Court Again Rejects ERISA Claims Against J&J Alleging Mismanagement of Pharmacy Benefits

On November 26, 2026, in the closely watched case Lewandowski v. Johnson and Johnson, No. 24-671 (D.N.J.), the district court again dismissed on standing grounds putative class claims against Johnson & Johnson and its benefits committee (collectively, J&J). The claims allege the defendants breached their ERISA fiduciary duties and mismanaged the prescription drug programs in the company's health plans, costing the plans and their employees millions of dollars in the form of higher payments for prescription drugs, higher premiums, higher out-of-pocket costs, higher deductibles, higher co-insurance, and higher co-pays. This dismissal of the plaintiffs' Second Amended Complaint (SAC) follows the dismissal of their Amended Complaint, also on standing grounds, in January 2025. 

Like the plaintiffs' initial pleadings, the SAC contained allegations that the defendants were imprudent and disloyal by agreeing to pay inflated prices for certain generic and specialty drugs and by failing to use their bargaining power to negotiate lower prices and more advantageous pharmacy benefit manager (PBM) contract terms. The SAC further alleged that employee premiums increased when the plan overspent on prescription drugs and that the plaintiffs themselves paid more out-of-pocket for drugs under the plan due to the alleged fiduciary mismanagement. In the motion to dismiss, J&J asserted that setting premiums is a settlor activity that cannot give rise to ERISA fiduciary breach claims and that the plaintiffs' alleged economic harms continued to be speculative.

The court agreed with J&J, holding that the amended allegations in the SAC were not enough to cure the plaintiffs' failure to allege injuries that were sufficiently concrete and non-speculative and that could be redressed though the litigation. 

Relying heavily on the District of Minnesota's decision in Navarro v. Wells Fargo & Co., No. 24-3043 (D. Minn. Mar. 24, 2025) and the Third Circuit's decision in Knudsen v. MetLife Group, Inc., 117 F.4th 570 (3d Cir. 2024), the court found that the connection between what plan participants were required to pay in contributions and out-of-pocket costs and the fees the plans were required to pay the PBM was too tenuous. The court cited to J&J's discretion in setting participant contribution rates, which it stated can be influenced by multiple factors unrelated to amounts paid in connection with the prescription drug benefits. Quoting Navarro, the court concluded, "There are simply too many variables in how Plan participants' contribution rates are calculated to make the inferential leap necessary to elevate Plaintiffs' allegations from merely speculative to plausible." 

J&J's discretion in setting participant contribution rates also prevented the plaintiffs from meeting their pleading burden on the issue of redressability. The court, citing Navarro, reasoned that even if the plaintiffs prevailed in the case, J&J could still increase contribution rates without violating ERISA.

The court's dismissal is without prejudice, giving the plaintiffs another opportunity to amend their complaint to attempt to cure their pleading deficiencies on standing. 

Supreme Court ERISA Case Fully Briefed, to Be Argued January 2026

As of November 13, 2025, M & K Employee Solutions, LLC v. Trustees of the IAM National Pension Fund, No. 23-1209, a pension withdrawal liability and actuarial assumptions case, has been fully briefed on the merits and is pending oral argument before the Supreme Court on January 20, 2026. This case is significant as it's the only ERISA case set to be heard by the Supreme Court this term to date. 

The petition for a writ of certiorari was filed by M & K Employee Solutions, LLC, Phillips Liquidating Trust, Ohio Magnetics, Inc., and Toyota Logistics, Inc. (the petitioners), employers who participated in a multiemployer pension plan covering employees in the International Association of Machinists and Aerospace Workers union. The respondent is the IAM National Pension Fund. The Supreme Court granted certiorari on the limited question of: "Whether 29 U.S.C. § 1391's instruction to compute withdrawal liability 'as of the end of the plan year' requires the plan to base the computation on the actuarial assumptions most recently adopted before the end of the year, or allows the plan to use different actuarial assumptions that were adopted after, but based on information available as of, the end of the year."

The petitioners allege that the Fund's actuarial assumptions used to determine employer liability were flawed because the assumptions were improperly revised using rates post-dating the Fund's "measurement date," i.e., after petitioners had already withdrawn from the Fund, thereby increasing the Fund's estimated underfunding and its pension withdrawal liability. The case was originally arbitrated with decisions in favor of the petitioners. Thereafter, the U.S. District Court for the District of Columbia vacated the awards, citing the arbitrator's error in following the Second Circuit's decision in National Retirement Fund v. Metz Culinary Mgmt., Inc., 946 F.3d 146 (2d Cir.), cert. denied, 141 S. Ct. 246 (2020), which held that actuaries must calculate withdrawal liability using the actuarial assumptions that they endorsed as of the measurement date. The DC Circuit affirmed the district court decision, agreeing that Metz is non-controlling on this issue and contrary to the Multiemployer Pension Plan Amendments Act (MPPAA), which amended ERISA to create the pension withdrawal liability rules at issue in this case. 

As previously discussed, multiple petitions for certiorari are pending before the Supreme Court on ERISA issues, including two cases in which the Supreme Court has requested the views of the U.S. Solicitor General, Parker-Hannifin Corp. v. Johnson, No. 24-1030, and Pizzaro v. The Home Depot, Inc., No. 24-620. The Solicitor General has not yet submitted briefs in these cases. 

DOL Drops Appeal in ERISA Fiduciary Rule Challenge

On December 1, 2025, the U.S. Court of Appeals for the Fifth Circuit granted the Department of Justice's (DOJ) November 24, 2025, Unopposed Motion to Voluntarily Dismiss Consolidated Appeals in Federation of Americans for Consumer Choice, Inc. v. U.S. Department of Labor, No. 24-40637, and American Council of Life Insurers v. U.S. Department of Labor, No. 24-10890. The DOJ's consolidated appeals relate to two lawsuits filed against the Department of Labor (DOL) in federal court in Texas that challenged the DOL's April 25, 2024, fiduciary rule (2024 Rule), which amended the regulatory interpretation of the definition of an investment advice fiduciary under ERISA and related prohibited transaction exemptions, under the Administrative Procedure Act (APA). Federation of Americans for Consumer Choice, Inc., et al., v. U.S. Department of Labor, No. 6:24-cv-00163 (E.D. Tex. 2024) and American Council of Life Insures, et al., v. U.S. Department of Labor, No. 4:24-cv-00482 (N.D. Tex. 2024). In both cases, district courts stayed the effective date of the 2024 Rule. In addition, at the request of the DOJ, the consolidated appeals were stayed following the change of administration earlier this year. The position taken by the DOJ here likely means the current administration is completely abandoning the Biden-era fiduciary rule.

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