Duke v. Luxottica - ERISA Retirement Plan Class Action

1 24 - 3207 Duke v. Luxottica U.S. Holdings Cor p. United States Court of Appeals For the Second Cir cuit August T erm 2025 Argued: January 1 3, 2026 Decided: February 5, 2026 No. 24 - 320 7 J ANET D UK E, on behalf of herself and al l othe rs similarly situate d, Plaintiff - Appelle e, v. L UXOTTICA U.S. H OLDINGS C ORP., O AK LEY I NC., L UXOTTI CA G ROUP ERISA P LANS C OMPL IA NCE AN D I NV EST MEN T C OMMI TTEE, L UXOTTI CA G ROUP P ENSION P LAN, Defendants - Appellant s. Appeal fro m th e Unite d States Distric t Court for the Eastern Dis trict of New Y ork No. 21 - cv - 6072, Choudhu ry, Judge. Before: R OBINSON, N ATHAN, and K A HN, Circuit Judge s.

2 Plaintiff seeks to repre sent a class of part icipants in a defined benefit retirem ent plan under the Employ ee Retirement Incom e Sec urity Act (ER ISA), allegi ng that the p lan sy stem atical ly vio lat es ERIS A by usi ng outdated actuaria l assumptions in calculating benefits. The plaintiff invokes two of ERISA’s r emedial provision s: relief on behalf of th e plan (in the f orm of p lan reformation and monetary repaymen t to the p lan) throu gh a Section 502(a)(2) re presentative action and rel ief for herself and other parti cipants under Se ction 502(a)(3). Pursua nt to an agreement between the pla intiff a nd her former em ployer, the distri ct court compelled individual arb itration of the Section 502(a)(3) claim. We hold that the p laintiff has sta nding to seek, on behalf of th e plan under Section 502(a)(2), plan r eformation b ut not monetary pa yments to the plan; that the effective vindic ation doctrine precludes mandatory arb itration of that clai m; and t hat the distr ict court did not err in denying a motion for a mandatory stay of litigation. Giv en t he posture of this appeal, we do not c onsider whether th e plan reformation the plain tiff seeks is, in fact, avail able as a remedy unde r Section 502(a)(2). AFFIRMED in part and R EVER SED in part. R ACHANA P ATHAK, Stris & Maher LLP, Cer ritos, CA, (Peter K. Stri s, Jeff Hahn, Stris & Maher LLP, Cer ritos, CA, Michelle C. Ya u, Ryan A. Wheeler, Coh en Milstein Sellers & Toll PLLC, Washington, DC, Ka i Ric hter, Cohe n Mi lste in Se lle rs & To ll PLLC, Minneapolis, MN, on the brief), for Plaintiff- Appellee.

3 J EREMY P. B LUMENFEL D, Morgan, Lewis & Bockius, LLP, Philadelphia, P A, Keri L. Engelman, Morgan, Lewis & Bockius LLP, Bost on, MA, (Michae l E. K en neally, Morgan, Lewis, & Bockius LLP, Washington, DC, on the brief), for Defendants - Appellants. N ATHAN, Circuit Jud ge: When Janet Duke retired, she elected to receive retirement benefits for herself and any surviving sp ouse. F eder al la w, pursua nt to the Employee Retirement Income Security Act (ERISA), requires those benefits to be e quiv alen t to what Duke would receive if she were unmarried. She also signed a dispu te resolution agreemen t with her former employer subjecting v arious disputes be tween them to indiv id ua l arb itr atio n. Duke no w seeks to represent herself and a class of similar ly situa ted r etirees, ar guing that her pension plan ca lculated her bene fits us ing unreasonab ly o utdated a ctuar ial assu mptions, decreasing her m onthly pa yments relat ive to what she wo uld ha ve received if she were unmarried a t the ti me of her re tirement in violation of E R ISA. She also seeks, on behalf of her pens ion plan, reformat ion of the p lan an d repa yment from i ts fidu ciaries. Be low, t he district court held Duke has standing to ass ert these claims, co mpelled arbitratio n of Du ke’s in dividu al claims, and conclude d t ha t the

4 “effective vind ication ” doctrine pre cludes indivi dual ar bitrat ion of h er claims on beh alf of the p ension p lan. The distr ict court a lso denie d Defendants’ m otion for a mandatory sta y of li tiga t ion wh ile D uke’s in divi dual clai ms proce ed in arbi trat ion. We hol d that Duke has standing t o seek r eformat ion of t he pension plan b ut not m onetary payments to it, that her represen tative claim is not sub ject to ind ividual arbitratio n, and that t he district c ourt properly exerc ised its disc retion to deny De fendants ’ mo tion for a stay. BACKGROUND A. Factual Background Janet Duke worke d as a regional manager for Luxottica U.S. Holdings Corp. (Luxottica) for n early 21 years. 1 That j ob entitled her to a pension upon retirement, to be paid out of the Luxottica Group Pension Plan (the Plan), managed by the Luxot tica Group ERISA Plans Compliance and Invest ment Committee (the C ommittee). Because t he Plan pays a fixed retirement benefi t to participa nts regardless of the mar ket value of the Plan’s assets, i t is a “de fined benefit plan.” See 29 U.S.C. § 1002(3 4)–(35); see also Hirt v. E quitable Ret. Plan for Emps., Managers, & A gents, 533 F.3d 102, 104– 05 (2d Cir. 2008). When Duke ret ired, she had the choice of two types of pension benefits. The first, a single life annuity (S LA), would enti tle her —and only her — to a fixed monthly benefi t for the rest of her life. The alternative, a join t and survivor ann uity (JSA), wou ld entitle her to a fixed m onthly benefit for t he rest of her life, plus a monthly fraction 1 Th e facts ar e drawn from Duk e’s comp laint and pre sumed true for purposes of resolv ing this interlocutor y appeal.

