Troudt et al v. Oracle Corporation et al

Filing 179

ORDER RE: DEFENDANTS' MOTION FOR SUMMARY JUDGMENT. Defendants' Motion for Summary Judgment [# 134 ] is granted in part and denied in part as indicated in the attached Order. My Order Re: Plaintiffs' Motion for Class Certificatio n [# 119 ] is amended as indicated in the attached Order. The objections stated in Plaintiffs' Objections to Untimely Produced Documents Relied on by Defendants in Their Motion for Summary Judgment [#134] [# 155 ] are overruled. On 3 /18/2019, at 10:30 a.m. (MDT) counsel for the parties shall contact the court's administrative assistant at [phone] to schedule this matter for a combined Final Pretrial Conference and Trial Preparation Conference and trial. By Judge Robert E. Blackburn on 03/01/2019. (athom, )

IN THE UNITED STATE DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge Robert E. Blackburn
Civil Action No. 16-cv-00175-REB-SKC
DEBORAH TROUDT, et al., individually and as representatives of a class of plan
participants, on behalf of the Oracle Corporation 401(k) Savings and Investment Plan,
Plaintiffs,
v.
ORACLE CORPORATION, et al.,
Defendants.

ORDER RE: DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT
Blackburn, J.
The matters before me are (1) Defendants’ Motion for Summary Judgment
[#134],1 filed April 16, 2018; and (2) Plaintiffs’ Objections to Untimely Produced
Documents Relied on by Defendants in Their Motion for Summary Judgment
[#134] [#155], filed May 22, 2018. I overrule the objections. I grant the summary
judgment motion in part and deny it in part.2
I. JURISDICTION
I have jurisdiction over this matter pursuant to 28 U.S.C. § 1331 (federal
question) and 29 U.S.C. § 1132(e)(1) (action to enforce rights under ERISA).

1
“[#134]” is an example of the convention I use to identify the docket number assigned to a
specific paper by the court’s case management and electronic case filing system (CM/ECF). I use this
convention throughout this order.
2

The issues raised by and inherent to the motion for summary judgment are fully briefed,
obviating the necessity for evidentiary hearing or oral argument. Thus, the motion stands submitted on the
briefs. Cf. FED. R. CIV. P. 56(c) and (d). Geear v. Boulder Community Hospital, 844 F.2d 764, 766 (10th
Cir.), cert. denied, 109 S.Ct. 312 (1988).

II. STANDARD OF REVIEW
Summary judgment is proper when there is no genuine dispute as to any material
fact and the movant is entitled to judgment as a matter of law. FED. R. CIV. P. 56(a);
Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265
(1986). A dispute is “genuine” if the issue could be resolved in favor of either party.
Matsushita Electric Industrial Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586,
106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986); Farthing v. City of Shawnee, 39 F.3d
1131, 1135 (10th Cir. 1994). A fact is “material” if it might reasonably affect the outcome
of the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505,
2510, 91 L.Ed.2d 202 (1986); Farthing, 39 F.3d at 1134.
A party who does not have the burden of proof at trial must show the absence of
a genuine factual dispute. Concrete Works, Inc. v. City & County of Denver, 36 F.3d
1513, 1517 (10th Cir. 1994), cert. denied, 115 S.Ct. 1315 (1995). Once the motion has
been properly supported, the burden shifts to the nonmovant to show, by tendering
depositions, affidavits, and other competent evidence, that summary judgment is not
proper. Concrete Works, 36 F.3d at 1518. All the evidence must be viewed in the light
most favorable to the party opposing the motion. Simms v. Oklahoma ex rel.
Department of Mental Health and Substance Abuse Services, 165 F.3d 1321, 1326
(10th Cir.), cert. denied, 120 S.Ct. 53 (1999).
III. ANALYSIS
In this class action, plaintiffs, individually and as representatives of other
participants in the Oracle Corporation 401(k) Savings and Investment Plan (the “Plan”),

2

allege defendants breached their fiduciary duties in the management of the Plan, in
violation of the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C.
§1001 et. seq. The Plan is one of the largest in the country, with more than 65,000
participants and over $12 billion in assets. As a defined contribution plan, the Plan
allows participants to contribute up to 40% of their compensation to the Plan, which
Oracle matches. The Plan currently offers some 30 different investment options.
Defendant Oracle Corporation (“Oracle”) is a named fiduciary of the Plan and a
Plan administrator. Defendant Oracle Corporation 401(k) Committee (the “Committee”),
composed of Oracle employees (the individually named defendants in this suit), is also
a Plan fiduciary. In addition to its other duties, the Committee both monitors the fees
paid to Fidelity Management Trust Company (“Fidelity”), the designated recordkeeper
and trustee for the Plan, and guides the selection, monitoring, and removal and
replacement of Plan investments. Those decisions are informed by an Investment
Policy Statement (“IPS”) (see Motion App., Exh. A.4. at 267-273) and assisted by an
independent consultant, Mercer Investment Counseling (“Mercer”), which assists the
Committee in monitoring and managing the Plan’s investment options and costs.3
Before addressing the substance of plaintiffs’ claims, I first address their
evidentiary objections to certain evidence submitted in support of the summary
judgment motion and consider defendants’ statute of limitations arguments.
A. Evidentiary Objections

3

Oracle also employs full-time benefits personnel who assist the Committee and handle the
Plan’s day-to-day operation. Their salaries and operating and other costs are paid by Oracle, not by the
Plan.

3

Fact discovery in this case closed December 1, 2017. Plaintiffs object to seven
documents produced by defendants after that date which are appended to and
referenced in the motion for summary judgment. Specifically, these are
(1) A November 30, 2017, email to Peter Shott, Vice
President of Human Resources at Oracle Corporation, from
Troy Saharic, a consultant with Mercer Investment
Counseling (“Mercer”), discussing recordkeeping fees for
similar size plan sponsors (Motion App., Exh. C.1. [#13411] at 8-10);
(2) A February 2, 2018, email from Devon Muir of Mercer to
Mr. Shott detailing recordkeeping fees paid by other large
Fidelity clients (Motion App., Exh C.2. [#134-11] at 11-13);
(3) A February 8, 2018, email to Mr. Shott from Jim Pujats
of Fidelity offering to reduce the per-participant
recordkeeping fee from $28 to $27 (Motion App., Exh. C.3.
[#134-11] at 14-16);
(4) The Plan’s 2018 Participant Disclosure Notice provided
to Plan participants by Fidelity, as required by 29 C.F.R. §
2550.404a-5, created March 12, 2018 (Motion App., Exh.
A.1. [#134-2] at 10-25);
(5) A copy of Mercer’s February 14, 2018 “4th Quarter 2017
Investment Review” (Motion App., Exh. A.2 [#134-2] at 26107);
(6) A copy of the minutes for the November 8, 2017,
Committee meeting4 (Motion App., Exh. A.3. [#134-2] at
262-265); and
(7) A copy of a presentation entitled “Driving Value” given by
Mr. Pujats to members of the Committee on December 19,
2017 (Motion App., Exh. A.20. [#134-5] at 1-31).
As should be readily apparent from this list, all but one of these documents

4

This document, although reflecting events occurring shortly before the close of discovery, was
not created until March 5, 2018, after approval by the Committee at the February 14, 2018, meeting.
(See Def. Resp. to Obj. App., Exh. A ¶ 4 at 2.)

