Appeals court revives Royal Caribbean 401(k) fiduciary case
An Eleventh Circuit panel reversed a summary judgment ruling and returned the ERISA lawsuit to the lower court.
A three-judge panel of the Eleventh Circuit has reversed and remanded an ERISA lawsuit brought on behalf of participants in the 401(k) plan for Royal Caribbean Cruises Ltd. employees. The panel concluded that a Florida federal judge erred in January 2025 by granting summary judgment to Royal Caribbean and Russell Investments Trust Co. on the fiduciary-breach claims.
Former Royal Caribbean employee and plan participant Ann Johnson filed the case in 2021. She alleged that the cruise line, its investment committee and former investment manager Russell breached their ERISA fiduciary duties by retaining Russell’s proprietary target-date funds in employees’ retirement plans. A class was certified in 2024.
In its published opinion, the appellate panel said an ERISA plaintiff is not invariably required to provide an apples-to-apples investment comparison to show objective imprudence. The panel characterized Johnson’s argument as focusing on whether the features distinguishing the Russell funds from otherwise similar choices were themselves reasons the funds were objectively poor investments.
Russell settled its portion of the claims for $500,000 before appellate arguments took place, leaving Royal Caribbean to continue the appeal without the investment manager.