5 (i.e., 50% to 100%) of that ben efit paid to any sur viving spouse for the rest of the sp ouse’s li fe. The JS A option is the defau lt form of pen sion benefit f or married retirees, and ERISA r equires it be the “actuaria l equivalent” of a h ypothe tical SLA th at the employee would rece ive instead. See 29 U.S.C. § 1055(d)(1)(B). To comply with ERIS A’s JSA actuarial equ ivalence requirem ent, the Committ ee employs “actu aria l assumptions” to c onvert the SLA benefit i nto a JSA benefit. Those assumptions include an i n terest rat e — to meas ure the changin g value of monetary benefits over time — and the ant icipated longe vity of a plan participant and her spouse. On November 1, 201 6, Duke elected to rec eive a JSA that would pay 100% of her monthly bene fit to any survivin g spouse. At the time, the Committee (as fiduciary of the Plan) converted SL As into JS As using a 7% annual i n terest rate an d life expectancy values published in 1971. On Apr il 1, 2021, the Commit tee updated the lon gevit y assumptions it use d to perfor m SLA - JSA conver sions. 2 But for JS A particip ants like Duke whose benef its were calcula ted before A pril 1, 2021, the Committee continues to pay benefits ba sed on the SLA -JSA conversion that assumed life expectanc y values published in 1971. According to D uke, these out dated a ssumptions decrease her monthly b enefi t by roughly $54. She contends, also, th at using the outdated assumptions means the Plan is perpetua lly out of 2 The Committee made this cha nge by gu aranteei ng to part icipant s whose benefits were calculate d after A pril 1, 2021 that they would receiv e no less than if the S LA - JSA conversion wer e performed using updated actuarial assumptions published at 26 U.S.C. § 417.

6 compliance with ERI SA and may suffer follow - on tax consequences as a result. B. Procedural History On November 1, 2021, Duke filed a putative class ac tion complaint against Lu xottica, Oakley, Inc. (a subsidiary of Luxo ttica), the Committee, and t he Plan (co llectively, Defe ndants or Appellants), seeking t o represent herself and o ther Plan pa rticipants and beneficiaries re ceiving JSA benefits c alculated befor e April 1, 2021. The complaint assert s four clai ms: first, a vio lation of ERISA’ s JSA equivalence require ment, 29 U.S.C. § 105 5(a)– (d); second, a v iolation of ERISA’s equiv alence requirement for accru ed benefits, id. § 1054(c)(3); third, a violati on of ERISA’s rules prohibi ting forfeiture of retirem en t benefits, id. § 1053(a); and fourth, a breach of ERISA’s fiduciary duty ob ligations, id. § 1104(a)(1)(A), (B), (D). The pur ported viola tion un derly ing al l cla ims is t he s a me — the Com mittee’ s use, before April 1, 2021, of alleged ly outdated actuarial assu mptions in converting SLAs int o JSAs. And for all claims, Duke se eks re lief under two of ERI SA’s remedial pro visions — relief on b ehalf of the Plan, under Section 502(a)(2), codified at 29 U.S.C. § 1132(a)(2); an d relief on behalf of hers elf and other P lan participants, under Se ction 502(a)(3), codif ied at 29 U.S.C. § 1132(a)(3). Most important for p resent purposes, Duke seeks both reformation of the Plan to upd ate its actuarial assump tions used to convert SLAs into JSAs, as well as monetary restit ution to the Plan in the form of loss restorati on and disgorgement of prof its. 3 3 Th e complaint seeks 15 categorie s of relief, including declaratory r elief, injunctive relief, plan refor mation, restitution, attorney’s fees, and “any

7 Defendants moved to compel arb itration, citing a provision of a Disput e Resolution Agreem ent (the Agreement) that Du ke signed in 2015. In relevant part, the Ag reement purports to require arbitration of “d isputes. . . ar ising ou t of or rela ted to the employment relationship or the termination of tha t relationship (including post - e mployment defa mation or r etaliation), trade secrets,. . . discrimination or harass ment and claims ar is ing under the. . . Employee Retirement Income Securit y Act []exc ept for cl aims for employee benefit s under any be nefit plan[.]” Joint App’x 1 44 –45. In particular, Defe ndants moved to com pel individual arbitration of Duke ’s cla ims, c it ing the Ag ree men t’s class act ion wa iver, which requires that Duke “ brin g any disp ute in arb itrat ion on an ind ividu al basis only, an d not on a class, collec tive or priva te attorney general representat ive basis on behalf of others. ” Id. 14 5. Defendants als o moved in the alternative to dis miss Duke’s claims for lack of sta nding and for failure to s tate a claim. The district co urt original ly granted Defe ndants’ motions in part, concluding that Duke lack s s tanding to seek r elief on b ehalf of the Plan under Secti on 502(a)(2), purs uant to Thole v. U.S. Bank N.A., 590 U.S. 538 (2020), and that the parties’ Agreement requires individual arbitrat ion of her claims for relief under Section 50 2(a)(3). Duke v. Luxottica U.S. Holdings Corp. (Duke I), No. 21 - cv - 6072, 202 3 WL other appr opriate equitable r elief[.]” Joint A pp’x 53. O n appeal, t he part ies categorize Duke’s reques ted remedies under Section 502(a)(2) as either plan reformati on (via in junc tion) or repaym ent to the p lan (via res toration of loss es or dis gorgement of prof its). W e adopt th ese conventions in this opinion.

8 6385389, at * 5–6, 11 (E.D.N.Y. S ept. 30, 20 23). 4 But after the cas e was reassigned to a different district court judge and Duke move d for reconsidera tion, the district court issued a new op inion concluding that Duke has stand ing to press a clai m under Section 502(a) (2) on behalf of the P lan for both refor mation and monetary pay ments to the Plan, and further that the “effective vindication” doctrine precludes mandatory individu al arbitration of that claim. Duke v. Luxott ica U.S. Holdings Corp. (Duke II), No. 21 - cv - 6072, 2024 WL 4904509, at *1, *16 (E.D.N.Y. Nov. 27, 2 024). The district c ourt also den ied Defendants’ alterna tive request to sta y litigati on of the claims under Sect ion 502(a)(2) pending arbitration of the claims under Se ction 502(a)(3), rejecti ng the argument that su ch a stay is mandatory under the Federal Arbitration Act (FAA) and finding that i ts dis cretion counseled in favor of per mitting the claims to proceed simult ane ousl y. Se e id. at *2 0–22. Defe nd ants time ly f iled a no tice of interlocutory appe al of the den ial of the motion to compel arbi tration and of the motion t o stay. Cf. 9 U.S.C. § 16(a)(1)(A)– (B). DISCUSSION We review de novo f acial challenges to a plaintiff’s stan ding — i.e., challenges “base d solely on the a llegations of the co mplaint and 4 The distri ct cou rt deferred rul ing on D efendants’ argu ment th at Duke lacks st anding beca use, as a factua l mat ter, she st ands to lose b ene fits if t he Committee updat es the Plan’s actuarial a ssumptions for pre - April 1, 2021 SLA - JSA conve rsio ns. See Duke I, 2023 WL 6385389, at *7. No party asks us to review this decision, no r must we, in part becaus e a district court “has leeway as to t he procedur e it wi shes to follow” to adjudicat e a factua l issue underlying a plaintiff’ s standing. All. For Env. Renewal, Inc. v. Pyramid Crossgates Co., 436 F.3d 82, 88 (2d Cir. 2006).