4

reflect events occurring after the close of discovery; the one exception is an email sent
the day before the discovery deadline. As a matter of simple, linear time it was not
possible for defendants to have produced these documents prior to the close of
discovery.
Thereafter, parties have a duty under Rule 26(e)(1) to timely supplement their
prior discovery disclosures, a duty about which plaintiffs specifically reminded
defendants not two weeks after the close of discovery. More specifically, plaintiffs
demanded defendants “supplement their production of Committee minutes and
materials that were prepared by the Committee or third parties in connection with the
meetings, including Mercer Investment Reviews. This would include materials prepared
after the May 10, 2017 meeting.” (Resp. to Obj. App., Exh. A.1. [#163-1 at 5].)
In compliance with this request and their duties under Rule 26, defendants
supplemented their responses in January (document #5 above), February (document #1
& #7 above), March (document #6 above), and April 2018 (document #2, #3, & #4
above). Plaintiffs do not object that these documents were not timely produced once
they were created or received by defendants, and I see no basis to conclude otherwise.
There thus is no basis to exclude this evidence under Rule 37(c)(1).
Plaintiffs objections based on hearsay and lack of foundation are wholly
conclusory and completely undeveloped. I am neither required nor inclined to guess at
the substance of such arguments. See Healthtrio, LLC v. Aetna, Inc., 2014 WL
5473739 at *7 (D. Colo. Oct. 29, 2014) (arguments which are “conclusory and
underdeveloped [do] not merit further consideration by the court”). Similarly, plaintiffs’

5

attempt to substantiate their arguments by way of their reply creates no inclination or
obligation on my part to address them. See White v. Chafin, 862 F.3d 1065, 1067 (10th
Cir. 2017); Hubbard v. Nestor, 2019 WL 339823 at *1 (D. Colo. Jan. 25, 2019).
Accordingly, I overrule plaintiffs’ objections and will consider the documents if
and where appropriate.
B. Statute of Limitations
In certifying this matter as a class action, I defined all three subclasses to
commence on January 1, 2009, noting it was premature to determine at that juncture
whether plaintiffs could establish facts sufficient to toll limitations. (See Order Re:
Plaintiffs’ Motion for Class Certification at 4-5 [#119], filed January 30, 2018.) I now
find and conclude plaintiffs have failed to adduce sufficient evidence in that regard.
Accordingly, any claim based on conduct occurring before January 22, 2010, is timebarred.
ERISA provides that
[n]o action may be commenced under this subchapter with
respect to a fiduciary's breach of any responsibility, duty, or
obligation under this part, or with respect to a violation of this
part, after the earlier of – (1) six years after (A) the date of
the last action which constituted a part of the breach or
violation, or (B) in the case of an omission the latest date on
which the fiduciary could have cured the breach or violation.
...
29 U.S.C. § 1113(1). This provision is a statute of repose, which ordinarily operates to
“extinguish a plaintiff's cause of action whether or not the plaintiff should have
discovered within that period that there was a violation or an injury.” Fulghum v.
Embarq Corp., 785 F.3d 395, 413 (10th Cir. 2015) (citation and internal quotation marks
6

omitted). However, Congress has provided an exception under which, “in the case of
fraud or concealment,” a civil enforcement action “may be commenced not later than six
years after the date of discovery of [the] breach or violation.” 29 U.S.C. § 1113. In
creating this exception, Congress “effectively restored the judicial doctrines of equitable
tolling and equitable estoppel to selected ERISA breach of fiduciary duty claims.”
Fulghum, 785 F.3d at 416.
Because the term “concealment” is not defined in ERISA,5 the court relies on the
ordinary meaning of the term at the time Congress enacted the statute. Id. at 415.
Thus, “concealment” is the withholding “of that which should have been disclosed, which
deceives and is intended to deceive another so that he shall act upon it to his legal
injury or when the defendant conceals the alleged breach of fiduciary duty.” Id.
Plaintiffs argue that this standard is met here because (1) the Plan’s 2009 IRS Form
5500 did not reveal the amount of Fidelity’s compensation; and (2) the Plan’s 2012
Participant Fee Disclosure represented that “no plan administrative fees were to be
deducted from accounts in the Plan.” Neither argument has traction.
Plaintiffs’ suggestion that the Plan’s Form 5500 did not report the amount of
Fidelity’s compensation is simply wrong. By directing the court to a single line in that
173-page document (see Resp. App., Exh. 68 [#154-69] at 5) – which itself
acknowledges the Plan paid Fidelity both direct and indirect compensation – plaintiffs
conveniently ignore the remainder of the document, which substantiates the amount of
“eligible indirect compensation,” including revenue-sharing, paid to Fidelity (see id. at 7-

5
Plaintiffs neither argue nor attempt to substantiate that defendants committed any type of fraud
sufficient to toll limitations under the statute.

7

173). Plaintiffs do not suggest or circumstantiate that the information therein provided
was inaccurate or that the Plan otherwise failed to provide any other information the
form required. There thus is no evidence of concealment. Moreover, the named
plaintiffs have acknowledged they never saw this form. (See Motion App., Exhs. B.5
[#134-10] at 39, B.6 [#134-10] at 45-47, B.7 [#134-10] at 52-53, B.8 [#134-10] at 59-60,
B.9 [#134-10] at 65-67, & B.10 [#134-10] at 72-73.) They can hardly have relied on or
been deceived by the form under those circumstances. See Jacobs v. Verizon
Communications, Inc., 2017 WL 8809714 at *15 (S.D.N.Y. Sept. 28, 2017).
The representation in the Participant Fee Disclosure that “no plan administrative
fees were to be deducted from accounts in the Plan” is similarly taken out of context,
and inaccurate in any event. The statement itself was made in a subparagraph
discussing direct deductions from individual accounts. As explained more fully below,
revenue-sharing is an alternative to such direct charges to Plan participants. Morever,
this language was included in a larger section entitled “Fees and Expenses,” which
addressed the type of fees to which participant accounts might be subject, including,
particularly, “asset-based fees,” and explained how such fees were calculated and paid.
(See Partial Opp. to Motion for Class Cert. App., Exh.A.3 [#107-1] at 46-47.)
Specifically, the document informed participants that “asset-based fees are reflected as
a percentage of assets invested in the option and often are referred to as an ‘expense
ratio.’” (Id. at 47.) The tables which followed then disclosed the expense ratios for each
of the investments offered by the Plan. (See id. at 48-52.) Plainly, these matters were
not concealed.

