Proposed Legislation Could Postpone Discovery In ERISA Litigation

A proposed bill, H.R. 6084, the "ERISA Litigation Reform Act," is largely aimed at raising pleading standards in suits alleging prohibited transactions under ERISA Section 406.

But one portion of the bill could have significant impacts on ERISA litigation even outside the realm of prohibited transactions. The proposed legislation would impose a stay on discovery once a defendant files a motion to dismiss under Rule 12 in any action against a plan or its fiduciaries under Section 502. The stay would be automatic unless the court finds that particularized discovery is necessary to preserve evidence or prevent undue prejudice. The bill would also impose document preservation obligations during the pendency of the stay.