9 exhibits attached t o it.” So nterra Cap. Master Fun d Ltd. v. UBS AG, 954 F.3d 529, 533 (2d Cir. 2020) (cleaned up). We also review de no vo the district court’s disposition of the mot ions to compe l arbitrat ion and for a mandatory sta y under the FAA. See Katz v. Cellco P’ Ship, 794 F.3d 341, 344 n.4 (2d Cir. 2015). A. Appellate Jurisdicti on We must be gin by as suring o urselves o f th e Court’s jur isdictio n over this appea l. See Marquez v. Silver, 96 F.4th 579, 58 2 (2d C ir. 2024). In general, our appella te j urisd ict ion is lim ited t o reviewing final judgmen ts. Se e 28 U.S.C. § 1291. Limi ted exceptions to th is rule, however, perm i t review of certai n interlocuto ry orders, i ncluding a district court’s den ial of mo tions to co mpel arbi tration an d to stay litigation under the FAA. See 9 U.S.C. § 16(a)(1)(A)– (B). Our jurisdic tion to review those aspe cts of the d istrict c ourt’s or der is thus plain. But Appella nts ask us to revie w also th e district court’s determi nation that Duke has standi n g under Article III t o seek relief on behalf of the Plan under Se ction 502(a)(2) — a deter mination of the district c ourt’ s subj ect matte r jur isdict ion th at is n ot ord ina rily immediately appeal able. Cf. Ashmo re v. CGI Grp., Inc., 8 60 F.3d 80, 85 (2d Cir. 2017). The y argue that the FA A’s grant of inter locutory appellate jurisdicti on extends to this issue, as well. In general, interlo cutory appell ate review is limi ted to the particular decis ion of the district co urt that forms the bas is for immediate appea l. See Swint v. Chamber s Cnty. Comm’n, 514 U.S. 35, 38 (1995). That requires we assess th e scope of an “order” denying a motion to compel arbitrat ion or for a sta y. Cf. 9 U.SC. § 16(a)(1)(A)– (B). We hold to day that such an orde r includes a district court’s

10 determi nation that it has subject matter juri sdiction over the controvers y to be li t igated rath er than stayed o r arbitrated — inclu din g a p lain tiff’ s Ar ticle III st and ing. Several of our precedent s support this r esu lt. To begin, i t is routin e practice to revi ew a district c ourt’s exercise of su bject matt er jurisdiction on inter locutory appea l, as “[t]he existence of s ubject matter jurisdiction g oes to the very power of the district court to issue the r ulin gs now under cons ideration.” Merritt v. Shuttl e, Inc., 187 F.3d 263, 269 (2d C ir. 1999). Such is the case for interlocutory app eals of grants or den ials of pre liminary injunction s, San Filippo v. Unite d Bhd. of Carpenters & Joiners of Am., 525 F.2d 508, 512 – 13 (1975); of de nials of sovereign and qualifie d immunity defense s, Merritt, 187 F.3d at 268 – 69; In r e Methyl T ertiary But yl Ether (“MTBE”) Pro ds. Liability Litig., 488 F.3d 112, 121 – 24 (2d Cir. 2007); an d of ad judications of civ il contempt, U.S. Cath. Conf. v. Abortion Rights Mobil ization, I nc., 487 U.S. 72, 76 (1998). We discern no reas on that FAA appeals shou ld work any different l y, especi ally because “a d istrict c ourt mu st determine if there exist s a case or controversy in order for it to exercise its jurisdiction over [a] motion to co mpel [arbitration].” Doe v. Trump Corp., 6 F.4th 400, 416 (2d C ir. 2021) (quoting Klay v. United Healthgroup, I nc., 376 F.3d 1 092, 1110 n.19 (11th Cir. 200 4)). The same is true f or a district c ourt’s denial of a motion for a stay of litigation, which is necessarily premised upon its hav ing jurisd ict ion to pre side over the l itiga tion in the first p lac e. Indeed, we hav e before reviewed a district court’s exe rcise of subject mat ter jurisdiction in a Section 16(a)(1) appeal of the denial of a motion for an FAA stay, though

11 concededly without stopping to ask whe ther such an approach comported with Swint. See Adams v. Suozzi, 433 F.3d 220, 223 – 26 (2d Cir. 2005). 5 The crux of Duke’s res ponse is that stand ing is different. We are unpersuaded. A plaintiff’s st anding, just like the exist ence of diversity among the parties or a federal - law issue, bear s directly on the dis trict co urt’s sub ject matte r jur isdic tion. Th a t is b ecaus e “ Ar ticle III. . . limits the subject - matter juri sd iction of the federal co urts to ‘Cases’ and ‘Controv ersies.’” SM Kids, LLC v. Go ogle LLC, 96 3 F.3d 206, 21 1 (2d C ir. 2020). No principl ed reason exists for treat ing these two limitations on a district court’s po wer to entertai n an action differently in the c ontex t of an inter locutory appeal. A defect in either would have required the distri ct court to di smiss the ac tion, and thus 5 The court s of ap peals appear divided on this question. The Fifth, S event h, Eighth, and N inth Circui ts perm it reviewi ng (at least) subjec t matter jurisdiction on Sectio n 16(a)(1) appeal. See Hines v. Stamos, 111 F.4th 551, 558– 62 (5th Cir. 2024) (personal jurisdiction); Nettles v. Midland Funding LLC, 983 F.3d 896, 899 (7th Cir. 2020) (Article III standing); Benchmark I ns. Co. v. SUNZ Ins. Co., 36 F.4th 766, 770 (8th Cir. 2022) (su bject matter jurisdiction); Namis nak v. Uber Techs., In c., 971 F.3d 1088, 1091 – 92 (9th Cir. 2020) (Article II I standing). The Third C ircuit per mits interlocuto ry review of a di strict c ourt’s sta tutory bas is for exerc ising sub ject matter j urisd iction but not of a plaintiff’s Ar ticle III standing. S ee O’H anlon v. Uber Techs., Inc., 990 F.3d 757, 762 – 66 (3d Cir. 2021). Th e Sixth Circui t has not fo rmally weighed in but has cited O’Hanlon ’s rule with appr oval. See Schnatter v. 247 Grp., LLC, 155 F.4th 543, 553 (6th Cir. 2025). For the reasons give n above, we respectfully disagree with the Thir d Circuit’s approach and hold instead that we may re view a plaintiff’s standing to assert a claim at issue in a Section 16(a) (1) i nterlocu tory appeal.

12 “we have an obligation to determ ine whether the d istri ct court has subject matter jurisd iction to go f orward.” MTBE, 4 88 F.3d at 1 24. Finall y, were we unsure w hether a pla intiff’ s standing i s always revie wable on a Section 16(a)(1) inter locutory a ppeal, we would nevertheless hold in th is case that such review is appropr iate because it concerns an issue “inextricably intertwined” with an appealable order. Cf. Swint, 514 U.S. at 51. We someti mes refer to this as the doctrine of pendent appe llate jurisdiction. See Fre eman v. Complex Computing Co., Inc., 119 F.3 d 1044, 1049 – 50 (2d C ir. 1997). We have thus alread y s uggeste d th at, in an in terlocutory FA A appeal, w e may review a decisio n that fa lls outside o f Section 16(a)(1) so long it is “in extr icab ly inte rt wined ” w ith a dec isi on th at f alls w ithin S ection 16(a)(1). See Milligan v. CCC I nfo. Servs. Inc., 920 F.3d 146, 152 n.5 (2d Cir. 2019). Though the exer cise of pendent appellate jurisdiction is discretionary and res erved for “exceptional circumst ances,” Atlantica Holdings v. Sovereign Wealth Fund Sam ruk - Kazyna JS C, 813 F.3d 98, 117 (2d Cir. 2016) (quotation mark s omitte d), it is warrante d here. Duke’s standing to seek Section 502(a)(2) remedies b ears directly on the arbitrability of her cl aim under that pr ovision. This is because the district court base d its denia l of the motion to compe l arbitrat ion on the effective vindication doc trine, which prec ludes enforcing arbitration clauses th at “operate as a pros pective waiver of a p arty’s right to pur sue stat utor y remedies.” Am. Exp. Co. v. Ital. Color s Rest., 570 U.S. 228, 235 (2 013) (cleaned up and emphas is altered). T o determi ne whether the distr ict court proper ly applied that doctrine — as we will h ave to in reviewi ng its interlocutory dec ision d enying the motion to compel — we must ask which statutory remedies Duke

13 could hope to pu rsu e in federal court. As her Article III standin g is central to that inquiry, it is “inextr icably intertwined” — even more so than in the typical case — with t he d ist rict co urt ’s im med iate ly appealable order denying the motion to compe l arbitrat ion. Cf. MTBE, 488 F.3d at 12 3. Assured th at our juri sdiction permit s review of Duke’ s standing to seek Sect ion 502(a)(2) remed ies on be half of the Plan, we turn next t o the requirements o f Article III. B. Article III Standing As we have already i ntimated, Ar tic le III “ limit s the jur isdic tion of federal courts to ‘Cases’ and ‘Con trove rsies,’” and by e xt ension req uires a plain tif f to satis fy “ the ir red uci ble const itut iona l mi nim um of standing [.] ” Luja n v. Defs. of Wildlife, 504 U.S. 555, 5 59 – 60 (1992). Accordingly, a “pla intiff must have (1) suffered an inj ury in fact, (2) that is fair ly traceable to the challenge d conduct of the defe ndant, and (3) that is likely t o be redress ed by a f avorable jud icial decision.” Spokeo, Inc. v. Robbins, 578 U.S. 330, 338 (2016). Tho ugh a p laintiff’s claime d injur y m ust be r edressable, a plaintiff need not s tate a merito rious or even plausible cla im for relief under exi st ing law in order to have standing to pursue a claim. Se e Soule v. Conn. Ass’n of Schools, Inc., 90 F.4th 34, 45 (2d C ir. 2023). Indee d, unless a req uested form of relief that would redre ss a plaintiff’s injury “is so insubstantial, imp lausible, forec losed by prior decisions. . ., or otherwise comple tely devoid of merit a s not to involve a f edera l controversy,” Steel Co. v. Ci tizens for a Better Env., 523 U.S. 83, 89 (1998) (quotation mar k s omitte d), that it may be legally unavai lable is irrelevant for assessi ng a plaintiff’s Art icle III standing, Soul e, 90 F.4th

