ERISA Litigation Reform Act

This Act may be cited as the ERISA Litigation Reform Act.

Section 502 of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1132) is amended by adding at the end the following:

(n) For the purpose of any civil action under this section alleging that a fiduciary caused a plan to engage in a transaction that violates subparagraph (C) or (D) of section 406(a)(1), a plaintiff has the burden of plausibly alleging and proving that the transaction is not exempt under section 408(b)(2).

(o) For the purpose of any civil action under this section alleging that a fiduciary caused a plan to engage in a transaction that violates section 406 with respect to the purchase or sale of qualified employer securities, a plaintiff has the burden of plausibly alleging and proving that the transaction is not exempt under section 408(e).

(1) For the purpose of any civil action under this section against a plan or its fiduciaries, all discovery and other proceedings shall be stayed during the pendency of a motion brought under Rule 12 of the Federal Rules of Civil Procedure or pending any reply to an answer under Rule 7(a)(7) of the Federal Rules of Civil Procedure, unless the court finds, upon the motion of any party, that particularized discovery is necessary to preserve evidence or to prevent undue prejudice to that party.

(2) During the pendency of any stay of discovery pursuant to this subsection, unless otherwise ordered by the court or if doing so is contrary to the party’s document preservation obligations under the Federal Rules of Civil Procedure, any party to the action with actual knowledge of the allegations contained in the complaint shall treat all documents, data compilations (including electronically recorded or stored data), and tangible objects that are in the possession, custody, or control of such person and that the person would reasonably believe are relevant to the allegations, as if they were the subject of a continuing request for production of documents from an opposing party under the Federal Rules of Civil Procedure. A party’s document preservation obligations under this paragraph extend to all documents held by custodians (such as recordkeepers) that are in the possession, custody, or control of the plan or the party.

(3) A party aggrieved by the willful failure of an opposing party to comply with paragraph (2) may apply to the court for an order awarding appropriate sanctions.

(4) Upon a proper showing, a court may stay discovery proceedings in any civil action in a State court as necessary in aid of its jurisdiction, or to protect or effectuate its judgments, in an action subject to a stay of discovery pursuant to this subsection.

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