Five former Inland Fresh employees and pension plan participants sued Inland Fresh, the plan trustee, the plan’s committee, and four of the company’s officers and directors, after the plan used the proceeds from a $92 million loan, guaranteed by the company, to purchase all outstanding shares of the company’s common stock from four of the company’s officers and directors. Plaintiffs contend that the purchase price was inflated — the result of false financial projections, among other things — and far exceeded Inland Fresh’s fair market value. On behalf of the plan itself and a proposed class of the plan’s participants, the plaintiffs brought claims under ERISA Sections 502(a)(2) and (a)(3). They alleged that the defendants breached their fiduciary duties by causing the plan and its participants to overpay by tens of millions of dollars for the Inland Fresh common stock, and that the plan’s trustee failed to conduct proper due diligence.
The District Court dismissed for failure to exhaust administrative remedies, and a panel of the U.S. Eleventh Circuit initially affirmed. However, the Court of Appeal granting the plaintiffs’ application for rehearing en banc, and the full Court of Appeal held that exhaustion was not required.
“We do not take our decision to overrule Mason lightly. But our holding requiring administrative exhaustion in Mason was an atextual product of judicial creation based solely on policy reasons. That holding, moreover, has not withstood the test of time as most of our sister circuits have come to a contrary conclusion.
“We start with ERISA itself. Despite its ‘comprehensive’ scope, ERISA does not contain an exhaustion requirement for statutory claims….
“That the administrative exhaustion holding in Mason was unmoored from ERISA’s text is enough, in doctrinal terms, to call it into serious question. But it is also noteworthy that Mason and its progeny are at odds with seven of our sister circuits; the Third, Fourth, Fifth, Sixth, Ninth, Tenth, and D.C. Circuits have held that plaintiffs asserting statutory claims under ERISA do not have to exhaust administrative remedies….
“Secondary authorities side with the majority position that exhaustion is not required for statutory claims under ERISA. See, e.g., RIA Pension & Benefits Library § 139, 411 (2025) (“Exhaustion of administrative remedies is not required in actions for breach of fiduciary duty.”); Andrew L. Oringer, ERISA: A Comprehensive Guide § 8.04[E] at 8-43 (9th ed. 2024) (“Unlike actions to recover benefits, the courts generally have not required the exhaustion of internal claims procedures as a precondition to filing suit for breach of fiduciary duties. Because suits alleging breach of fiduciary duty involve statutory application rather than plan interpretation, the special expertise of plan administrators with respect to plan language and prior applications would be of little or no assistance to a reviewing court.”); Jared A. Goldstein, Employment Discrimination Claims Under ERISA Section 510: Should Courts Require Exhaustion of Arbitral and Plan Remedies?, 93 Mich. L. Rev. 193, 197 (1994) (“Courts should not impose an exhaustion of plan remedies requirement for statutory claims … because neither the text nor the legislative history of ERISA indicates that Congress intended to require exhaustion for statutory claims.”); Stephen R. Bruce, Pension Claims: Rights and Obligations 704 (2d ed. 1993) (“Exhaustion of a plan’s claims procedure is not a prerequisite to an action to remedy a statutory violation if the violation is independent of the correct interpretation of the plan’s terms.”). These authorities provide further support for overruling Mason.”
Bolton v. Inland Fresh Seafood, 2026 WL 3056461 (11th Cir. Oct. 13, 2026) (en banc).
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