14 at 51. That said, “ standing is not d ispense d in gross; rather, p laintiffs must demonstrate s tanding for eac h claim that they pr ess and for each form of relief t hat they seek (for example, inju nctive relief and damages).” TransUn ion LLC v. Rami rez, 594 U.S. 413, 431 (2021). The Suprem e Court distilled the appli cation of these requirement s to ERISA act ions in Thole. There, two vested particip ants in a retirement plan sued the pl an’s fiduciaries under Sections 502(a)(2) an d (a)(3), alleging mi smanagement and s eeking repayment to the plan, injunctive re lief, and remo val of the fiduciaries. 590 U.S. at 5 40 – 41. L ike Duke, the Thole pla int iff s wer e participants in a defined benefit plan, meaning their legal entitlement to monthly benef its did not vary based o n the plan’s perfor mance or assets; i ndeed, neither plainti ff alleged that he had recei ved a dollar less than he w as owed. Se e id. at 540. The S upreme Cour t, applyin g tradit iona l Ar tic le III princ iple s, held th at t he p lain tif fs l acked standing to represent the plan, as they suffer ed no injury that would be redressed by any form of re lief they sought on behalf of the plan. See id. at 541. The Court reject ed v arious theori es of trust - specific standing, hold ing instead th at an E RISA plaint iff — just l ike any other — m ust st and to personally benefit from the liti gation in order to have standing. See id. at 542 –4 3. The Court left open, however, the possibility of standin g for plaintiffs who a llege mismanage ment that “substantially increase[s] the risk that the plan and the em ployer [will] fail and be unable to p ay the partici pants’ future. . . be nefits,” thereby genera ting a redressabl e injury. See id. at 5 46. B ut the Thole plaintiffs made no such allegat ion, and so they faced no credible chance of future in jury. Id. Nor d id they posses s a credible chance at

15 a future benef it, since any sur plus in a d efined benefit pl an’s ass ets return to t he e mployer rather than the participants. See id. at 543. Without any hope of financial gain fro m a successful laws uit on behalf of the plan, the plaintiffs lacked Art icle III standing to r epresent it. Id. at 54 7. Armed with these pri nciples, Appe llan ts a rgue tha t Duke lacks standing to pursue any remedy on behalf of the plan under S ection 502(a)(2). We agree in part. 1. Standing to Seek Plan Reforma tion First, Appellants argue tha t Duke lac ks standing to pursue p lan reformation un der Se ction 502(a)(2). They do not contes t, nor cou ld they, that Duke’s rec eipt of decreased bene fits constitutes a “classic pocketbook injury” c ognizable under Article I II. See Tyle r v. Hennepin County, 598 U.S. 631, 636 (2023); see al so Thole, 590 U.S. at 542. Appellants also a cknowledge that this i njury is at least pla usibly caused by the Comm ittee’s use of allegedl y outdated a ctuarial assumptions, and that it would be remedied by an order requiring t he Committee to upda te those a ssump tion s. See Appellants’ Br. 24 (“[S]he can seek to ch ange the terms of the Plan and or der Defendants to pay Plaintiff higher benefits in accordance with those changed terms.”). Instead, Appellants argue that such a remedy is categorically unavai lable under Se ction 502(a)(2) — which authorizes relief only to a plan — and thus Duke’s i n jury is n ot redressable und er that provision. But th is argument targe ts the merits of D uke’s claims, not her standing to pursue them. Without d ecid ing whether the reformat ion Duke seeks is an available remedy under Se ction

16 502(a)(2), we h old that Duke has st anding to se ek plan refor mation under the provision. Appellants are gene rally correct tha t Section 502(a)(2) authorizes relief to a plan, r ather than to participants the mselves. See L.I. Head Start Chil d Dev. Se rvs., Inc. v. Econ. Oppo rtunity Com m’n of Nassau Cnty., Inc., 710 F.3d 57, 65 – 66 (2d Cir. 2013). That limi tation flows from the text o f ERISA Sect ion 409 — incorporated into Section 502(a)(2)— which i mposes pe rsonal liability on fiduciaries to restore “to the plan” l osses caused by and pr ofits made fro m breac hes of fiduciary duty. See 29 U.S.C. § 110 9 (a). And thou gh the same provisi on a lso aut ho rizes “oth er equitable or rem edial relief as the court may deem appropriate,” id., the Supreme Court soon interpret ed that p hrase to require th e relief so ught “pro tect the enti re plan, rather tha n . . . the r ight s of a n ind i vidua l ben ef iciary,” Mass. Mut. Life Ins. Co. v. Russell, 473 U.S. 134, 141 (198 5). The Supreme Court has si nce walked back the “entire pl an ” requirement, permitting Section 502(a)(2) c laims that are likely to benefit e ven a single participant, so long as the relief sought would remedy a “plan injur[y],” rathe r than a p urely “in dividual inj ur[y].” S ee LaRu e v. DeWolf f, Boberg & Ass ocs., Inc., 552 U.S. 248, 256 (2008). But as we have explained, though LaRue clar ified that the availability of Section 502(a)(2) relief doe s not tur n on how w idespread a p lan injur y is, it must nev ertheless be to the pla n itself. See Cedeno v. Sasson, 100 F.4th 386, 399 (2d Cir. 202 4); see also Cooper v. Ruane Cunniff & Go ldfarb Inc., 990 F.3d 173, 180 (2d C ir. 2021). For relief from genuine ly person al injuries, participan ts must instead turn to Section 50 2(a)(3), which authorizes individ ual equit able relief regardl ess of the whether the

17 plan has also suffered. See Varity Corp. v. Howe, 516 U.S. 489, 515 (1996). Appellant s take these requirem ents to mean t hat Section 502(a)(2) offers D uke no remedy, as h er Artic le III injury —r educed benefits — does not harm the Plan. But Duke does not conten d that her receipt of reduced benefi ts harms the Pla n. Instead, she argues that the Plan is harmed because its use of allegedly ou tdated ac tuarial assumptions renders the Plan in constant noncompliance w ith ERISA and jeopardizes its favorable tax status as a result. 6 And though the reformat ion she seeks will allege dly increase her benefit s— which is why she has Article III standing — “[i]t is of no moment that recover y inuring to the Plan may ultimately benefit particular participants.” L.I. Head Start, 710 F.3d at 66. Nor does it matter tha t “a desire to ensure a defendant’s comp liance with re gulatory law is an insufficient injury for Ar ticle III standing,” App ellants’ Br. 32 (quotation marks omitted), be cause the Plan’s alleged nonco mpliance is its own injury tha t Duke se eks to remedy with Section 502(a)(2), rather tha n her receipt of dec reased benefits, which is sufficient for standing, see Thole, 5 90 U.S. at 542. 6 At argumen t, Appel lan ts suggested that th is type of p lan ha rm is n ot cognizable because Duk e did not allege it in her complaint. The complaint, however, contai ns se veral a llegati ons sugges ting that the Plan jeopard izes its fa vorable ta x stat us by fai ling to comp ly with ERISA’s act uarial equivalence requir ement and parallel r equirements in the Tax C o de. Se e Joint App’x 30 – 31 ¶ ¶ 33, 37, 41. Nonetheless, th e Court may r esolve conte sted jur isdict ional i ssues by r efer encing mat eria ls out side the pleadings, including the par ties’ briefs. See L icci v. Leban ese C anadian B ank, SAL, 834 F.3d 201, 211 (2d Cir. 2016).

