The district court erred by conflating the issue of Braden’s Article III standing with his potential personal causes of action under ERISA.

Braden v. Wal-Mart Stores, Inc., 2009 U.S. App. LEXIS 25810 (8th Cir. Mo. Nov. 25, 2009)

The  Eighth Circuit found very little correctly done by the district court in this recent opinion addressing threshold requirements for properly stating ERISA claims.  The opinion offers a welcome clarification of recurring issues, such as standing and the specificity required in stating claims for relief.

The gist of the complaint was that Wal Mart’s ten billion dollar 401(k) plan paid excessive managment fees and a number of improprieties involving the alleged sharing of these fees with the trustee.  In any event, the defendants moved for dismissal under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6) and the district court granted the motion:

The district court granted the motion, concluding that Braden lacked constitutional standing to assert claims based on breaches of fiduciary duty prior to the date he first contributed to the Plan and that he otherwise failed to state any plausible claim upon which relief could be granted.

“Conflation” Of Standing And Merits

The Eighth Circuit hewed to a conservative line in circumscribing the contours of Article III standing.  This defense, routinely asserted in ERISA litigation, can often overwhelm considerations of the merits of the principal claims such that the two issues converge on one point.  When that happens, every case becomes a constitutional issue – and that should suggest a flaw in analysis. 

So the Eighth Circuit concluded, was the case here: