Burden at the Crossroads: Pizarro Paves the Way for Potential Supreme Court Review

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ERISA breach of fiduciary duty class actions have surged in recent years, prompting courts to grapple with complex questions about how these claims should be pleaded and litigated. Among the most consequential and unresolved issues is the deepening circuit split over whether, and under what circumstances, the burden of proof may shift in fiduciary breach cases.

In Pizarro v. Home Depot, Inc., 111 F.4th 1165 (11th Cir. 2024), the Eleventh Circuit added to this growing divide by expressly rejecting the burden-shifting framework adopted by several circuits, including the First, Fourth, Fifth, and Eighth. Instead, the court reaffirmed a more defense-oriented standard grounded in traditional principles of civil liability, holding that plaintiffs bear the burden of proving all elements of their claim, including loss causation.

In Pizzaro, the plaintiffs alleged that Home Depot imprudently allowed its 401(k) plan to incur excessive advisory fees and retain underperforming investment options. While the district court found triable issues as to whether Home Depot followed a prudent process, it nonetheless granted summary judgment to the defendants based on the plaintiffs’ failure to show that any alleged breach caused financial loss. The Eleventh Circuit affirmed the district court, finding that ERISA’s text and structure do not support shifting the burden of proof to fiduciaries.

In doing so, the Court clarified that its prior decision in Willett v. Blue Cross, 953 F.2d 1335 (11th Cir. 1992), already placed the burden of causation on plaintiffs, even if that opinion was not a model of clarity and had left room for debate. Fortunately, in Pizarro, the Court’s reasoning was more explicit, recognizing that while ERISA does not specifically assign the burden of proof, the default rule in civil cases is that the plaintiff must prove all elements of their claim, including causation. Shifting that burden to the defendant, the Court explained, “would turn the usual principles of civil liability on their head.” Pizarro, 111 F.4th at 1174.

The Court also considered, and rejected, exceptions to the default rule that may apply in other legal contexts, such as affirmative defenses or statutory exemptions. The Court found that ERISA’s detailed and carefully crafted structure indicated that Congress intentionally chose not to include a burden-shifting framework. It also rejected the argument that trust law principles support shifting the burden, noting that those rules did not fit neatly within ERISA’s statutory scheme. Because ERISA imposes strict disclosure and reporting obligations on fiduciaries, the Eleventh Circuit reasoned that Congress addressed any information imbalance by narrowing it—not by shifting the burden of proof to defendants.

As the circuit split over burden-shifting continues to deepen, Pizarro marks a significant development for ERISA fiduciaries, offering a clear and persuasive roadmap for reaffirming the default rule that places the burden of proof squarely on plaintiffs in fiduciary breach actions. Acknowledging the issue’s broader implications, the Pizarro plaintiffs filed a petition for a writ of certiorari, to which Home Depot responded last month. All eyes are now on the Supreme Court, whose decision on whether to take up the case could reshape the landscape of fiduciary breach litigation nationwide.