8

Finally, plaintiffs have offered no argument or evidence suggesting defendants
concealed anything related to the fiduciary breaches alleged in Count II, involving the
Plan’s allegedly improvident investments in several funds. Those claims, too, therefore
will be limited to matters occurring within six years of the date of the filing of this lawsuit.
Accordingly, I find ERISA’s statute of repose is applied properly here to limit
plaintiffs’ claims to matters occurring on or after January 22, 2010, six years prior to the
date the complaint was filed. Defendants’ motion for summary judgment is granted to
that extent. The class definitions approved in my Order Re: Plaintiffs’ Motion for
Class Certification will be amended to reflect this limitation.
C. ERISA claims
Under ERISA, plan participants, beneficiaries, and fiduciaries may “bring actions
on behalf of a plan to recover for violations of the obligations defined in [29 U.S.C. §
1109].” LaRue v. DeWolff, Boberg & Associates, Inc., 552 U.S. 248, 253, 128 S.Ct.
1020, 1024, 169 L.Ed.2d 847 (2008) (citing 29 U.S.C. § 1132(a)(2)). “The principal
statutory duties imposed on fiduciaries by [section 1109] relate to the proper
management, administration, and investment of fund assets, with an eye toward
ensuring that the benefits authorized by the plan are ultimately paid to participants and
beneficiaries.” Id., 128 S.Ct. at 1024 (citation and internal quotation marks omitted).
ERISA’s fiduciary's duties are derived from and informed by the common law of trusts,
Tibble v. Edison International, – U.S. –, 135 S.Ct. 1823, 1828, 191 L.Ed.2d 795
(2015), which are among the highest known to law, La Scala v. Scrufari, 479 F.3d 213,
219 (2nd Cir. 2007). Nevertheless, while “the law of trusts often will inform”

9

determination of issues under ERISA, it “will not necessarily determine the outcome of,
an effort to interpret ERISA's fiduciary duties.” Varity Corp. v. Howe, 516 U.S. 489,
497, 116 S.Ct. 1065, 1070, 134 L.Ed.2d 130 (1996).6
ERISA imposes on fiduciaries twin duties of loyalty and prudence. See 29
U.S.C.A. §§ 1104(a)(1)(A) & (B).7 See also Tussey v. ABB, Inc., 746 F.3d 327, 335
(8th Cir.), cert. denied, 135 S.Ct. 477 (2014). The burden is on plaintiffs to prove
defendants breached their fiduciary duties, resulting in losses to the Plan. Pioneer
Centres Holding Co. Employee Stock Ownership Plan & Truest v. Alerus
Financial, N.A., 858 F.3d 1324, 1337 (10th Cir. 2017), cert. dismissed, 139 S.Ct. 50,
(2018).
The duty of loyalty requires a fiduciary to “discharge his duties with respect to a
plan solely in the interest of the participants and beneficiaries and for the exclusive

6

As the Supreme Court explained,
[E]ven with respect to the trust-like fiduciary standards ERISA imposes,
Congress expect[ed] that the courts will interpret this prudent man rule
(and the other fiduciary standards) bearing in mind the special nature
and purpose of employee benefit plans, as they develop a federal
common law of rights and obligations under ERISA-regulated plans. . . .
In some instances, trust law will offer only a starting point, after which
courts must go on to ask whether, or to what extent, the language of the
statute, its structure, or its purposes require departing from common-law
trust requirements. And, in doing so, courts may have to take account of
competing congressional purposes, such as Congress' desire to offer
employees enhanced protection for their benefits, on the one hand, and,
on the other, its desire not to create a system that is so complex that
administrative costs, or litigation expenses, unduly discourage employers
from offering welfare benefit plans in the first place.

Variety Corp., 116 S.Ct. at 1070 (citations and internal quotation marks omitted).
7

Section 1104 imposes additional fiduciary duties not implicated in this matter. See 29 U.S.C.
§§ 1104(a)(1)(C) (duty to “diversify[] the investments of the plan so as to minimize the risk of large
losses”), 1104(a)(1)(D) (duty to act “in accordance with the documents and instruments governing the
plan”).

10

purpose of: (i) providing benefits to participants and their beneficiaries; and (ii) defraying
reasonable expenses of administering the plan.” 29 U.S.C. § 1104(a)(1)(A). Generally
speaking, this aspect of ERISA prohibits self-dealing and sales or exchanges between
the plan and “parties in interest” or “disqualified” persons. See 29 U.S.C. § 1106. See
also Massachusetts Mutual Life Insurance Co. v. Russell, 473 U.S. 134, 143 n.10,
105 S.Ct. 3085, 3091 n.10, 87 L.Ed.2d 96 (1985); Womack v. Orchids Paper
Products Co. 401(K) Savings Plan, 769 F.Supp.2d 1322, 1332 n.7 (N.D. Okla. 2011).
An ERISA fiduciary owes a duty also to plan participants and beneficiaries to
discharge his responsibilities using “the care, skill, prudence, and diligence under the
circumstances then prevailing that a prudent man acting in a like capacity and familiar
with such matters would use in the conduct of an enterprise of a like character and with
like aims[.]” 29 U.S.C.A. § 1104(a)(1)(B). The appropriate yardstick of a fiduciary’s duty
of prudence under ERISA “is not that of a prudent lay person, but rather that of a
prudent fiduciary with experience dealing with a similar enterprise.” Tibble v. Edison
International, 2017 WL 3523737 at *10 (C.D. Cal. Aug. 16, 2017) (citation and internal
quotation marks omitted). The prudent person standard is an objective one which
“focuses on the fiduciary's conduct preceding the challenged decision – not the results
of that decision.” Tussey, 746 F.3d at 335 (citation and internal quotation marks
omitted). Relatedly, “[b]ecause the fiduciary's obligation is to exercise care prudently
and with diligence under the circumstances then prevailing, his actions are not to be
judged from the vantage point of hindsight.” Chao v. Merino, 452 F.3d 174, 182 (2nd
Cir. 2006) (citations and internal quotation marks omitted). See also Osberg v. Foot

11

Locker, Inc., 138 F.Supp.3d 517, 552 (S.D.N.Y. 2015) (“A court should not find that a
fiduciary acted imprudently in violation of ERISA § 404(a)(1)(B) merely because, with
the benefit of hindsight, a different decision might have turned out better.”), aff'd, 862
F.3d 198 (2nd Cir. 2017). “[S]o long as the prudent person standard is met, ERISA does
not impose a duty to take any particular course of action if another approach seems
preferable.” Id. (citation and internal quotation marks omitted).
With those standards in mind, I turn to the specific claims asserted in this matter.
1. Recordkeeping Fees: Count I
Count I of the Amended Complaint focuses on the allegedly excessive fees the
Plan paid to Fidelity for its recordkeeping and other administrative services.8 Fidelity, an
industry leader in the market for providing such services, has served as the
recordkeeper and administrator for the Plan since 1993. Plaintiffs maintain the portion
of the fees paid to Fidelity for its recordkeeping services were excessive and that
defendants breached the duty of prudence by failing to monitor those expenses and/or
failing to put the Plan’s recordkeeping services out for competitive bidding. They further
claim defendants retained Fidelity as the recordkeeper despite these shortcomings to
advance Oracle’s other business relationships with Fidelity, thereby breaching their duty
of loyalty as well. I examine these issue in turn.
a. Duty of Prudence: Failure To Monitor or Negotiate Fees

8

Fidelity’s services to the Plan include, but are not limited to, effecting participants’ investment
transactions, tracking participant account holdings and balances, valuing Plan assets, transferring and
distributing funds, providing customer service to Plan participants, issuing quarterly statements and other
communications, maintaining a Plan website, and providing investor education tools and services. (See
Motion To Dismiss App., Exh. C [#36-3] at 23-25, 35-39.)

