitures to contributions was not a “transaction” implicating ERISA’s prohibited transaction rules. In so doing, the court rejected the plaintiff’s argument – one that plaintiffs have raised in a growing number of forfeiture cases – that ERISA § 406(b) does not require a “transaction.”

In Armenta v. WillScot Mobile Mini Holdings Corp., the district court applied similar reasoning as the Dimou court in dismissing the plaintiff’s duty of prudence, duty of loyalty, and prohibited transaction claims. In addition, the court dismissed the plaintiff’s failure to follow the plan document claim under ERISA § 404(a)(1)(D). The court held that the plaintiff’s claim that the plan required WillScot to first allocate forfeitures to the plan’s administrative expenses was contrary to the plan’s actual language, which, by including the word “may,” provided WillScot “the discretion of reallocating forfeitures to either administrative expenses or contributions.”

Finally, in Estay v. Ochsner Clinic Foundation ‒ the first motion to dismiss ruling in the Fifth Circuit ‒ the district court followed the reasoning of the majority of district courts dismissing forfeiture lawsuits, emphasizing that the plaintiffs had not “pointed to any way in which the facts or their claim present unique or special circumstances.” While the court recognized that a small number of district courts had allowed similar forfeiture claims to proceed to discovery, it found that, to extent the cases were not distinguishable, “the analyses of the majority of courts considering the [forfeiture] issue [were] more compelling.”     

Pending Forfeiture Appeals

As shown in the table below, there are eight forfeiture lawsuits currently on appeal in four US Courts of Appeals: the Third Circuit (two cases); Eighth Circuit (one case); Ninth Circuit (four cases); and Eleventh Circuit (one case). Although oral argument has not yet been scheduled, the HP, Inc. appeal in the Ninth Circuit continues to progress ahead of the other appeals, with briefing completed in early August. Unless a different circuit court quickly schedules oral argument after briefing is completed in one of the other appeals, we anticipate the first appellate court ruling will be in the HP, Inc. case.

We are also waiting to see if the US Department of Labor will follow its amicus brief in HP, Inc. with additional amicus briefs in the other pending appeals. For more details on DOL’s amicus brief in HP, Inc., please see our initial July Legal Update.

Forfeiture Lawsuit Settlements

Although the first forfeiture lawsuits were filed more than two years ago, we are now starting to see more class action settlements. By our count, there have been four announced settlements in ERISA class actions with forfeiture claims, with reported settlement amounts in two of them: Rodriguez v. Intuit (N.D. Cal.) ($1.995 million) (forfeiture claims only)⁴ and Kiskeravage v. Lehigh Valley Health Network (E.D. Pa.) ($1.15 million) (forfeiture and other ERISA fiduciary breach claims). The settlement amounts in the two other cases will be disclosed when the plaintiffs file their respective motions for preliminary approval of the class settlements.

Where Do Things Go From Here?

While it may be cold comfort to the dozens of plan sponsors that have been targeted in these forfeiture lawsuits, it is good to see that many district courts, upon close review of the plaintiffs’ forfeiture claims, have correctly dismissed them. We hope the many other district courts with pending motions to dismiss will do the same. We are also closely watching the Courts of Appeals, as their decisions will likely materially impact the volume and viability of these forfeiture lawsuits going forward. We also remain on the lookout for additional DOL amicus briefs and potential DOL guidance to plan sponsors on the use of ERISA plan forfeitures. Given that plaintiffs have already filed 40 new forfeiture lawsuits so far in 2025, plan sponsors should continue to stay apprised of developments in this area, continue to review how they are using their plan forfeitures, and ensure the relevant terms in their plan documents are consistent with their actual practice.

¹ The district court dismissed two of the plaintiff’s fiduciary breach claims (duty of loyalty and failure to follow the plan document) and her prohibited transaction claims with prejudice. The district court dismissed the duty of prudence claim without prejudice.

² The district court dismissed the claims against the named Home Depot defendants (The Home Depot, Inc. and its 401(k) plan administrative committee) with prejudice. The court only granted plaintiff leave to amend with respect to the unnamed “Doe” defendants.

³ On August 26, 2025, Knight-Swift Transportation filed a joint notice of settlement in principle in a separate pending ERISA class action (Hagins v. Knight-Swift Transp., Case No. 2:22-cv-1835, Dkt. 76 (D. Ariz.)), stating that the parties had reached a class-wide settlement that would include the forfeiture claims in the Sievert matter currently on appeal in the Ninth Circuit. The parties intend to file a motion for preliminary approval of the class-wide settlement by October 24, 2025.

⁴ The class-wide settlement was announced on May 16, 2025. The district court granted preliminary approval of the settlement on July 15, 2025, and scheduled a fairness hearing for final approval of the settlement on November 13, 2025.