In March 2025, the U.S. District Court for the District of Minnesota dismissed a proposed class-action lawsuit filed against Wells Fargo & Co., alleging the company breached its fiduciary duties under the Employee Retirement Income Security Act (ERISA) by mismanaging its employee health plan’s prescription drug benefits. The case, Navarro et al v. Wells Fargo & Company et al, Docket No. 0:24-cv-03043 (D. Minn. Jul 30, 2024), is one of several recent efforts by employee participants to hold large employers accountable for allowing Pharmacy Benefit Managers (PBMs) to allegedly drive up costs through opaque and misaligned pricing practices.

However, the case never got to the merits. The court dismissed the complaint without prejudice on Article III standing grounds, finding that the plaintiffs failed to allege concrete, particularized financial harm caused by the company’s actions. The court held that generalized grievances about drug pricing or plan mismanagement—without specific overpayment allegations tied to Wells Fargo’s conduct—were not enough to establish standing in federal court.

The dismissal echoed a similar ruling two months earlier in Lewandowski v. Johnson & Johnson, No. 3:23-cv-03637 (D.N.J. Jan. 10, 2025), where a federal judge granted Johnson & Johnson’s motion to dismiss on the same basis. In that case, the court concluded that the sole named plaintiff had not shown a redressable injury because she had hit her plan’s out-of-pocket maximum and could not link her alleged premium increases directly to any fiduciary breach.

Yet unlike the Wells Fargo plaintiffs—who have yet to refile—the plaintiff in the Johnson & Johnson case came back with a new strategy. On March 10, 2025, the plaintiff filed an amended complaint. Whether the amended claims are enough to survive dismissal this time will offer the first major test of whether ERISA plaintiffs can successfully navigate the standing issue in this new wave of fiduciary litigation targeting employer-sponsored health plans.

Why the Wells Fargo Case Was Dismissed
In the Wells Fargo case, the plaintiffs alleged that the company breached its fiduciary duty of prudence by allowing its PBM to overcharge the plan for generic drugs—often requiring co-pays that exceeded the actual retail cost of the medication. They argued that this harmed employees through inflated co-pays and premiums. The court ruled that plaintiffs lacked Article III standing to pursue their claims because they failed to demonstrate a concrete, particularized injury that was traceable to the alleged misconduct and redressable by the court. The ruling underscored the federal judiciary’s unwillingness to entertain class actions based solely on generalized theories of harm, even in fiduciary contexts.

Still, the dismissal was without prejudice, leaving the door open for a revised complaint. Whether the plaintiffs in the Wells Fargo case return with more specific allegations—perhaps following Johnson & Johnson’s playbook—remains to be seen.

How Johnson & Johnson’s Plaintiffs Are Trying to Overcome the Standing Defect
In the Johnson & Johnson lawsuit, the original plaintiff, Ann Lewandowski, alleged that Johnson & Johnson breached its fiduciary duties under ERISA by failing to monitor its PBM, resulting in inflated prescription drug costs. Her complaint focused on two theories: that she overpaid for drugs out of pocket and that the company’s mismanagement caused her healthcare premiums to increase. But the court dismissed the case, holding that the overpayment claims were speculative and that her having reached her out-of-pocket maximum meant any alleged harm wasn’t redressable.

In the second amended complaint filed on March 10, 2025, Lewandowski and co-plaintiff Robert Gregory refined their approach. Gregory is a retiree still paying monthly premiums under the plan. He alleges that he regularly paid $20 co-pays for drugs that could be purchased for about half that amount on the open market. Unlike Lewandowski, he did not reach his out-of-pocket maximum, and thus claims ongoing financial injury.

The plaintiffs also allege specific overpayments. Lewandowski claims she overpaid by approximately $210 for two prescription drugs in 2023—citing comparable retail prices and asserting she was blocked from using manufacturer copay assistance cards that would have reduced her out-of-pocket burden. These new details aim to meet the Spokeo standard for standing by alleging a concrete and particularized injury.

Perhaps most critically, the amended complaint links plan-wide drug overspending to employee premiums by alleging that Johnson & Johnson maintained a fixed employer/employee contribution ratio. The theory is that any increase in plan costs—from excessive PBM reimbursement rates, spread pricing, or failure to leverage rebates—would necessarily lead to increased premiums for participants. 

Is It Enough to Survive a Motion to Dismiss?
The amended Johnson & Johnson complaint makes a much more aggressive and targeted effort to establish standing. It includes real dollar figures, a clearer causal chain, and a new plaintiff who plausibly suffered ongoing financial harm.

But whether it’s enough will turn on how the court evaluates two things: (1) the specificity and significance of the alleged harm, and (2) the strength of the causal link between the employer’s alleged inaction and that harm.

Federal courts are notoriously cautious when it comes to drawing a straight line between employer fiduciary decisions and participant costs—especially in healthcare plans where numerous external factors affect pricing. The court may ask whether J&J had control over the drug pricing mechanics at issue or whether those decisions were driven by the PBM under a discretionary framework. If Johnson & Johnson merely followed industry standards or reasonably relied on third-party expertise, the plaintiffs could still lose—regardless of standing.

Another challenge is the magnitude of harm. Even if the plaintiffs can allege $200 in overpayment, is that de minimis? Courts have diverged on whether relatively small but real financial injuries suffice under Article III. Still, in fiduciary breach cases, even modest overcharges may be enough—particularly if systemic misconduct is alleged.

If the court finds standing this time, the Johnson & Johnson case could become the first of these health plan PBM cases to reach discovery. That would mark a significant shift in litigation risk for plan sponsors and put PBM contracts and communications under the microscope.

Why Employers Should Pay Attention
At its core, these lawsuits are about employer oversight. ERISA requires fiduciaries to act “prudently” and “solely in the interest of participants” when managing plan assets. This duty extends to the selection and monitoring of service providers—including PBMs.
Historically, employers have treated PBMs as black boxes: complex pricing algorithms, confidential rebate arrangements, and limited audit rights are common. But these very features are what plaintiffs are now attacking. When employers fail to understand or oversee how PBMs set drug pricing or apply rebates, plaintiffs argue they are abdicating fiduciary responsibilities.

The solution isn’t litigation-proofing; it’s visibility. Employers should be regularly auditing PBM performance, reviewing claims data, negotiating for full rebate pass-through, and benchmarking drug prices. Even if they ultimately delegate pricing decisions to a PBM, fiduciaries must prove they monitored the arrangement with diligence.

The fact that courts are dismissing these lawsuits on standing—rather than on the merits—should not be comforting. Plaintiffs are learning. They’re refining pleadings, adding new plaintiffs, and gathering pricing data from third-party pharmacies and manufacturers. If the Johnson & Johnson case survives, it will signal that with the right facts, these cases can move forward.

Once discovery begins, employers may face exposure not only for actual losses but also for the failure to act with reasonable care in monitoring one of the most expensive components of the healthcare plan: prescription drugs.

Conclusion
The dismissal of the Wells Fargo shows how hard it is for plaintiffs to get ERISA claims past standing. But the amended complaint in Lewandowski v. Johnson & Johnson may offer a roadmap for how to do just that. Whether it succeeds will have implications far beyond a single case—it could determine whether a new generation of fiduciary litigation is viable.

For plan sponsors, the message is clear: if you’re not auditing your PBM, you may already be behind. Waiting for a lawsuit is no longer a strategy. Transparency, monitoring, and documentation are now not only good business—they’re potential legal lifelines.