12

Plaintiffs first claim defendants failed to monitor the recordkeeping fees the Plan
paid to Fidelity, resulting in the payment of excessive fees. They focus particularly on
the recoupment of these fees by Fidelity through “revenue sharing.” Revenue sharing
describes an arrangement by which “mutual fund companies pay a portion of the fees
they charge investors – fees that are referred to as a fund's ‘expense ratio’ and that are
expressed as a percentage of a fund's assets” – to the Plan administrator.
Leimkuehler v. American United Life Insurance Co., 713 F.3d 905, 909 (7th Cir.
2013), cert. denied, 134 S.Ct. 1280 (2014). There is nothing suspect or improper
about revenue sharing per se; indeed, it has been described as “a common and
acceptable investment industry practice[] that frequently inure[s] to the benefit of ERISA
plans.” Tussey, 746 F.3d at 336.9 See also Hecker v. Deere & Co., 556 F.3d 575,
585 (7th Cir. 2009) (revenue sharing “violates no statute or regulation”), cert. denied,
130 S.Ct. 1141 (2010). However, plaintiffs maintain that allowing Fidelity to recoup
recordkeeping fees based on a percentage of the Plan’s assets, rather than on a fixed
per-participant amount, resulted in unwarranted and excessive increases to Fidelity’s
compensation as the Plan grew in size, without a corresponding increase in the services
rendered.
I find these allegations untenable. The Committee, together with representatives
of Mercer and Fidelity and outside counsel, met at least quarterly. Mercer produces
Quarterly Reports for the Plan which, among other things, report the expense ratios for

9

“Because a portion of a mutual fund's expense ratio is typically intended to cover the costs of
providing the participant-level services that the mutual fund would be furnishing if it were not for [the
administrator], the mutual funds are willing to pay some of these fees to [the administrator] as
compensation for [the administrator’s] provision of these services.” Leimkuehler, 713 F.3d at 909.

13

each fund in the Plan and show the administrative fees paid, both in total and on a perparticipant basis. (See Motion App., Exh. A.2. at 49.)10 Fidelity itself provided
benchmarking data in 2009, 2010, 2013, and 2016 showing, inter alia, the perparticipant recordkeeping fees paid to Fidelity, as well as how the total administrative
fees the Plan paid compared to those paid by comparable Fidelity clients. (See Motion
App., Exh. A.17 at 14,16; Exh. A.18 at 14-17; Exh. A.19 at 9-11; Exh. A.20 at 22-23.) In
addition, the Plan compared expense data reported in benchmarking surveys prepared
by Deloitte & Touche (Motion App., Exhs. A.8, A.9, A.10, A.11, A.15 at 10-15) and the
Silicon Valley Employee Forum (Motion App., Exhs. A.12, A.13, A.15).11
Plaintiffs argue these actions were insufficient because there is, they claim, little
evidence that the Committee ever specifically considered the fees paid to Fidelity on a
per-participant basis or requested Mercer perform an analysis of the reasonableness vel
non of Fidelity’s recordkeeping fees on a per-participant basis. Plaintiffs apparently
divine this fact from the absence of a specific mention of these issues or documents in
the minutes of the Committee’s meetings. However, they ignore testimony to the effect
that such information, in fact, was reviewed at every quarterly meeting, with no
expectation that such review necessarily would be reflected in the minutes. (See Reply
App., Exh. A.1 at 96-97 (“If that information [revenue sharing, expenses, per-participant

10

The fact that the Committee engaged Mercer, while not dispositive, is some evidence of
prudence in itself. See George v. Kraft Foods Global, Inc., 641 F.3d 786, 799-800 (7th Cir. 2011) (citing
cases).
11

Although plaintiffs argue the Committee was never provided with these documents (see Resp.
at 21), some of the very same testimony they cite in support of this proposition shows the Committee
was, at the least, made aware of the information they contained (see id., Exh. 1 at 49-50, 53-54; Exh. 2 at
132, 166; Exh. 48 at 36).

14

costs] is presented to the committee as part of its standard reporting, which it generally
is, that would not be noted in the minutes. . . . Minutes are topics of discussion and
decisions. . . . [T]he minutes are not a blow-by-blow recording of everything that occurs
in a committee meeting.”); id. at 98 (noting “an ongoing discussion about fees which
occurs at every meeting . . . It’s part of the conversation. . . . It’s reviewed every
quarter. . . .”).) Indeed, it appears abundantly clear the Committee regularly did
consider information regarding the Plan’s recordkeeping costs as a percentage of total
costs, a figure which declined during every year of the class period.12 Not
coincidentally, the per-participant costs also decreased significantly during this time; in
2017, it was $27 per participant. (Motion App., Exh. C ¶¶ 13-14 at 7.)13 No reasonable
jury could find anything imprudent in this decisionmaking process. If anything, it seems
exceptionally careful and well-informed. No reasonable jury could find otherwise.
For similar reasons, plaintiffs’ related assertion that the Committee was
imprudent in failing to negotiate Fidelity’s fees does not survive summary judgment.
Plaintiffs’ arguments regarding this aspect of their claim appear to be based on an
amorphous, but artificially narrow conception of what “negotiation” must look like.
Whatever plaintiffs feel may have been lacking in the manner by which the Plan secured
12

These figures were consistent also with those shown in other benchmarking reports for plans
of similar size. (See Motion App., Exh. A.8 at 20, 22; Exh. A.10 at 24-25; Exh. A.13 at 20-21; Exh. A.16
at 10; A.17 at 14, 16; Exh. A.19 at 8-10, 11; Exh. A.20 at 22-23.)
13

The Committee also took a number of other actions which reduced overall plan costs,
including specifically: making at least 57 fund replacements or share-class changes to the menu of
investment options available under the Plan; converting institutional investment options to lower-cost
share classes or versions of those funds, in most instances reducing or eliminating revenue sharing
payments to Fidelity; introducing lower-cost investment vehicles which did not provide revenue sharing at
all; and removing several Fidelity-managed options from the Plan and replacing them with non-Fidelity
funds which had lower expense ratios and paid no revenue sharing to Fidelity. (See Motion App., Exh.
C ¶¶ 5-8 at 2-4.)

15

price concessions from Fidelity related to the cost of its administrative services,14 the
evidence nevertheless demonstrates the Plan did receive significant concessions during
the class period. For example, in 2011, Oracle received an annual expense
reimbursement credit of $245,000 to offset administration costs. (Motion To Dismiss
App., Exh. C [#36-3] at 121.) The following year, the Plan and Fidelity replaced that
program with a revenue credit program under which it paid the Plan $4.4 million as a
revenue credit and agreed that in the future excess revenues would be credited back to
participant accounts on a pro rata basis. At the same time, the parties agreed to a perparticipant fee target of $30.15 (Motion To Dismiss App., Exh. C [#36-3] at 133-139;
Motion App., Exh. A.3 at 164, 167, 193; Exh. B.3 at 26; Exh. B.4 at 31; Exh. C ¶ 10 at
5.) In subsequent years, up through 2017, the Plan received an additional $8.9 million
from Fidelity under the revenue credit program. (See Motion To Dismiss App., Exh. C
at 142 (August 2013; $5.5 million), 159 (May 2014; $1.25 million); Motion App., Exh.
A.21 at 33 (April 2016; $900,00); Exh. A.22 at 35 (June 2017; $1.25 million).) In
addition, Oracle has obtained other fee waivers and cost reductions from Fidelity during
the class period. (See Motion App., Exh. C ¶ 11 at 5.)

14

The evidence to which plaintiff cites for this proposition is nothing more than a single
Committee member’s failure to recall whether the Committee ever, at any time, negotiated a fixed-rate
per-participant fee with Fidelity. (See Resp. App., Exh. 3 at 135.) Aside from the fact that a failure to
recall is an exceptionally thin reed on which to argue that “[a]t no time has any Plan fiduciary negotiated”
such an arrangement (Resp. at 5 (emphasis added)), it is belied by plaintiffs’ citation – in the same
paragraph – to evidence showing that Fidelity set a target fixed-rate per-participant fee in July 2012 (see
id. (citing Motion App., Exh. A.25 at 22)).
15

That figure was decreased to $28 in 2015. (Motion App., Exh. B.3 at 26.) Effective April 1,
2018, the Plan negotiated a flat-rate recordkeeping fee of $27 per participant, which is to be paid from the
Plan’s forfeiture reserves. Under that agreement, Fidelity also will rebate all revenue sharing it receives
back to the accounts of participants invested in funds paying revenue sharing. In other words,
participants no longer pay for recordkeeping services. (Motion App., Exh. C ¶ 11 at 5.)

16

Moreover, even if the Committee had failed in these respects, those failures
alone would be insufficient to create a genuine dispute for trial. Because the prudence
standard is an objective one, a trustee “is insulated from liability if a hypothetical prudent
fiduciary would have made the same decision anyway.” Tussey, 746 F.3d at 335. See
also Tatum v. RJR Pension Investment Committee, 761 F.3d 346, 366 (4th Cir. 2014)
(“[A] fiduciary who fails to ‘investigate and evaluate beforehand’ will not be found to
have caused a loss if the fiduciary would have made the same decision if he had
“‘investigat[ed] and evaluat[ed] beforehand.’”), cert. denied, 135 S.Ct. 2887 (2015)
(citation omitted; alterations in original); Fink v. National Savings & Trust Co., 772
F.2d 951, 962 (D.C. Cir. 1985) (Scalia, J., concurring in part and dissenting in part) (“It
is the imprudent investment rather than the failure to investigate and evaluate that is the
basis of suit; breach of the latter duty is merely evidence bearing upon breach of the
former[.]”). Thus, to get beyond summary judgment, plaintiffs would have to adduce
facts demonstrating that Fidelity’s recordkeeping fees were unreasonable compared to
what was available in the market, leading the Plan to suffer compensable losses. See
29 U.S.C. § 1109(a) (ERISA fiduciary “liable to make good to such plan any losses to
the plan resulting from each such breach . . .”); Brotherston v. Putnam Investments,
LLC, 907 F.3d 17, 30 (1st Cir. 2018) (loss is element of claim for breach of fiduciary duty
under ERISA), pet. for cert. filed (No. 18-926) (Jan. 11, 2019); Hart v. Group Short
Term Disability Plan For Employees of Cap Gemini Ernst & Young, 338 F.Supp.2d
1200, 1201 (D. Colo. 2004) (“[L]oss to the plan is an element of any claim under §
1109(a).”). See also Pioneer Centres Holding Co., 858 F.3d at 1337 (burden is on

17

plaintiff to prove losses to the plan).
This they cannot do. Plaintiffs’ evidence as to the purported unreasonableness
of Fidelity’s recordkeeping fees is premised on the expert opinion of Michael Geist, who
generated a table of what he claimed to be reasonable per-participant recordkeeping
fees for each year of the class period, to which he compared the fees paid by the Plan.
(Motion To Strike Expert App., Exh. B. [#126-2] ¶ 174 at 67.) However, because Mr.
Geist failed to disclose the methodology by which he derived these allegedly more
reasonable recordkeeping fees, the court struck these opinions. (See Order Re:
Motion To Exclude Proposed Expert Testimony of Michael Geist at 4-9 & ¶ 1 at 14
[#178], filed January 31, 2019.)
Plaintiffs thus have no evidence to suggest that defendants’ alleged lack of
prudence caused losses to the Plan. Absent such proof, these aspects of plaintiffs’
breach of fiduciary duty claim would fail even if the evidence substantiated an actual
lack of prudence on defendants’ part, which it does not. Accordingly, defendants are
entitled to summary judgment on this aspect of Count I.
b. Duty of Prudence: Failure To Bid Out Recordkeeping Services
Plaintiffs also seek to hold defendants liable for failing to put the Plan’s
recordkeeping services out to a competitive bidding process. According to Mr. Geist,
prudent fiduciaries typically solicit such “request for proposals” (“RFPs”) from vendors at
least once every three years. (See Motion To Strike Expert App., Exh. B [#126-2] ¶¶
59-69 at 23-28.) It is undisputed the Plan has not conducted an RFP in connection with
the administrative services provided by Fidelity.

18

While Mr. Geist’s opinion is some evidence that prudence requires regular resort
to an RFP, it seems somewhat myopic.16 For while “cost-conscious management is
fundamental to prudence,” Tibble v. Edison International, 843 F.3d 1187, 1198 (9th
Cir. 2016), ERISA requires fiduciaries to consider factors other than cost as well,
Sweda v. University of Pennsylvania, 2017 WL 4179752 at *8 (E.D. Pa. Sept. 21,
2017), appeal filed (No. 17-3244) (Oct. 13, 2017), and “nothing in ERISA requires
every fiduciary to scour the market to find and offer the cheapest possible fund (which
might, of course, be plagued by other problems),” Hecker, 556 F.3d at 586.
Yet here again, assuming arguendo Mr. Geist’s opinion on this matter is sufficient
to create a genuine dispute of material fact as to liability, without his further opinion that
less costly alternatives were available, plaintiffs have no evidence that the Plan could
have paid less for recordkeeping services than it did, and therefore that it suffered
compensable losses.17 Without such evidence of damages, this claim also must fail.
See Pioneer Centres Holding Co., 858 F.3d at 1334-35 (10th Cir. 2017) (“[A] breach of
fiduciary duty does not automatically equate to causation of loss and therefore liability
and consequently a fiduciary can only be held liable upon a finding that the breach
actually caused a loss to the plan[.]”)) (citation and internal quotation marks omitted).