18 Stepping back, whet her ERISA noncomp liance and at tendant tax consequences rea lly do c onsti tute “p lan injur ies ” within Section 502(a)(2)’s remed ial scope is an unde cided question properly reserved for th e merits. We know this in part because App ella nts muster no authority foreclosing re medying plan - co mp lian ce i njur ies of this sort under S ection 502(a)(2). Instead, Appe llants lame nt that permitti n g such a remedy “would remove any limit on the relief available under this part of ERISA’s carefully crafted enf orcement provision.” Reply B r. 14. Maybe, but th at does not render Duke’s position “so insu bstantial, impla usible, foreclosed b y prior decis ions.. ., or othe rwise completely devoid of merit as not to involve a fede ral contr oversy.” Cf. Steel C o., 523 U.S. at 89 (quotation mark s o mitted). Instead, this back -and - forth demonstrat es merely that both par ties have argu ments to make abou t “the legal availability” of S ection 502(a)(2) r elief in this c ase — a d isput e tha t “goes to the mer its, not jurisdiction.” Soul e, 90 F.4th a t 51. Today, we do not decid e whether Duke has adequately all eged a P lan injury that falls within the reme dial scope of Section 502(a)(2). We hold only tha t she has A rtic le I II sta nd ing to try. 2. Standing to Se ek Monetary Payment s Appellants argue next that, whether or n ot Duke has standing to seek reformation of the Plan, she lacks standing to seek mo netary payments to th e Pla n. S pecif ica lly, she seeks repayme nt of losses to the P lan and disgor gement of pr ofits (which would also go to the Plan). Appellants argue that Duke does not have standin g to seek those remed ies because only the Plan would bene fit from such reli ef, and Duke he rself w ould n ot. The y ar gue tha t Thole pr ecludes

19 participants from see king general monetar y recoveries on behalf of a defined benefit plan, so long as the participants have no t plausibly alleged a subs tantial risk of p lan and em ployer failure. C f. 590 U.S. at 546. Here, we agree with Appellants. Duke attem pts to d isting uish Thole along two lines. First, she argues that t he case is different because, unli ke her, the Thole pla intif fs had receiv ed all of their previous benef its. See 590 U.S. at 540. But the Supreme Cou rt also expla ined that, becau se the plainti ffs were participants in a defined ben efit plan, the y possessed “no e quitable or property i nterest” in the plan’s asset s, and so monetary repayment to the plan would not benef it the p lain tiff s p ers onally. See id. at 543. And though Duke cl aims to have received decreas ed benefits in the past, her bene fits were alleg edly decreased not f or a lack of Plan funds, but beca use of the Plan’s us e of outdate d act uarial assumptions. “Rel ief that doe s not remed y the injury s uffered can not bootstrap a plaintiff into fede ral court; that is the very esse nce of the redressabil ity requirement.” Steel Co., 52 3 U.S. at 107. Second, Duke argues that the for ms of relief she s eeks wi ll “work in tandem” by increasing Plan funding commensurate with the reformation she h opes to obtain. See Appellee’s Br. 35. But her e again, her argument is forecl osed by Thole. Be cause Duke is a p articipant in a defined bene fit plan, “the e mployer. .. is on the hoo k for plan shortfalls.” Thole, 5 90 U.S. at 543. Like wise, “the e mployer, n ot plan participants, rece ives any surp lus left over after all of the benefits are paid[.]” Id. So it ma y be that th e forms of relief she s eeks will work together, but nothing suggest s monet ary payments to the Plan will be necessary to effectuate any eve ntual refor mation. In other w ords, if

20 Duke is su ccessful in seeking reforma tion, she will b e made whole regardless of whether the P lan receives addit ional funds; and if D uke is unsuccessful in se eking refor mation, sh e will not be made whole regardless of whether the Plan receives thos e funds. A “fav orable decision” on this form of re lief will thus not “relie ve a discrete injury,” Larson v. Valente, 45 6 U.S. 228, 243 n.15 (1982), a nd therefore fail s Article I I I’s redressabili ty requirement. 7 We accordingly reverse the district c ourt’ s de termina tion that D uk e has stan ding to purs ue monetary remedies o n behalf of the Plan. C. Arbitrability Under the Effective- Vindication Doctr ine Appellants’ fal lback pos ition is that Duke’s Section 502 (a)(2) claim b e longs in ind ividu al ar b itrat ion purs uant t o the D ispu te Reso lution Agreement Duke si gned. Duke responds that the effecti ve vindication doctrine precludes mand atory individual arbi tration of her Section 502(a)(2) claim, and eve n if it did not, the Agr eement does not cover h er ERISA claims. We agree with Duke’s first a rgument and do not reach her second. The FAA prov ides that “a con tract. . . to settle by ar bitra tion a controvers y thereafter ari sing out of such cont ract. . . s ha ll be vali d, irrevocable, and en forceable, save upon such grounds as exist at law or in equity for the revocat ion of any contract [.] ” 9 U.S.C. § 2. 7 Duke off ered a new theory at a rgument: th at a judgmen t or dering monetary payments w ould compel the Committe e to ad jus t its ac tuari al assu mptions on i ts own. B ut that w ould b e true of any j udgme nt, a nd the Supre me Court h as made clear t hat “plaintiffs m us t demonstra te standing. . . for each form of relief that they seek[.]” TransUni on, 594 U.S. at 431.

