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On October 13, 2026, in Bolton et al. v. Inland Fresh Seafood et al., the Eleventh Circuit Court of Appeals, in an en banc decision (that is, a decision by all active Eleventh Circuit judges rather than a three-judge panel), held that ERISA does not require the exhaustion of administrative remedies (e.g., an appeal to plan’s fiduciary committee) prior to filing suit based on an alleged violation of ERISA’s fiduciary rules. The case is interesting because it undercuts the view that courts should defer to plan sponsor fiduciary decisions.
In this article we very briefly describe what the court did and then discuss why it matters.
Bolton et al. v. Inland Fresh Seafood et al. involved a lawsuit by participants in an ESOP who claimed that the valuation of company stock purchased by the ESOP was “inflated – the result of false financial projections, among other things – and far exceeded Inland Fresh’s fair market value.” Thus, plaintiffs argued, plan fiduciaries who caused the plan to enter into that transaction violated ERISA’s fiduciary rules.
Defendants moved to dismiss this claim based on the Eleventh Circuit’s 1985 decision in Mason v. Continental Group, Inc. That case held that before participants could bring a fiduciary claim they must “exhaust their administrative remedies.” The court does not discuss what, in this case, those remedies were, although they may have involved arbitration.
In its decision, the Eleventh Circuit overruled Mason and held that in “statutory claims” under ERISA, plaintiff participants can go straight to federal court, by-passing any administrative remedy (e.g., any plan appeal or arbitration provision).
The Eleventh Circuit’s position in Mason was unique among the federal Courts of Appeal.
Other circuits do require exhaustion of remedies for disputes based on the interpretation and application of plan documents, e.g., benefit claims. And in Bolton the Eleventh Circuit recognized this distinction. But, prior to Bolton, only the Eleventh Circuit had required “administrative exhaustion” for claims based on the statute – here ERISA’s fiduciary provisions.
In its decision in Mason, the Eleventh Circuit explained that, while “ERISA itself does not require [administrative] exhaustion for statutory claims” nevertheless:
Compelling considerations exist for plaintiffs to exhaust administrative remedies prior to instituting a lawsuit. Administrative claim-resolution procedures reduce the number of frivolous lawsuits under ERISA, minimize the cost of dispute resolution, enhance the plan’s trustees’ ability to carry out their fiduciary duties expertly and efficiently by preventing premature judicial intervention in the decision-making process, and allow prior fully considered actions by pension plan trustees to assist courts if the dispute is eventually litigated.
That last point – allowing “prior fully considered actions by pension plan trustees to assist courts if the dispute is eventually litigated” – is critical. Because generally where exhaustion of administrative remedies is required, courts will defer to the administrative decision – even where (as in the denial of a claims appeal) that decision is a fiduciary decision. And all courts have been comfortable with that approach when what is involved is the interpretation/application of a plan document.
An example of the application of this principle (deferring to administrative decisions with respect to a plan document) recently occurred in In Re: Quest Diagnostics Erisa Litigation, in which the Third Circuit deferred to a plan fiduciary committee’s (fiduciary) decision about how to apply an investment policy statement.
Some have suggested, however, that this latter principle (deference to decisions by plan fiduciaries) should be expanded to all fiduciary decisions – including those that are being challenged strictly based on the provisions of ERISA (e.g., the application of ERISA’s fiduciary rules). And the reason they give for this approach is exactly the one described in Mason: that exhaustion of administrative remedies, and the concomitant deference to the decisions made by plan fiduciaries, is necessary in order to “reduce the number of frivolous lawsuits under ERISA, minimize the cost of dispute resolution, enhance the plan’s trustees’ ability to carry out their fiduciary duties expertly and efficiently by preventing premature judicial intervention in the decision-making process.”
In Bolton et al. v. Inland Fresh Seafood, the Eleventh Circuit has stepped back from that approach, holding that, whatever its merits are as policy (in reducing frivolous litigation), there is no basis in ERISA for requiring that plaintiffs first seek an administrative solution before bringing a fiduciary suit in federal court.
We will continue to follow this issue.
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This is a publication of O3 Plan Advisory Services. If you have any comments, or have questions about regulatory developments, please contact your relationship manager or Mike Barry at mbarry@octoberthree.com.
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