On November 26, 2025, in the closely followed case of Lewandowski v. Johnson & Johnson, et al., a New Jersey district court dismissed two amended ERISA fiduciary breach claims filed against defendant Johnson & Johnson, in its capacity as group health plan sponsor, and its benefit committee (collectively, J&J). The court determined that the participant plaintiffs had (once again) failed to establish legal “standing” to proceed with the claims. The ruling is good news for J&J and group health plan sponsors, generally.
The J&J class action lawsuit received widespread attention when it was originally filed in 2024; previously, ERISA fiduciary breach cases largely targeted only retirement plan fiduciaries. Essentially, the plaintiffs claimed that J&J breached its fiduciary duties by failing to prudently manage its prescription drug plan and negotiate more favorable drug pricing and PBM fees, which increased plan costs and resulted in higher participant premium payments and cost-sharing. (Please read our article on the 2024 J&J case filing.)
However, in January 2025, the court found that the plaintiffs lacked standing to pursue the claims because the allegations were too speculative and did not show how the defendants’ actions resulted in harm to participants in the form of higher premiums and cost-sharing. (For further information, please read our article on the court's prior ruling.) Subsequently, the plaintiffs filed two (second) amended complaints with the court.
In its November 2025 ruling, the court determined that the plaintiffs’ second amended claims still did not explain how the purportedly excessive PBM fees paid by the plan had any impact on their contribution rates and out-of-pocket costs. The court noted that the plaintiffs’ claims focused on the prices they paid for 57 drugs in a formulary of thousands of drugs and that the plan paid most of their benefit costs, making it difficult to establish a causal connection between increases in PBM fees and their premiums and cost-sharing. Moreover, the court observed that many variables unrelated to prescription drugs, such as a participant’s tobacco usage, coverage tier, and compensation, can affect contribution rates. Finally, the court emphasized that the plan fiduciaries had discretion to set contribution rates, and that the court could not alter the plan terms and require the defendants to lower the rates. In reaching its conclusion, the court relied heavily on a recent Minnesota district court ruling in a similar ERISA fiduciary breach case, Navarro v. Wells Fargo. (For further details, please read our article on the Wells Fargo decision.)
Accordingly, the court granted J&J’s motion to dismiss the claims because the plaintiffs lacked standing to pursue their case. The court’s dismissal was without prejudice, meaning the plaintiffs have a chance to file a third amended complaint to correct the standing deficiencies.
Employer Takeaway
The court’s decision, although perhaps not surprising, is still welcome news for employers concerned with the recent wave of fiduciary breach lawsuits against group health plan sponsors. Thus far, the court rulings in these cases have been consistent, and plaintiffs have been unable to establish standing to proceed with their claims.
Nonetheless, class action lawyers will likely continue to file fiduciary breach lawsuits and test new legal theories. Additionally, a recent U.S. Supreme Court decision has made it easier for plaintiffs to pursue certain types of claims against plan sponsors. (Please read our article on the Supreme Court's decision.) Therefore, plan sponsors should continue to review their own ERISA fiduciary governance practices to ensure they are prudently fulfilling their fiduciary obligations to their plans and participants, particularly with respect to the selection and monitoring of service providers. For further information on ERISA fiduciary governance, please ask your broker or consultant for a copy of the NFP publication ERISA Fiduciary Governance: A Guide for Employers.
However, there are efforts underway to curb meritless ERISA litigation. Specifically, the recently appointed head of the DOL’s Employee Benefit Security Administration, Daniel Aronowitz, has pledged to end “litigation abuse” and provide clearer regulatory guidance to employers to help them fulfill their fiduciary obligations. There are also proposals in Congress to deter unwarranted ERISA lawsuits. Hopefully, these measures will help to fulfill ERISA’s dual goals of protecting participants’ rights to benefits while also creating a fair and business-friendly legal and regulatory environment for employers that offer the benefits.
We will continue to monitor the litigation and related developments and report relevant updates in our biweekly Compliance Corner.
Read the court’s decision on Lewandowski v. Johnson & Johnson, et al.