21 “Section 2 is a congressional decl aration of a liberal feder al policy favoring arbitra tion agre ements[.]” M oses H. Cone Mem. Ho sp. v. Mercury Constr. C orp., 460 U.S. 1, 2 4 (1983). B ut it is not absolute. Instead, courts may, unde r the “effective vindication exce ption” to Section 2, “inval idate, on pub lic policy grounds, arbitration agreements that operate as a prospective waiver of a p arty’s r ight to pursue stat utory re me dies.” Am. Exp., 570 U.S. a t 235 (cleaned up). We have thus held t hat arbitrat ion pro vis ions r equ irin g ind i vidua l litigation of Section 502(a)(2) cla ims are unenfor ceable because they prospectively wa ive a plaintiff’s r ight under that pr ovision to b ring a representat ive action to s ecure remedi es on behalf of an ER ISA plan. See Cedeno, 100 F.4th at 400. This is so in part because Se ction 502(a)(2) actions must be brought in some f orm of representat ive capacity because the cl aim “is inherently rep resentational. ” Id. at 403; s ee also Coan v. Kaufman, 457 F.3d 250, 262 (2d Cir. 2006). To req uire such claims be b roug ht s ol ely in an indiv idu al c apac ity is to p roh ibit th em altogether. Se e Coop er, 990 F.3d a t 184. Our cases, especially Cedeno, have straightforwar d application to this case: Duke may not be compelled to indiv idually arb itrat e her Section 502(a)(2) c laim on behalf of the Plan. Appellants strain for ways around these cas es. None succeed. First, Appellants re turn to Article I II standing to ar gue that Cedeno precludes Duke’s quest t o remedy her supposedly “ individual injuries” under Sect ion 502(a)(2). Appellants’ Br. 42. Not so. Th ough we reaffi rmed in Cedeno the rule that S ection 502(a)(2) acti ons are available only to re medy p lan injuries, here Duke has al leged one: systematic noncompliance with ERISA and follow- on tax

22 consequences. Ceden o said nothing about whether that theory of plan injury is actionable or not under ERISA, and ne ither do we on this prelimi nary posture. Instead, the arb itration pr ovision in that case was unenfo rceable because i t wou ld h ave, if enforced, de pr ive d the plaintiff of e ven her “r ight to pursu e statutory re medies.” Cedeno, 100 F.4th at 401 (em phasis added) (q uoting Mi tsubishi Motors Corp. v. Soler Chrysler- Plymouth, I nc., 473 U.S. 614, 637 n.19 (19 85)). Because individual arbitrat ion would “materially interfere w ith [Duke’s] ability to seek relief u nder” Section 502(a)(2), the effective vindication doctri ne precludes its enforcem ent. Cf. St ate Farm Mut. Aut o. Ins. Co. v. Tri-Borough NY Me d. Prac. P.C., 120 F.4th 59, 91 (2 d Cir. 2024). Next, Ap pellants su ggest th at Cede no is different beca use the plaintiff in tha t case was a p articipan t in a defined contribut ion plan, rather than defined benefit plan. According to Appe llants, this distinction matters b ecause the al leged fiduciary mismanage ment in Cedeno w ould harm “both parti cipants and the plan itself by ‘sad dling the Plan with millio ns of dollars of debt to the substant ial detriment of the Plan and its participants[.]’” Ap pellants’ Br. 43 (alteration adopted). But again, Duke has all eged the same problem — that the Plan’s use of o utdate d actuarial assumptions h arms the P lan (through systemic ERISA non compliance and jeo pardy of its favor able tax status) as we ll as participants (through underpaymen t of bene fits). And Duke wi ll not be able to re medy th e Plan’s harm on he r own, as only a rep resentati ve action can resolve the al legedly detrimental effects of widesprea d violations of federal law. “I t is of no moment that reco very inuring to the Pla n may ultimatel y benefit part icular partic ip ants.” L.I. He ad Start, 710 F.3d at 66.

23 Finally, Appellants argue that reading Ce deno to protect Duk e’s statutor y righ t to p ursue a representative S ection 502(a)(2) action would run afou l of S upreme Cour t cases i nvalidating state laws that provide “a free-f loating right to pr oceed through col lective action for its own sake[.]” Appellants’ Br. 46 (quoting Cedeno, 100 F.4th at 401). It is true th at, as a general m atter, t he mere avai lability of a representat ive or class - action procedure is not a sub stantive rig ht that a plaintiff may invoke to av oid ind iv idua l arbitr at ion. See Estle v. Int’l Bus. Machs. Corp., 23 F.4th 210, 21 3 – 14 (2d C ir. 2022). Accordingly, even if a state purports to require genuinel y individual claims be brought in a represent ative capaci ty, the Supreme Court has held that such a scheme is a procedur al device over ridden by the FAA’s policy favoring the enforcement of arb itration a greements. See, e.g., Viking River Cruises, I nc. v. Moriana, 596 U.S. 63 9, 659 – 62 (2022). B ut as we expla ined in Cedeno, the Supreme Court in that cas e “r ecognized a qualitati ve difference between waivers of coll ec tive -action procedures like class actions, and waive rs that preclude a par ty from arbitrating in a represe ntational capacity on behalf of a single absen t principal [.]” 100 F.4t h at 402 (citing Viki ng River, 596 U.S. at 656 –58). Thus, Appellants’ argumen t that Duke s eeks to escape individual arbitration through the invocation of a re presen tative procedur e, like their other arg uments, proceeds on the flawed assumption that Duke seeks a pers onal remedy under Section 502(a)(2). She doe s not. Instead, she seeks re lief for an “absent pr incipal,” Cede no, 100 F.4th at 402, that “may u ltimately bene fit” her, as well, L.I. Head Sta rt, 710 F.3d at 66. Whether she s ucceeds, inc ludin g whether the allege d sy ste mic ERISA noncompl iance and jeop ardy to its favorab le tax status are

