Eleventh Circuit Asked to Revisit Exhaustion Requirement for ERISA Fiduciary Claims

On November 5, 2025, the plaintiffs-appellants in Bolton, et al., v. Inland Fresh Seafood Corp. of America, Inc., No. 24-10084 (11th Cir. 2025), filed a petition for rehearing en banc, asking the U.S. Court of Appeals for the Eleventh Circuit to reconsider the October 15, 2025, three-judge panel decision affirming dismissal of their ERISA breach of fiduciary duty and prohibited transaction claims due to a failure to exhaust administrative remedies. Specifically, the plaintiffs-appellants ask the court to overrule Mason v. Continental Group, 763 F.2d 1219, 1227 (11th Cir. 1985), which they assert serves as the basis for the Eleventh Circuit's "judicially created and atextual administrative exhaustion requirement for fiduciary breach and statutory claims under ERISA, 29 U.S.C. §§ 1109(a), 1132(a)(2)–(3)." Relying on the October 15 concurrence written by Circuit Judge Adalberto Jordan and joined by Circuit Judge William H. Pryor, Jr., the plaintiffs-appellants state that the administrative exhaustion requirement should be eliminated within the Eleventh Circuit to ensure continuity among the circuits. 

In their petition, the plaintiffs-appellants focus on several issues with Mason identified in the concurrence. They say that the Eleventh Circuit was incorrect in Mason, "which cited ERISA § 503, 29 U.S.C. § 1133, as evidence that imposing an exhaustion requirement on fiduciary breach claims appear[ed] to be consistent with the intent of Congress." The plaintiffs-appellants contend that the administrative requirement under § 503 relied on in Mason does not apply to "statutory claims," and instead "is limited to a specific class of ERISA claims—those brought by a participant whose claim for benefits has been denied." According to the petition, "[t]he fact that Congress chose to limit internal review requirement to a specific type of claim (§ 1132(a)(1)(B) denial-of-benefits), is strong evidence that it did not intend to require such procedures for other types of claims, like the fiduciary breach claims here under § 1132(a)(2)."

The petition also states that the reasons cited by Mason for requiring pre-suit exhaustion are not appropriate for statutory claims. Among other things, the plaintiffs-appellants argue that a determination of whether conduct violates ERISA is an issue within the expertise of the courts, not a plan administrator. Further, they assert that because ERISA holds breaching fiduciaries personally liable for damages, "any assessment of the claimed statutory violation may be affected by the fiduciary's self-interest." They also say that while an administrative exhaustion requirement may minimize costs of resolving benefits disputes, "requiring exhaustion of statutory claims is likely to waste resources."

The plaintiffs-appellants assert that en banc review should be granted because it "will [] further ERISA's goals of establishing a uniform regulatory regime over employee benefit plans." They point out that "a total of seven other circuits have rejected an exhaustion requirement for fiduciary breach and statutory claims under ERISA" and argue that if the case had of been brought in "virtually any other circuit, Plaintiffs would have been permitted to proceed on the merits." 

ESG Bill Introduced in the Senate 

On October 30, 2025, Senator Bill Cassidy (R-LA), Chairman of the Senate Committee on Health, Education, Labor and Pensions (HELP), introduced S. 3086, the Restoring Integrity in Fiduciary Duty Act. This bill amends section 404 of ERISA, 29 U.S.C. § 1104, "to clarify the criteria by which a fiduciary may evaluate and select investments based on nonpecuniary factors, and to clarify the application of prudence and exclusive purpose duties to the exercise of shareholder rights." A version of this bill was introduced and referred to the HELP Committee in 2024 but did not proceed to the full Senate. 

First, the bill seeks to eliminate the use of environment, social, and governance (ESG) considerations by ERISA fiduciaries in evaluating and selecting plan investments. According to the legislative text, a fiduciary "(i) may evaluate an investment or investment course of action based only on pecuniary factors [subject to an capita aut navia (heads or tails) exception]; (ii) may not subordinate the interests of the participants and beneficiaries in their retirement income or financial benefits under the plan to other objectives; (iii) may not sacrifice investment return or take on additional investment risk to promote nonpecuniary benefits or goals; and (iv) shall weight each pecuniary factor in a manner that appropriately reflects a prudent assessment of the impact of the factor on risk and return." However, if a fiduciary is unable to distinguish between or among investment alternatives on the basis of pecuniary factors alone, a capita aut navia standard applies. 

The bill defines the capita aut navia standard as one "by which a fiduciary chooses at random between or among investment alternatives where pecuniary factors are equal and does not give added weight to [one] investment or another, provided that the investment alternatives have identical risk and return attributes and choosing among the investment alternatives would have comparatively negligible impact, not considering liquidity constraints or transaction costs." If the capita aut navia standard is invoked, the bill requires the ERISA fiduciary to document their decision-making in certain ways. 

The bill also amends ERISA section 404 to add a new subsection addressing the exercise of shareholder rights by plan fiduciaries. The bill's text expressly states that the fiduciary duties governing the management of plan assets that are shares of stock apply to the management of the shareholder rights appurtenant to share of stock, including the right to vote proxies. The bill notes, though, that this fiduciary duty "does not require the voting of every proxy or the exercise of every shareholder right" and "does not apply to voting, tender, and similar rights with respect to securities that are passed through pursuant to the terms of an individual account plan to participants and beneficiaries with accounts holding such securities." Further, the bill provides that, when exercising shareholder rights, an ERISA fiduciary must: "(i) act solely in accordance with the economic interest of the plan and its participants and beneficiaries; (ii) consider any costs involved; (iii) evaluate material facts that form the basis for any particular proxy vote or exercise of shareholder rights; and (iv) maintain a record of any proxy vote, proxy voting activity, or other exercise of a shareholder right, including any attempt to influence management." This provision of the bill also incorporates ESG-related prescriptions, stating that an ERISA fiduciary "shall not subordinate the interests of participants and beneficiaries in their retirement income or financial benefits under the plan to any nonpecuniary objective, or promote nonpecuniary benefits or goals unrelated to those financial interests of the plan's participants and beneficiaries." The bill imposes a duty of prudence and diligence in the selection and monitoring of any person selected to advise or assist with the exercise of shareholder rights to include those "providing research and analysis, recommendations on exercise of proxy voting or other shareholder rights, administrative services with respect to voting proxies, and recordkeeping and reporting services," as well as the duty of prudent monitoring of the proxy voting activities of any investment manager or advisory firm. Additionally, the bill sets forth proxy voting policies. 

This bill follows a May 2025 announcement from the Department of Justice (DOJ) stating that the Trump administration is reconsidering the Biden-era ESG rule, "Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights" (ESG Rule), which was upheld by a federal court in February 2025. The Department of Labor (DOL) included the ESG Rule in its Spring 2025 regulatory agenda as part of the administration's deregulatory initiative. 

In the News

Joanne and Elizabeth examine the implications of the U.S. Court of Appeals for the Eleventh Circuit's en banc decision in Lange v. Houston County, Georgia in Law360.

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