Plaintiff Files Amended ERISA Fiduciary Breach Complaint Against J&J

March 25, 2025

On March 10, 2025, in Lewandowski v. Johnson & Johnson, et al., the original plaintiff, Ann Lewandowski, amended her ERISA fiduciary breach complaint and added another plaintiff, Robert Gregory, to the putative class action lawsuit. The amended complaint attempts to address deficiencies in the plaintiff’s prior claims, which were previously dismissed by a New Jersey district court due to lack of legal standing.

The Background

The lawsuit alleges that defendant Johnson & Johnson, in its capacity as group health plan sponsor, and its benefit committee (collectively, J&J) breached ERISA fiduciary duties to participants by mismanaging their prescription drug plans and overpaying for drugs. However, on January 24, 2025, the district court determined that the plaintiff’s original complaint had failed to sufficiently allege legal standing, as required for the case to proceed. Specifically, the court found 1) the plaintiff’s allegations that J&J’s conduct resulted in participants paying higher plan premiums and out-of-pocket (OOP) expenses was speculative and hypothetical and 2) the plaintiff herself had not suffered a personal concrete injury (i.e., injury-in-fact) by paying higher plan drug prices because she had reached her OOP limit each year and would have paid the same OOP amount, regardless of the drug costs. Please see our January 29, 2025, article for further details.

The Amended Complaint

Accordingly, the amended complaint speaks to the shortcomings noted by the court by providing additional facts regarding the named plaintiffs and the alleged harm they experienced. First, the amended complaint reasserts that J&J’s conduct harmed both plaintiffs by causing them to pay more in plan premiums as employees. It claims that J&J intentionally maintained a consistent ratio between employer and employee contributions towards premiums each year, so that overspending on prescription drugs resulted in higher plan premiums and employee premium costs. The plaintiffs also cite to numerous independent and/or government studies, including a DOL- commissioned report, which concluded that employee contributions to premiums increase when plans overspend on prescription drugs. 

Moreover, the amended complaint asserts that Lewandowski and Gregory not only paid more in employee premiums because of J&J’s alleged fiduciary breaches, but also in the form of higher COBRA and retiree premiums, respectively. The complaint notes that Gregory’s retiree healthcare premiums currently exceed $1,300 monthly.  

Next, the amended complaint claims that J&J’s alleged conduct caused Lewandowski to pay more in OOP costs (even though she eventually reached her OOP maximum). Specifically, it explains that in 2023, Lewandowski overpaid for two plan prescription drugs by approximately $210 (as compared to retail prices) and this amount would otherwise have been covered by a manufacturer’s drug copay assistance card. Additionally, it argues that the alleged overcharges caused Lewandowski to pay OOP costs sooner, which negatively impacted her cash flow and ability to purchase other life necessities, resulting in an independent form of financial injury. The amended complaint further asserts that defendant Gregory also was harmed by regularly paying $20 copays for a plan drug available at retail costs for about half his copay amount.  

Employer Takeaway 

In its prior ruling, the district court left open the question of whether a participant who did not reach their plan’s OOP maximum, as plaintiff Lewandowski had, could potentially establish an injury-in-fact based on excessive prescription drug costs. As largely anticipated, the plaintiff’s counsel has taken advantage of this opening by adding plaintiff Gregory, who did not reach his OOP maximum, to the lawsuit, and by arguing that plaintiff Lewandowski experienced harm despite reaching the plan’s OOP maximum. It is anticipated that J&J will challenge whether the plaintiffs have sufficiently alleged legal standing and file a motion to dismiss the amended complaint. However, it remains unclear whether the district court will find the additional details provided in the amended complaint sufficient to allow the case to proceed to trial.   

Nonetheless, plan sponsors should take note of the recent development in this prominent case. Sponsors should also be aware that a similar class action lawsuit was recently filed against JPMorgan Chase & Co., alleging various ERISA fiduciary breaches for mismanagement of their prescription drug plans. Notably, many of the same class action law firms involved in the J&J case are also representing the plaintiffs in the JPMorgan Chase & Co. case. We expect the wave of fiduciary breach lawsuits will continue, which presents numerous potential legal risks and potential liabilities for group health plan sponsors.  

Accordingly, sponsors should continue to review their own ERISA fiduciary governance practices to ensure they are prudently fulfilling their fiduciary obligations to their plans and participants, because this is the best protection against potential liabilities. 

We will continue to monitor this case and report any relevant updates in Compliance Corner. 

Lewandowski v. Johnson & Johnson, et al., Second Amended Class Action Complaint