ERISA Fiduciary Breach Claims in J&J Lawsuit Dismissed Again

The U.S. District Court for the District of New Jersey has once again dismissed a class-action lawsuit filed against Johnson & Johnson (J&J), which alleged that the company breached its fiduciary duties under the Employee Retirement Income Security Act (ERISA) by mismanaging its prescription drug benefits plan, costing the plan and its participants millions of dollars due to higher out-of-pocket costs for prescription drugs and higher premiums, among other things.

The initial complaint was dismissed on January 24, 2025, where the court ruled that the plaintiff (an employee of J&J) lacked standing to bring a lawsuit and granted the plaintiff leave to file an amended complaint. In March 2025, the plaintiff filed an amended complaint where a new plaintiff was added to the case and new allegations pertaining to premiums were asserted (specifically, that higher drug costs because of defendants’ fiduciary breaches inflated COBRA premiums). Despite these revisions, the court again granted the defendants’ motion to dismiss.

Legal Landscape

For employers, the J&J lawsuit highlights the importance of adhering to their fiduciary duties when managing their health plans. Under ERISA’s strict fiduciary standards, employers must prudently select and monitor their third-party service providers, including pharmacy benefit managers (PBMs). After the J&J lawsuit was filed, similar fiduciary litigation involving the management of prescription drug benefits followed, such as the Navarro v. Wells Fargo & Co. case. Like the J&J lawsuit, this case is still making its way through the court system as scrutiny of the PBM industry intensifies.

Employer Takeaway

While the J&J ruling can be viewed favorably for employers in their roles as plan sponsors, its ultimate impact—and that of similar fiduciary litigation—remains to be seen. Factors such as plan design and the specific allegations regarding how the defendants breached their fiduciary duties could result in different outcomes. Although these dismissals were based on procedural issues like standing, they underscore the importance of employers upholding their fiduciary duties when managing their group health plans, including the prudent selection and monitoring of service providers such as PBMs.

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The above information does not constitute advice. Always contact your employee benefits broker or trusted advisor for insurance-related questions.