16

Moreover, plaintiff’s citation to the Department of Labor’s 2010 interim rule regarding fee
disclosures actually undermines any suggestion that an RFP is the benchmark of prudence. As
defendants explain in reply (see Reply Br. at 7-8), the interim rules, ultimately adopted as regulations,
were enacted to enforce greater fee transparency from vendors to correct an “information asymmetry”
between plans and vendors and thus alleviate the need for plans to “shop for services” at regular intervals
simply to ensure that fees were reasonable. See 75 Fed. Reg. 41,600, 41,619-620 (July 16, 2010).
17

Plaintiffs’ argument that the Committee never solicited or received an opinion that Fidelity’s
fees were reasonable misapprehends the burden of proof. The Tenth Circuit has made abundantly clear
that the plaintiff in an ERISA breach of fiduciary duty suit “assume[s] the burden of proof on each element
of its claim.” Pioneer Centres Holding, 858 F.3d at 1337.

19

Defendants’ motion will be granted as to this aspect of Count I as well.
b. Duty of Loyalty
As noted above, ERISA fiduciaries also owe a duty of loyalty to participants and
beneficiaries, which requires they “discharge [their] duties with respect to a plan solely
in the interest of the participants and beneficiaries and for the exclusive purpose of
providing benefits to participants and their beneficiaries.” 29 U.S.C. § 1104(a)(1)(A)(I).
See also National Labor Relations Borad v. Amax Coal Co., 453 U.S. 322, 332-33,
101 S.Ct. 2789, 2795-96, 69 L.Ed.2d 672 (1981). Plaintiffs maintain defendants
breached this duty by allowing the Plan to pay allegedly excessive recordkeeping fees
in order to maintain a favorable business relationship with Fidelity, which was also a
customer of Oracle. There are at least two problems with this argument.
First, “a conflict of interest is not a per se breach: nowhere in the statute does
ERISA explicitly prohibit a trustee from holding positions of dual loyalties. Instead, in
order to prove a violation of the duty of loyalty, the plaintiff must go further and show
actual disloyal conduct.” In re Northrop Grumman Corp. Erisa Litigation, 2015 WL
10433713 at *28 (C.D. Cal. Nov. 24, 2015) (citation and internal quotation marks
omitted). Here, the disloyal conduct plaintiffs claim is the Committee’s alleged failure to
secure a lower recordkeeping fee for the Plan. As noted above, plaintiffs have failed to
prove that such was the case.
Second, the evidence plaintiffs have adduced shows merely that members of
Oracle’s sales team and various of its senior management – none of whom were
fiduciaries with respect to the Plan or are named defendants in this lawsuit – discussing

20

among themselves how to leverage Oracle’s business relationship with Fidelity. The
actions of such non-fiduciaries are irrelevant, however; the “threshold question” under
ERISA “is not whether the actions of some person employed to provide services under
a plan adversely affected a plan beneficiary's interest, but whether that person was
acting as a fiduciary (that is, performing a fiduciary function) when taking the action
subject to complaint.” Pegram v. Herdrich, 530 U.S. 211, 226, 120 S.Ct. 2143, 2155253, 147 L.Ed.2d 164 (2000). See also Hockett v. Sun Company, Inc. (R&M), 109
F.3d 1515, 1522 (10th Cir. 1997) (“[N]ot all of an employer's business activities implicate
ERISA's fiduciary duties.”). Although the sales team’s efforts occasionally led to
requests for information from the Plan, there is absolutely no evidence of any directives,
suspect or otherwise, flowing back from the sales team or senior management to the
Plan. At best, plaintiffs can say only that Committee members were “aware” of Oracle
and Fidelity’s business relationship. (Resp. Br. at 8.) To draw any further, more
sinister, conclusion would be nothing more than rank speculation, and is therefore
insufficient to create a genuine dispute fo material fact for trial. Summary judgment is
appropriate as to this final iteration of Count I as well.
2. Improvident Investments: Count II
Count II attacks the Plan’s selection and retention of three investment options –
the Artisan Small Cap Value Fund (the “Artisan Fund”), offered from 2005 to June 2015;
the TCM Small-Mid Cap Growth Fund (the “TCM Fund”), offered from November 2009
to April 2013; and the PIMCO Inflation-Response Multi-Asset Fund (the “PIMCO Fund”),
included in the plan since 2012. Plaintiffs maintain the Plan failed to engage in a

21

prudent process for selecting and retaining these particular funds. More particularly,
plaintiffs allege the TCM Fund had an inadequate performance record to warrant its
inclusion in the Plan and that all three funds were improvidently retained even after they
consistently and dramatically underperformed their benchmarks.
An ERISA fiduciary’s duty of prudence contemplates an ongoing obligation to
monitor the Plan’s investments and remove imprudent ones. See Pension Benefit
Guaranty Corp. ex rel. Saint Vincent Catholic Medical Centers Retirement Plan v.
Moran Stanley Investment Management, Inc., 712 F.3d 705, 716-17 (2nd Cir. 2013).
See also Tibble, 843 F.3d at 1197 (fiduciary “has a continuing duty to monitor trust
investments and remove imprudent ones . . . separate and apart from the trustee’s duty
to exercise prudence in selecting investments at the outset”); Armstrong v. LaSalle
Bank National Association, 446 F.3d 728, 734 (7th Cir. 2006) (“A trustee who simply
ignores changed circumstances that have increased the risk of loss to the trust's
beneficiaries is imprudent.”). In determining whether a fiduciary has breached this duty,
the court must consider the totality of the circumstances. In re General Growth
Properties, Inc., 2010 WL 1840245 at *6 (N.D. Ill. May 6, 2010). The prudence of each
investment is not assessed in isolation but, rather, as the investment relates to the
portfolio as a whole. Pension Benefit Guaranty Corp., 712 F.3d at 716-17; California
Ironworkers Field Pension Trust v. Loomis Sayles & Co., 259 F.3d 1036, 1043 (9th
Cir. 2001); Laborers National Pension Fund v. Northern Trust Quantitative
Advisors, Inc., 173 F.3d 313, 322 (5th Cir.), cert. denied, 120 S.Ct. 406 (1999).
This duty is one of prudence, not prescience, see Pension Benefits Guaranty

22

Corp., 712 F.3d at 716, and “a named fiduciary is not required to ensure the
performance of a given plan investment,” DiFelice v. US Airways, Inc., 397 F.Supp.2d
758, 773 (E.D. Va. 2005). Hindsight, therefore, is to be avoided. The court “cannot
rely, after the fact, on the magnitude of the decrease in the [investment's] price; rather,
[it] must consider the extent to which plan fiduciaries at a given point in time reasonably
could have predicted the outcome that followed.” In re Citigroup ERISA Litigation,
662 F.3d 128, 135 (2nd Cir. 2011), cert. denied, 133 S.Ct. 475 (2012), abrogated on
other grounds by Fifth Third Bancorp v. Dudenhoeffer, 573 U.S. 409, 134 S.Ct.
2459, 189 L.Ed.2d 457 (2014).
Instead, the court should “focus on a fiduciary's conduct in arriving at an
investment decision” and “ask whether a fiduciary employed the appropriate methods to
investigate and determine the merits of a particular investment,” In re Unisys Savings
Plan Litigation, 74 F.3d 420, 434 (3rd Cir.), cert. denied, 117 S.Ct. 56 (1996).
Compliance with this duty requires a fiduciary, at a minimum, “to examine the
characteristics of an investment, including its risk characteristics and its liquidity, to
ensure that it is an appropriate plan investment, and that it is in the best interests of the
plan participants.” DiFelice, 397 F.Supp.2d at 773. See also 29 C.F.R. § 2550.404a1(b)(2)(I) (fiduciary discharges investment duties prudently when he “[h]as given
appropriate consideration to those facts and circumstances that, given the scope of
such fiduciary's investment duties, the fiduciary knows or should know are relevant to
the particular investment or investment course of action involved, including the role the
investment or investment course of action plays in that portion of the plan's investment

