Judges on the Eleventh Circuit Court of Appeals homed in Tuesday on a pivotal question in Royal Caribbean’s 401(k) suit: whether a lower court moved too quickly in clearing the cruise giant before trial in a dispute over allegedly underperforming retirement investments.
A Challenge to a Pretrial Victory
A three-judge appellate panel heard arguments from cruise ship workers seeking to revive claims that Royal Caribbean Cruises Ltd. and its investment committee violated the Employee Retirement Income Security Act by saddling employees with poorly performing target-date funds. The lawsuit was brought by former Royal Caribbean employee Ann Johnson, who alleged in a 2021 filing that proprietary target-date funds managed by Russell Investments Trust Co. eroded participants’ 401(k) savings.
The appeal followed a January 2025 ruling by U.S. District Judge Robert N. Scola Jr., who granted summary judgment to Royal Caribbean and Russell. Scola concluded the plaintiffs failed to present sufficient evidence of an imprudent investment process and relied on flawed comparisons between funds with differing risk and return profiles — not, he said, true “apples-to-apples” benchmarks.
Russell later agreed to settle with the class of plan participants for $500,000 before the appeal reached oral argument.
