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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.

What Counts as Proof?

At Tuesday’s hearing, the judges zeroed in on whether comparison evidence is required at the summary judgment stage to prove ERISA violations tied to underperforming investments.

“So comparison evidence is required at the summary judgment stage?” asked U.S. Circuit Judge Robert J. Luck, pressing Royal Caribbean attorney Lars Golumbic.

Golumbic agreed, but Luck appeared unconvinced that faulty comparisons alone should doom the workers’ case. He noted the plaintiffs argued there was additional evidence showing that a prudent fiduciary would have avoided the challenged funds.

Vegas Analogies and Judicial Skepticism

U.S. Circuit Judge Andrew L. Brasher voiced greater skepticism, questioning whether the plaintiffs had truly shown imprudence. He likened the investment choices to a calculated decision rather than reckless behavior.

“They didn’t take the money to Vegas and put it on black, right?” Brasher asked, prompting debate over how far fiduciary discretion extends.

Johnson’s attorney, Brock Specht, countered that the funds were far from mainstream, saying other fiduciaries were abandoning them rather than embracing them.

“These are funds other fiduciaries are running away from, not adding, to their plans,” Specht said.

Brasher later returned to his casino metaphor, asking how courts should evaluate comparisons if an investor truly gambled with retirement assets.

“You’re going to compare that to crypto probably,” Golumbic replied, drawing laughter from the bench.