23

portfolio with respect to which the fiduciary has investment duties.”). Moreover, the
fiduciary should “systematic[ally] conside[r] all the investments of the trust at regular
intervals to ensure that they are appropriate.” Tibble, 843 F.3d at 1197 (citations and
internal quotation marks omitted; alterations in original).
a. Structure of the Plan’s investment portfolio
Given these standards, I look first at the general makeup and management of the
Plan’s investment portfolio. As of March 2018, the Plan provided 32 variable return
investment options in four broad categories.18 Participants are provided information
regarding the one, five, and ten year average annual total return of each option, as well
as its annual gross expense ratio and whether the fund imposes restrictions on
excessive trading or other types of restrictions. (Motion App., Exh. A.2 [#134-2] at 1520.)
The Committee makes investment decisions for the Plan pursuant to the IPS,
which articulates a number of qualitative and quantitative performance standards and
sets out procedures whereby funds that fail to meet them may be placed on a “watchlist”
and subject to “additional due diligence to determine the ongoing suitability of the
option.” Nevertheless, the Committee retains discretion to “retain an investment option
whose performance falls outside of the performance standards or remove or change an
investment option that satisfies all standards, if the committee concludes that such
circumstances exist which would warrant such action.” (See Motion App., Exh. A.4
[#134-2] at 272-273.)

18
Additional investment options, which are not monitored by the Plan, are available through
Fidelity’s brokerage window.

24

As noted previously, the Committee relies on assistance and advice from its
independent consultant, Mercer, to monitor and manage the Plan’s investments.
Mercer provides the Committee with quarterly reports and participates in and presents
at every quarterly meeting, reviewing the performance of investments relative to
benchmarks, assessing market trends effecting the Plan, and addressing potential
changes in the investment lineup. From 2009 to 2017, the Committee made at least 57
fund replacements or share-class changes to the menu of investment options available
to Plan participants. (See Motion App., Exh. C ¶¶ 5-8 at 3-5, ¶ 13 at 7.)
Given that background, I now examine each of the three specifically challenged
funds.
b. The PIMCO Fund
I previously refused to certify a class related to the PIMCO Fund, noting that no
named class representative had invested in that fund. (See Order Re: Plaintiffs’
Motion for Class Certification at 14-15 [#119], filed January 30, 2018). An ERISA
plan participant and beneficiary has standing to file suit only insofar as he seeks “to
recover benefits due to him under the terms of his plan . . .” Yarbary v. Martin, 643
Fed. Appx. 813, 816 (10th Cir. April 1, 2016) (quoting 29 U.S.C. § 1132(a)(1)). The
plaintiff therefore must establish individual standing by asserting a direct injury. See
Loren v. Blue Cross & Blue Shield of Michigan, 505 F.3d 598, 608-09 (6th Cir. 2007)
(citing cases).
Plaintiffs have failed to do so here, either for themselves individually or for the
class as a whole. Indeed, plaintiffs essentially concede this argument by failing to

25

address it at all in response to the motion for summary judgment. I therefore grant the
motion insofar as it implicates the PIMCO Fund.
c. The Artisan Fund and the TCM Fund
As for the other two funds plaintiffs challenge – the Artisan Fund and the TCM
Fund – although defendants have presented voluminous and arguably compelling
evidence suggesting they undertook thorough, informed, and reasonable approaches in
deciding both whether to invest in these funds initially and whether and when to divest
once they began to underperform, the expert opinions of Gerald Buetow are to the
contrary. Defendants have not challenged these opinions, and they are sufficient to
create genuine disputes of material fact for trial. (See Resp. App., Exh. 72 [#154-73].)19
Nevertheless, because I have found that any claim accruing before January 22,
2010, is time-barred, plaintiffs’ claim implicating the allegedly imprudent decision to
include the TCM Fund in the Plan may not proceed. An ERISA claim must be brought
within six years of “ the last action which constituted a part of the breach or violation.”

19

It seems resolution of this issue may come down to whether the Committee was prudent to rely
on the advice of its independent consultant, Mercer. While obtaining and following such advice “is
certainly evidence of prudence, it is not sufficient to entitle defendants to judgment as a matter of law.”
George, 641 F.3d at 799. See also Gregg v. Transportation Workers of America International, 343
F.3d 833, 843 (6th Cir. 2003) (“Independent expert advice is not a ‘whitewash[.]’”) (citation omitted);
Bussian v. RJR Nabisco, Inc., 223 F.3d 286, 301 (5th Cir. 2000) (“ERISA] fiduciaries may not . . . rely
blindly on [expert] advice.”) Donovan v. Cunningham, 716 F.2d 1455, 1474 (5th Cir. 1983) (“An
independent appraisal is not a magic wand that fiduciaries may simply waive over a transaction to ensure
that their responsibilities are fulfilled.”), cert. denied, 104 S.Ct. 3533 (1984). Instead,
[a] determination whether a fiduciary's reliance on an expert advisor is
justified is informed by many factors, including the expert's reputation and
experience, the extensiveness and thoroughness of the expert's
investigation, whether the expert's opinion is supported by relevant
material, and whether the expert's methods and assumptions are
appropriate to the decision at hand.
Bussian, 223 F.3d at 301.

26

29 U.S.C. § 1113(1)(A). Here, the alleged breach was the inclusion of the TCM Fund in
the Plan. That decision was consummated in November 2009.20 It therefore is timebarred. However, plaintiffs’ further challenge to the allegedly imprudent decision to
retain the TCM Fund despite its poor performance implicates events which occurred
after the limitations accrual date. That much of their claim implicating the TCM Fund
therefore remains viable.
Accordingly, I grant the motion for summary judgment as to Count II insofar as it
implicates the initial decision to include the TCM Fund in the Plan. The motion as to this
count is denied as to allegations implicating the Artisan Fund and the decision to retain
the TCM Fund.
3. Derivative Claims: Counts III & IV
Counts III and IV are derivative of the first two counts. In Count III, plaintiffs
allege Oracle failed to adequately monitor the actions of other plan fiduciaries, by (1)
failing to ensure the Committee employed a prudent process for evaluating the Plan’s
recordkeeping fees; and (2) failing to recognize the breach of fiduciary duty caused by
the selection and retention of poor-performing investment options. Count IV contends
that by engaging Fidelity for unreasonable compensation and offering imprudent
investments, defendants caused the Plan to directly or indirectly furnish services to a
party in interest, in violation of 29 U.S.C. § 1006(a)(1)(C), and/or to transfer Plan assets

20

This fact distinguishes this case from the decision in Tussey v. ABB, Inc., 746 F.3d 327 (8th
Cir. 2014), which plaintiffs cite for the proposition that the last operative fact occurs when the assets of a
former fund are “mapped” onto the new, allegedly imprudent, one. See id. at 337. The case makes no
such broad pronouncement. Instead, the court there was addressing a claim specifically related to the
mapping of Plan assets from a prior investment onto a new one. Plaintiffs’ claim related to the TCM Fund
focuses instead on the actual selection of that investment for inclusion in the Plan, an action which was
completed prior to the operative limitations date in this case.

