A New York court split Stern v. JPMorgan Chase: fiduciary claims out, prohibited transaction claims in.
On March 9, 2026 a New York federal court dismissed fiduciary-breach claims over pharmacy benefit pricing but let prohibited transaction claims proceed.
What the court decided.
Fiduciary Claims Dismissed
The court called PBM pricing and formulary choices plan design decisions rather than fiduciary acts.
Prohibited Transaction Claims Proceed
Claims based on out-of-pocket drug overpayments were allowed to continue.
Case No. 1:25-CV-02097
The case is in the Southern District of New York.
Practical effects.
Settlor Versus Fiduciary
Plan design choices are not fiduciary acts, but how they are carried out can be.
Prohibited Transactions
Payments to parties in interest draw scrutiny under ERISA Section 406.
Case Continues
The remaining claims move forward.
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Quick answers.
Short answers. This is general information, not legal or tax advice.
Is this a win for employers?
Partly. Some claims were dismissed and others continue.
What is a settlor decision?
A choice about plan design, such as what to cover.
Where can I read more?
See the sources below.
Where the rules and figures come from.
Each figure on this page comes from the source below. Amounts are indexed or updated over time, so confirm current figures before relying on them.
29 U.S.C. 1106
ERISA prohibited transactions between a plan and parties in interest.
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