24 plan in jur ies that ca n be remedied thr ough Sect ion 502(a)(2), ar e merits questions be yond the scope of this appeal. Because Ap pellants present n o persua sive reason for disti ngu ishing Ceden o, we hold that it pre cludes compelling Duke to individually arbitrat e he r claims under S ection 502(a)(2). We do not reach the questi on whether the Section 50 2(a)(3) claim falls within the Agreement’s ar bitration provision, as th e FAA re moves from our appellat e jurisdiction revie w of a district court’ s interlocuto ry order compelling arbitr ation. See 9 U.S.C. § 16(b)(2). D. Section 3 Stay o f Litigation Appe llant s’ f ina l ch alleng e is to the dist ric t co urt’s de nia l of their motion to stay litigation on Sect ion 502(a)(2) pendin g the parties’ arbitrati on. The district court exerci sed its discretion to deny the motion, reason ing that Appe llants had n ot demon str ated the e xtent of factual overlap bet ween arbitrable and nonar bitrable claims or that substantial prejudice would result absent a stay. Appellants do not now contest these conclus ions. Ins tead, they argue onl y that the district c ourt w as wi thout d is cretion to deny the motion because the stay they sought wa s mandatory unde r Section 3 of the FAA. We disagree. Section 3 of the FA A provides in relevant part: If any suit or procee ding be brought in a ny of the courts of the United State s upon any issue re ferable to arbitrati on under an agreem ent in w riting for such arbitration, the court in which such suit is pending, upon being sat isfie d th at the is sue invo lve d in such su it or proceedin g is referable t o arbitrati on under such an

25 agreement, shall on a pplication of one of t he parties stay the trial of the action until such arbitr ation has b een had in acco rdance with the terms o f the agreement [.] 9 U.S.C. § 3. Section 3 stays are manda tory, not d iscretionary. Smith v. Spizzirri, 601 U.S. 472, 478 (2024). B ut Se ction 3 does not ex tend to claims not subject to arb itration; whether a distr ict court stays thos e is “a matter of its discre tion to control its docket.” Moses H. Cone, 460 U.S. at 20 n.23. Th at is so even for “c laims aris ing out of the same series of events[.]” Chang v. Lin, 824 F. 2d 219, 222 (2 d Cir. 1987), overruled on other gro unds, Rodri guez de Quijas v. Shearso n/Am. Exp., Inc., 490 U.S. 477 (19 89). True enough, “stay orders are pa rticula rly appropria te if the arbitra ble claims pred ominat e the lawsuit and the nonarbitrable cl aims are of question able meri t.” Genesco, Inc. v. T. Kakiuchi & Co., Ltd., 815 F.2d 84 0, 856 (2d Cir. 1987) (c iting NPS Commc’ ns v. Cont ’l G rp., Inc., 760 F. 2d 46 3, 465 (2d Cir. 1985)). But weighing those con siderations is still “ within the d istric t cour t’s discretion to control its docket.” Id. For their part, Appellan ts offer McCowa n v. Sears, Roebuck & Co., which concerned co nsolidated actions a sserting federa l and state securit ies claims against a brokerage firm (Dea n Witter) and a “controlling person ” under Vir igin ia la w (Sears). 908 F.2d 1099, 1100 – 01 (2d Cir. 1990). Dean Wit ter and th e plaintiffs had f ormed an arbitration agr eement; Sear s and the p laintiffs h ad not. Id. at 1105. After the federal cla ims were either referred to arbitrat i on or dismissed, Dean Wit ter and Sear s both moved for Se ction 3 stays of the r emain ing s tate law claim s, ar guin g that they fell within the scope

26 of the plaint iffs’ arbitration agreement with De an Witter a nd that Sears was a t hird - party bene ficiary of that agreement. I d. at 1101 –02. We held that Dean W itter enjoyed a r ight to a mandator y stay b ecause the claims against it were within the sc ope of the parties’ ag reement. Id. at 1107. But we exp lained that we did “need no t determine whether Sears also [had] such a right,” b ecause “[t]he pract ical effect of the stay as to Dea n Witter, an indispensable par ty. . ., [w as] that the suit against Sears, which [was] who lly dependen t on the claim against Dean Wi tter, [could not] proce ed.” Id. at 1108. Unlike Appellants, we do not read McCowan to compel a Section 3 stay an y time arbitrable and nonar bitrable claims share issues of law or fact. For on e thing, it was decided a fter Genes co and Chang, which the McCowan pane l had no authority to overr ule. For another, McCo wan ’s holding ste mmed fro m the fact that D ean Witter was an indispensabl e party in the litigation aga inst Sears but also entitled to a mandator y stay of litigation. Id. at 1101. The litigation could thus “[not] pro ceed” because Dean Witte r enjoyed a man datory right to await the co nclusion of arbitratio n before continuing, and it was ind isp ens able t o th e liti gat ion go ing for ward. The result had nothing to do with the scope of Section 3. But even if it did, any lesson from that case is confined to i ts narrow conte xt of a nonarb itrable claim that is entirely derivat ive of an arbitrable one a nd is sta yed as a result. Whatever McCowan says abo ut th at situation, it would no t mandate a st ay here, as Duke’s re quested reli ef under Section 502(a)(2) is much br oader than, and there fore not derivative of, her request under S ection 502(a)(3).

27 Finally, Appe llants ask us t o overlook Chang and Genesco and rely instea d on the word “issue ” in Sect ion 3 to hold that the provision mandates a stay any time a litigated claim shares a q uestion of law or fact with a claim to be arbitrated. Even on its own terms, the textual argument faces prob lems. First, Section 3 says more than the word “issue”; it mandates a stay of an “issue referable to ar bitration.” See 9 U.S.C. § 3 (emphasis adde d). In context, that plainly re fers to the claims tha t the dis trict court ord ers arbitrated, rather than any discrete legal or factua l issues that may one day a rise in arb itration. Second, as we have already ex plained, the issue refer red to arbitration in this case was Duke’s indi vidual entitlement to Section 502(a) (3) r elief, not the dist i nct questi o n whether the Pl an suffered a qual ifying injury redressable under Section 502(a)(2). S o even if we could overrule ou r precedents — which we cannot, see Garci a Pinach v. Bondi, 1 47 F.4th 117, 1 29 (2d Cir. 2025) — we w ould not be inclined to adopt Appellants ’ drastic re ading of Section 3. Because Appellan ts do not make any oth er argument that the district court abused its discretion, we affirm its den ial of the s tay motion. CONCLUSION The district court’s N ovember 27, 2024 or der is REV ERS ED as to Duke’s Article III s tanding to seek mone tary payments on behalf of the Plan and AFFI R MED in all other respects.