27

to a party in interest, in violation of 29 U.S.C. § 1106(a)(1)(D).
To the extent these claims are based on allegations that the Plan’s
recordkeeping fees were excessive, they fail together with the substantive claim in
Count I. The motion for summary judgment will be granted as to those aspects of these
claims. Summary judgment likewise is appropriate insofar as these claims are
premised on the allegedly imprudent investment in the PIMCO Fund and the timebarred aspect of the claim related to the TCM Fund alleged in Count II.
Insofar as Count III is based on the allegedly imprudent investment in the Artisan
Fund and the allegedly imprudent retention of the TCM Fund, defendants argue only
that the claim fails for the same reasons as its substantive counterpart in Count II. As I
have denied summary judgment as to these aspects of Count II, this argument is moot.
The motion therefore will be denied as to Count III to the extent that claim is based on
the investment in the Artisan Fund and the non-time-barred aspects the claim
implicating the TCM Fund.
Count IV alleges a “prohibited transaction” claim. Section 1106(a)(1)(D) of
ERISA provides that a fiduciary “shall not cause the plan to engage in a transaction, if
he knows or should know that such transaction constitutes a direct or indirect . . .
transfer to, or use by or for the benefit of a party in interest, of any assets of the plan.”
29 U.S.C. § 1106(a)(1)(D). ERISA defines a “party in interest” as one who “provid[es]
services” to an ERISA plan. 29 U.S.C. § 1002(14)(B).
In response to defendants’ motion for summary judgment, plaintiffs focus
exclusively on the fee claims alleged in Count I, as to which summary judgment is
appropriate, and argue that Fidelity constitutes the “party in interest.” (See Plf. Resp. at
28

25-26.) They fail to address, much less explain, how any Plan fiduciary engaged in a
prohibited transaction with respect to the decisions to retain the Artisan Fund or the
TCM Fund. There is no evidence suggesting that Fidelity was involved with either of
those decisions or has control of or interests in those funds. The funds themselves are
not parties in interest under ERISA. See 29 U.S.C. § 1002(21)(B).21 Because plaintiffs
have failed to raise a genuine dispute of material fact, I grant defendants’ motion for
summary judgment as to this claim.
IV. CONCLUSION
For the reasons set forth herein, I grant defendants’ motion for summary
judgment in part and deny it in part. Based on those rulings, I perceive the claims
remaining for determination at trial are (1) the allegedly imprudent investment in the
Artisan Fund (Count II); (2) the allegedly imprudent retention of the TCM Fund (Count
II); (3) the alleged failure to monitor the breach of fiduciary duty in the retention of these
two allegedly imprudent investments. All other claims in this suit will be dismissed with
prejudice.
V. ORDERS
THEREFORE, IT IS ORDERED as follows:
1. That Defendants’ Motion for Summary Judgment [#134], filed April 16,
2018, is granted in part and denied in part, as follows:
a. That the motion is granted with respect to the following claims:
(1) Count I;

21

Nor is there either evidence or argument to suggest that Mercer might be considered a party in

interest.

29

(2) Count II insofar as it is based on the allegedly imprudent
investments in the PIMCO Fund and the decision to include the
TCM Fund in the Plan;
(3) Count III insofar as it is based on the allegations of Count I and
on the allegedly imprudent investment in the PIMCO Fund and the
decision to include the TCM Fund in the Plan alleged in Count II;
and
(4) Count IV; and
b. That in all other respects, the motion is denied;
2. That the following claims are dismissed with prejudice:
a. Count I;
b. Count II insofar as it is based on the allegedly imprudent investments in
the PIMCO Fund and the decision to include TCM Fund;
c. Count III insofar as it is based on the allegations of Count I and on the
allegedly imprudent investments in the PIMCO Fund and the decision to
include the TCM Fund in the Plan alleged in Count II; and
d. Count IV;
3. That at the time judgment enters, judgment with prejudice shall enter on
behalf of defendants, Oracle Corporation; Oracle Corporation 401(k) Committee; Gayle
Fitzpatrick; John Gawkowski; Dan Sharpley; Peter Shott; Mark Sunday; and Amit
Zavery, and against plaintiffs, Deborah Troudt; Brad Stauf; Susan Cutsforth; Wayne
Seltzer; Michael Harkin; Miriam Wagner; and Michael Foy, individually and as
representatives of a class of plan participants, on behalf of the Oracle Corporation
30

401(k) Savings and Investment Plan, as to the following claims:
a. Count I;
b. Count II insofar as it is based on the allegedly imprudent investments in
the PIMCO Fund and the decision to include the TCM Fund in the Plan;
c. Count III insofar as it is based on the allegations of Count I and on the
allegedly imprudent investments in the PIMCO Fund and the decision to
include the TCM Fund alleged in Count II; and
d. Count IV;
3. That my Order Re: Plaintiffs’ Motion for Class Certification [#119], filed
January 30, 2018, is amended as follows:
a. That the certification of the “Excessive Fee Class” (see Order ¶ 2(1) at
17) is vacated;
b. That the definitions of the “Imprudent Investment Class A (Artisan
Fund)” (id. ¶ 2(2) at 18) and the “Imprudent Investment Class B (TCM
Fund)” (see id. ¶ 2(3) at 18) are amended, as follows:
(1) Imprudent Investment Class A (Artisan Fund): All Plan
participants and beneficiaries, excluding defendants, who invested
in the Artisan Fund between January 22, 2010, and June 22, 2015,
and whose investment in the Fund underperformed relative to the
Russell 2000 Index; and
(2) Imprudent Investment Class B (TCM Fund): All Plan
participants and beneficiaries, excluding defendants, who invested
in the TCM Fund between January 22, 2010, and April 8, 2013, and
whose investment in the Fund underperformed the Russell 2500
Growth Index;
4. That the objections stated in Plaintiffs’ Objections to Untimely Produced

31

Documents Relied on by Defendants in Their Motion for Summary Judgment
[#134] [#155], filed May 22, 2018, are overruled; and
5. That on March 18, 2019, at 10:30 a.m. (MDT) counsel for the parties shall
contact the court’s administrative assistant at [phone] to schedule this matter for
a combined Final Pretrial Conference and Trial Preparation Conference and trial.
Dated March 1, 2019, at Denver, Colorado.
BY THE COURT:

32