Key Takeaways
- • The Supreme Court is weighing The Capital Group Companies Inc. et al. v. Cathy Pover, a case that combines two contested DC plan issues: class action certification and the enforceability of arbitration provisions in ERISA claims.
- • Capital Group, which had $3.34 trillion in assets under management last year, petitioned the Supreme Court in August 2026 after losing at the district court and the 9th U.S. Circuit Court of Appeals, which ruled 2-1 in July 2026 against its arbitration provision.
- • The justices asked Pover, a former Capital Group employee, to respond by Dec. 2, a request that attorneys say signals interest in addressing both issues.
- • Attorneys say a pro-sponsor ruling could let sponsors add mandatory arbitration provisions and weaken plaintiffs' ability to bring class actions, though class certification has been approved in most contested ERISA cases.
- • Practitioners cite a "circuit split" on class certification, with Capital Group arguing the 4th Circuit's Genworth decision conflicts with rulings from seven other federal appeals courts.
Summary
The U.S. Supreme Court is considering The Capital Group Companies Inc. et al. v. Cathy Pover, a case that could address two long-disputed issues in defined contribution plan litigation: class action certification and arbitration of ERISA claims. According to the publisher's account, ERISA attorneys view the case as an opportunity to provide uniform legal guidance. Capital Group, which had $3.34 trillion in assets under management last year, petitioned the court in August 2026 after losing at the federal district court and appeals court levels. Pover, a former Capital Group employee, sued the company and its fiduciaries in November 2023, alleging ERISA violations for offering and retaining poorly performing investments. A Los Angeles federal judge declined to enforce Capital Group's arbitration provision in August 2024. In a 2-1 decision in July 2026, the 9th U.S. Circuit Court of Appeals held that the provision forced Pover to waive her ERISA rights to seek damages for other plan members. The court stayed its decision pending the Supreme Court's action on the petition. The justices have asked Pover to respond by Dec. 2.
Defense attorneys say a pro-sponsor ruling could provide significant relief. Gerald L. Maatman Jr. of Duane Morris LLP said the case's stakes are high, noting that "arbitration law is running smack into ERISA." Kimberly Jones of Willkie Farr & Gallagher said that if the court ruled for Capital Group, "We would see a lot of sponsors adding that language" on mandatory arbitration. Carol I. Buckmann of Cohen & Buckmann said a pro-Capital Group ruling "will enable people (in courts) to argue for arbitration rights." Courts have generally held that arbitration agreements in ERISA cases are unenforceable when they bar claims on behalf of other participants, though attorneys note that enforceability depends on plan document wording. The Supreme Court has previously declined without comment to review several petitions on arbitration in ERISA cases.
Class certification is also central. Plaintiffs must show numerosity, commonality, typicality and adequacy. Maatman's firm reported that federal judges approved nine of 14 contested ERISA class certification requests in the first half of 2026, a 64% approval rate, and 18 of 19 requests in 2025, or 95%. Approval rates were 67% in 2024 and 82% in 2023. Recent appellate rulings have tightened scrutiny: the 9th Circuit rejected certification in Munoz v. Alorica Inc. in July 2026, and the 4th Circuit invalidated certification in Trauernicht v. Genworth Financial Inc. in March 2026, finding participants' injuries "differed dramatically." Capital Group's petition relies on the Genworth decision, arguing it conflicts with rulings by seven other federal appeals courts. Brian D. Murray of Trucker Huss said courts are "looking more closely at whether participants were actually harmed in the same way." Until the Supreme Court acts, Murray advised sponsors to continue documenting their fiduciary process.
Defense attorneys say a pro-sponsor ruling could provide significant relief. Gerald L. Maatman Jr. of Duane Morris LLP said the case's stakes are high, noting that "arbitration law is running smack into ERISA." Kimberly Jones of Willkie Farr & Gallagher said that if the court ruled for Capital Group, "We would see a lot of sponsors adding that language" on mandatory arbitration. Carol I. Buckmann of Cohen & Buckmann said a pro-Capital Group ruling "will enable people (in courts) to argue for arbitration rights." Courts have generally held that arbitration agreements in ERISA cases are unenforceable when they bar claims on behalf of other participants, though attorneys note that enforceability depends on plan document wording. The Supreme Court has previously declined without comment to review several petitions on arbitration in ERISA cases.
Class certification is also central. Plaintiffs must show numerosity, commonality, typicality and adequacy. Maatman's firm reported that federal judges approved nine of 14 contested ERISA class certification requests in the first half of 2026, a 64% approval rate, and 18 of 19 requests in 2025, or 95%. Approval rates were 67% in 2024 and 82% in 2023. Recent appellate rulings have tightened scrutiny: the 9th Circuit rejected certification in Munoz v. Alorica Inc. in July 2026, and the 4th Circuit invalidated certification in Trauernicht v. Genworth Financial Inc. in March 2026, finding participants' injuries "differed dramatically." Capital Group's petition relies on the Genworth decision, arguing it conflicts with rulings by seven other federal appeals courts. Brian D. Murray of Trucker Huss said courts are "looking more closely at whether participants were actually harmed in the same way." Until the Supreme Court acts, Murray advised sponsors to continue documenting their fiduciary process.
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