ERISA Breach of Fiduciary Duty: Shifting the Burden of Proving Causation to the Defendant

Abstract

In ERISA breach of fiduciary duty litigation, can the plaintiff prove duty, breach, damages, and then shift the burden to prove causation to the defendant? Yes, based on trust law principles and policy concerns, the fiduciary should bear the burden of proof for causation. Like trust law, the beneficiary should be required to prove duty, breach, and loss; then, the burden to disprove causation should be shifted to the fiduciary. This article is the first to address the question of shifting the burden of proving causation in ERISA fiduciary duty litigation. A statutory interpretation analysis of the applicability of trust law to ERISA fiduciary duty litigation and a consideration of the relevant policy concerns are contained in this article. There is also a case collection on the present circuit split. Part I provides background on ERISA, retirement plans, and the general rule in American jurisprudence for who bears the burden of proof and trust law’s exception to that rule. Part II is a case collection of the circuit split. Part III argues that the burden should be shifted through an analysis of the common law standard for the applicability of trust law to ERISA, a statutory interpretation of ERISA, and a consideration of the policy reasons in favor of the shift.