Second Circuit Revives ERISA Breach of Fiduciary Duty Claims After Finding Pension Plan Participant Has Article III Standing

In Cudjoe v. Building Industry Electrical Contractors Association, et al., No. 24-921, 2025 WL 655580 (2d Cir. Feb. 28, 2025), a case alleging fiduciary misconduct involving the mismanagement of benefit fund assets, the Second Circuit determined that at the motion to dismiss stage, Plaintiff-Appellant Martin Cudjoe’s allegations of financial harm were sufficient to establish a concrete interest in the outcome, thus satisfying the standing requirement of Article III.

Plaintiff, on behalf of himself and similarly situated individuals, filed a class action lawsuit against several fiduciaries of the Building Trades Annuity Benefit Fund. Cudjoe alleged that these fiduciaries breached their duties by unjustly approving over $1 million in compensation for themselves from the fund’s assets. This, he argued, resulted in significant financial harm to union members and violated ERISA provisions designed to protect employees’ retirement benefits.

The district court initially dismissed Cudjoe’s claims, stating that he failed to establish standing under Article III of the Constitution. In particular, the court found that Cudjoe did not sufficiently demonstrate a concrete injury resulting from the fiduciaries’ actions.

The Second Circuit conducted a de novo review of the district court’s dismissal, examining whether Cudjoe adequately alleged an injury in fact, a requirement for standing.

The Second Circuit concluded that Cudjoe’s complaint did plausibly allege a concrete injury. Specifically, the complaint suggested that the trustees amended the Trust Agreements to secure unwarranted compensation, depriving the Benefit Funds of potential investment returns. Cudjoe argued that if the funds had been properly managed, they could have earned significantly more, enhancing the benefits available to union members. The court concluded that Cudjoe’s allegations of financial harm were sufficient to establish a concrete interest in the outcome, thus satisfying the standing requirement. The Second Circuit vacated the district court’s decision and remanded the case for further proceedings.