Cathy Pover is a participant in The Capital Retirement Savings Plan, a defined-contribution retirement plan sponsored by her former employer, The Capital Group Companies, Inc., a global asset manager. Participants direct their own investments from a menu of options Capital Group provides, and Capital Group collects a transaction fee from the funds included on that menu. In 2020, the Plan’s Administrative Committee amended the Plan to add an arbitration requirement covering any claim relating to the Plan, along with a waiver barring participants from bringing any “class, collective or representative” claim; the waiver separately provided that if it were ever found unenforceable, any class, collective, or representative claim would instead proceed in court rather than arbitration.

Pover sued Capital Group and its Plan fiduciaries “in a representative capacity on behalf of the Plan,” alleging the company breached its duties of prudence and loyalty by retaining a set of underperforming mutual funds on the Plan’s investment menu because those funds generated substantial fee income, rather than replacing them with better-performing alternatives. She sought plan-wide relief under the Employee Retirement Income Security Act of 1974 (ERISA; 29 U.S.C. §1001 et seq.), including an order requiring the fiduciaries to restore the Plan’s losses, disgorgement, removal of the breaching fiduciaries, and reformation of the Plan’s investment lineup.

Capital Group moved to compel arbitration under the Federal Arbitration Act (FAA; 9 U.S.C. §2). Pover opposed, arguing the Plan’s representative-action waiver was unenforceable under the judicially created “effective-vindication doctrine,” because it prevented her from bringing the plan-wide claim ERISA’s enforcement provisions specifically authorize. The United States District Court for the Central District of California agreed, holding the waiver impermissibly stripped Pover of her substantive right to sue on the Plan’s behalf, and that the waiver’s own terms made it non-severable from the arbitration requirement for any claim later found to fall within it. The court denied Capital Group’s motion to compel arbitration, and Capital Group appealed.

In the published case of Pover v. The Capital Group Companies, Inc., No. 24-5298 (9th Cir., July 2026) — the Ninth Circuit affirmed the district court’s order denying Capital Group’s motion to compel arbitration.

Writing for the majority, Judge Forrest explained that ERISA gives plan participants a cause of action, under 29 U.S.C. §1132(a)(2) (ERISA §502(a)(2)), to enforce the duties 29 U.S.C. §1109(a) (ERISA §409) imposes on plan fiduciaries, and that the Supreme Court has twice confirmed such claims are brought “in a representative capacity on behalf of the plan as a whole,” first for defined-benefit plans in Massachusetts Mutual Life Ins. Co. v. Russell (1985) 473 U.S. 134, and later for defined-contribution plans like Pover’s in LaRue v. DeWolff, Boberg & Associates, Inc. (2008) 552 U.S. 248. Under the effective-vindication doctrine, arbitration agreements that operate as a prospective waiver of a party’s right to pursue statutory remedies are unenforceable on public policy grounds, citing American Express Co. v. Italian Colors Restaurant (2013) 570 U.S. 228 and Viking River Cruises, Inc. v. Moriana (2022) 596 U.S. 639.

Applying that framework, the panel held Pover’s claims were necessarily representative in nature, since a section 502(a)(2) claim always proceeds on the plan’s behalf regardless of whether the underlying injury is felt plan-wide or within an individual account. Following its recent decision in Platt v. Sodexo, S.A. (2025) 148 F.4th 709, which held a similarly worded waiver of “any purported class or representative proceeding” unenforceable, the majority found no meaningful difference between that language and the Capital Group Plan’s bar on claims brought on a “class, collective or representative basis.” The majority separately rejected Capital Group’s argument, based on LaRue, that a defined-contribution plan participant may only recover losses to her individual account in arbitration while equitable plan-wide relief remains off the table; the court held LaRue does not permit “slic[ing] and dic[ing]” a participant’s plan-wide and individual-account injuries in that manner, aligning itself with the Second and Sixth Circuits’ rejection of the same argument. Because the Plan’s own waiver provision specified that any representative claim found unenforceable in arbitration must instead proceed in court, the panel held the district court correctly declined to sever the waiver from the arbitration clause and correctly denied the motion to compel.

Judge VanDyke dissented on two independent grounds. First, on the merits, he argued the majority misapplied Platt by failing to analyze the Plan’s specific language, contending that under ordinary rules of interpretation the phrase “class, collective or representative” should be read to bar only collective-style representative suits (akin to class actions), not the distinct “principal-agent” style of representative suit — like a section 502(a)(2) claim brought on a plan’s behalf — that the Supreme Court described in Viking River Cruises. Second, and more fundamentally, Judge VanDyke argued the panel should never have reached the merits at all, because the Plan’s incorporation of the American Arbitration Association’s rules constituted clear and unmistakable evidence that the parties delegated threshold arbitrability questions, including effective-vindication defenses, to the arbitrator rather than the courts. He would have excused Capital Group’s failure to raise that delegation argument in the district court under the court’s recognized exceptions to forfeiture, since the question was purely legal and the record was fully developed, and would have sent the case to arbitration on that basis.