Ninth Circuit Vacates Summary Judgment for Pension Plan Fiduciaries, Directing Reassessment of Prudence Under Intel’s Prospective-Methods Standard

In Klawonn v. Board of Directors for the Motion Picture Industry Pension Plans, No. 25-2874, No. 25-3230, 2026 WL 2364541 (9th Cir. Aug. 14, 2026), Plaintiff, on behalf of the Motion Picture Industry Individual Account Plan, appealed the district court’s grant of summary judgment in favor of the Board of Directors for the Motion Picture Industry Pension Plans on her claim for breach of the ERISA fiduciary duty of prudence, and Defendants conditionally cross-appealed the district court’s earlier class certification order. Reviewing the summary judgment de novo, the Ninth Circuit vacated and remanded. The district court had granted summary judgment on the ground that “underperformance must be both substantial and consistent to support a claim of imprudence,” but it ruled without the benefit of the court’s subsequent decision in Anderson v. Intel Corp. Investment Policy Committee, 137 F.4th 1015 (9th Cir. 2025).

In Anderson, the court clarified that prudence should be evaluated “prospectively, based on the methods the fiduciaries employed,” and that a breach of the duty of prudence can be shown by alleging facts that would directly demonstrate the fiduciaries employed unsound methods in making their investment decisions. The court therefore remanded for the district court to assess the direct evidence of breach under that methods-based standard and to determine whether a triable issue of fact remains. The court further directed the district court to revisit its definition of loss in light of the statutory language of 29 U.S.C. § 1109(a), which references “any losses” to the plan resulting from a breach rather than the “substantial loss” implied by the district court’s ruling.

Turning to the cross-appeal, the court held that the district court did not abuse its discretion by initially certifying the class with Plaintiff as the class representative. At the time of certification, Plaintiff’s proffered evidence of her intent to return to work, offered during a period of mass industry strikes causing work shortages, was sufficient to establish standing as to her claims for prospective relief. By the time of summary judgment a year later, however, Plaintiff remained unemployed, had not worked the 870 hours required to reenter the retirement plan, and had cashed out of the plan, rendering her prospects of returning speculative and her individual claim for prospective relief moot. The court held that because the class had been properly certified before Plaintiff’s claim became moot, the mootness of her individual claim did not moot the class action, and it directed the district court on remand to determine whether a substitute class representative would be available. The court vacated the entry of summary judgment and remanded for further proceedings.