11th Circuit Overturns Administrative Remedy Exhaustion Requirement for ERISA Plaintiffs

In an en banc decision, Bolton v. Inland Fresh Seafood Corp. of Am., Inc., No. 24-10084 (11th Cir. Oct. 13, 2026) (en banc), the 11th Circuit Court of Appeals overturned a lower court ruling that required ESOP participants to exhaust all their administrative remedies before bringing fiduciary claims under ERISA in court. The decision brings the 11th Circuit in line with most of the other circuit courts. 

The case stems from a $92 million ESOP buyout at Inland Seafoods in 2016, which the plaintiffs allege was overpriced. The plaintiffs alleged that the defendants (including the independent trustee), the sellers to the ESOP (all of whom were company executives), and the company’s executives each acted as fiduciaries. The suit alleged that executives had already received multiple bids for the company at lower prices; that management provided the appraiser with highly unrealistic projections about significant increases in revenues and profits; and that the defendants sought multiple valuations for the stock and accepted the highest one.

In the initial case, decided in 2023, the defendants did not respond to the substance of the claim in their legal filings but instead argued the case should be dismissed because the plan required the plaintiffs to exhaust their administrative remedies under the plan first. The district court ruled that the plaintiffs should have first filed a complaint with the plan committee. The plaintiffs argued that would be futile given the composition of the committee and that the plan language, in any event, gave them the option to sue. The district court sided with the defendants, and the plaintiffs then appealed.

In Bolton v. Inland Fresh Seafood Corp. of Am., Inc., No. 24-10084 (11th Cir. Oct. 15, 2025), a three-judge 11th Circuit panel dismissed the appeal, but two of the judges wrote that the precedent for the decision, the non-ESOP case Mason v. Continental Group, Inc., needed to be revisited. Their en banc decision in this case did just that and overturned that precedent. The court noted that “Mason and its progeny are at odds with seven of our sister circuits; the Third, Fourth, Fifth, Sixth, Ninth, Tenth, and D.C. Circuits have held that plaintiffs asserting statutory claims under ERISA do not have to exhaust administrative remedies.” Only the 7th Circuit, it said, has affirmed the exhaustion defense, and even then, the court said, it is not mandatory. The court decided in this case to overturn Mason, holding that "ERISA does not require administrative exhaustion of statutory claims, including breach of fiduciary duty claims, and the plan here did not mandate exhaustion," meaning that the lawsuit can proceed.

This decision has also been covered in our NCEO Employee Ownership Legal Digest, featuring attorney-written summaries of court decisions affecting employee ownership companies. Browse the Legal Digest and subscribe to get new entries as they are published.