In a major shift for pension and benefits litigation, the en banc U.S. Court of Appeals for the Eleventh Circuit has overturned four decades of precedent on ERISA statutory claims.
The ruling in *Bolton v. Inland Fresh Seafood Corp. of America, Inc.*, No. 24-10084, removes the requirement that plaintiffs exhaust internal administrative remedies before filing federal court claims.
The case arose when ESOP participants brought claims under ERISA Sections 502(a)(2) and 502(a)(3), alleging fiduciary breaches connected to a $92 million stock transaction.
Plaintiffs alleged inadequate trustee due diligence among the fiduciary breaches, but defendants sought dismissal because internal plan procedures had not been exhausted first.
The district court dismissed the complaint, bound by the 1985 precedent set in *Mason v. Continental Group, Inc.*, 763 F.2d 1219, and a Eleventh Circuit panel initially affirmed that decision.
Two judges wrote separately urging the full court to overrule that precedent, paving the way for the en banc reconsideration that ultimately reshaped the legal landscape.
Judge Jordan, writing for the en banc court, concluded that *Mason* imposed an exhaustion requirement Congress never contemplated, reasoning principally from ERISA’s own statutory text.
The court observed that while ERISA establishes a comprehensive framework for employee benefit plans, it contains no exhaustion requirement for statutory claims of fiduciary breach.
The Eleventh Circuit acknowledged its prior doctrine had been an outlier, with seven other circuits, including the Third, Fourth, Fifth, Sixth, Ninth, Tenth, and D.C. Circuits, already reaching the same conclusion.
The court described *Mason*’s rule as “an atextual product of judicial creation based solely on policy reasons” that had not withstood the test of time.
Crucially, the court refused to limit its ruling to future cases only, finding no principled reason the decision should not apply retroactively to parties already in litigation.
The ruling does not disturb existing precedent requiring participants to exhaust administrative remedies when challenging a straightforward denial of plan benefits under a plan’s terms.
The court also left open whether a plan could independently impose an enforceable exhaustion requirement for statutory claims through its own governing documents.
In *Bolton* itself, the plan’s claims provisions stated that participants “may” submit claims rather than requiring them to, which the court found reflected permissive rather than mandatory language.
For plan sponsors and fiduciaries operating in Alabama, Florida, and Georgia, the decision eliminates a commonly used early-dismissal defence that previously ended many cases before they could develop.
The ruling is expected to accelerate litigation over fiduciary conduct across the Eleventh Circuit, particularly involving ESOP transactions and valuations that include company insiders.
Plan sponsors should now review plan documents and summary plan descriptions to clearly distinguish benefit-determination procedures from those addressing broader ERISA statutory disputes.
Fiduciaries should continue to prioritise prudent decision-making, thorough documentation, and careful review of transactions, especially complex ESOP deals that carry heightened scrutiny under the law.