Kendall et al v. Pharmaceutical Product Development, LLC
ORDER - The court GRANTS in part and DENIES in part defendants' motion to dismiss for failure to state a claim [D.E. 19], and GRANTS defendants' motion to dismiss plaintiffs' request for injunctive relief [D.E. 19]. Whether plaintiffs' remaining claims will survive a motion for summary judgment is an issue for another day. Signed by District Judge James C. Dever III on 3/31/2021. (Sellers, N.)
IN TIIE UNITED STATES DISTRICT COURT
FOR TIIE EASTERN DISTRICT OF NORTH CAROLINA
KARL KENDALL, SUZANNE RAlNEY,
and VINCENZO PERNICE,
DEVELOP:MENT, LLC, et al.,
On April 15, 2020, Karl Kendall, Suz.aime Rainey, and Vincenzo Pernice (collectively,
''plaintiffs") filed a complaint against Pharmaceutical Product Development, LLC ("PPD"), the
Board of Directors_ of PPD (the "Board"), the Benefits Administrative Committee (the
"Committee''), and John Does 1-30 (collectively, "defendants") [D.E. 1]. Plaintiffs allege that the
Committee breached its fiduciary duties of loyalty and prudence under section 404(a) of the
Employee Retirement Income Security Act of 1974 ("BRISA"), 29 U.S.C. § 1104(a) (count one),
and that PPD and the Board breached their duty to monitor the Committee (count two). See id. On
July 31, 2020, pursuant to Federal Rules of Civil Procedure 12(b)(l) and (b)(6), defendants moved
to dismiss the complaint [D.E. 19], and filed a memorandum in support [D.E. 20]. On August 21,
2020, plaintiffs responded in opposition [D.E. 21]. On September 4, 2020, defendants replied [D.E.
22]. As explained below, the court grants in part and denies in part defendants' motion to dismiss,
dismisses a portion of the claims, and dismisses plaintiffs' request for injunctive relief.
This putative class action concerns defendants' selection and maintenance of inves1ment
options in the PPD Retirement Savings Plan (the "Plan"). See Compl. [D.E. 1]. PPD is a leading
global contract research organization and pharmaceutical product development company based in
WUmington, North Carolina. See id. ,r,r 18-19. PPD sponsors the Plan-a defined contribution,
individual account plan under BRISA§ 3(34), 29 U.S.C. § 1002(34)-for eligible employees. See
id. ff 18, 33-3S. Employees make pre- and post- tax contributions to individual accounts, and PPD
makes matching contributions. See id. ,r,r 33-41. Between 2014 and 2020 (the "Class Period"), the
Plan offered participants various inves1ment options. See id. ,r 43.
PPD is the named fiduciary responsible for admjnjstering the Plan. See id. ,r,r 20-24. PPD,
acting through the Board, delegated fiduciary responsibilities for selection and retention ofthe Plan's
inves1ment options to the Committee. See id. ,r,r 2S-31. The Plan's recordk:eeper is Massachusetts
Mutual Life Insurance Company ("Mass Mutual"). See id.
Recordk:eeping consists of
amnmistrative tasks including claims processing, loan processing, disclosures, participant education,
and other consulting services. See id.
Plaintiffs are former employees of PPD who allege they participated in the Plan during the
Class Period. See id.
ff 13-1S. Plaintiffs admit that they lack knowledge of defendants'
decisionmaldng process with respect to the Plan. See id. ,r 17. Nonetheless, plaintiffs allege that
defendants ''failed to have a proper system of review in place to ensure that participants in the Plan
were being charged appropriate and reasonable fees for the Plan's inves1ment options." Id. ,r 63.
Plaintiffs also allege that defendants failed to leverage the size of the Plan to negotiate for lower
expense ratios for certain inves1ment options maintained or added to the Plan during the Class Period
and lower recordk:eeping and admjnjstrative fees. See id. Pursuant to BRISA sections 409 and S02,
29 U.S.C. §§ 1109 and 1132, plaintiffs bring a class action on behalf of all participants and
beneficiaries ofthe Plan during,the Class Period against defendants in their :fiduciary capacities. See
id. ft 1, 47-53.
Plaintiffs allege that the Committee breached its :fiduciary duties in failing to investigate and
select lower cost alternative funds including (1) lower fee share classes, (2) separate accounts or
collective trusts as alternatives to mutual funds, and (3) passively-managed funds over activelymanaged funds. See id. ft 76-112. Plaintiffs also allege that the Committee breached its fiduciary
duties in failing to monitor record.keeping fees. See id. ft 113-31, 135. Count one alleges that the
Committee breached its :fiduciary duties ofloyalty and prudence under ERISA § 404(a), 29 U.S.C.
§ 1104(a). See id. ft 132-38. Count two alleges that PPD and the Board breached their derivative
duty to monitor the Committee. See id. ft 139-45. Plaintiffs seek, among other things, monetary
and injunctive relief.
A motion to dismiss under Rule 12(b)(6) tests the complaint's legal and factual sufficiency.
See Ashcroft v. Iqbal, 556 U.S. 662, 677-80 (2009); Bell Atl. Corp. v. Twombly, 550 U.S. 544,
554-63 (2007); Coleman v. Md. Court of Ap_peals, 626 F.3d 187, 190 (4th Cir. 2010), aff'd, 566
U.S. 30 (2012); Giarratano v. Johnson, 521 F.3d 298,302 (4th Cir. 2008). To withstand a Rule
12(b)(6) motion, a pleading "m.ust contain sufficient factual matter, accepted as tme, to state a claim
to relief that is plausible on its face." Iqbal, 556 U.S. at 678 (quotation omitted); see Twombly, 550
U.S. at 570; Giarratano, 521 F.3d at 302. In considering the motion, the court must construe the
facts and reasonable inferences "in the light most favorable to [the nonmoving party]." Massey v.
Ojaniit, 759 F.3d 343, 352 (4th Cir. 2014) (quotation omitted); see Clatterbuck v. City of
Charlottesville, 708 F.3d 549, 551 (4th Cir. 2013), abrogated on other grounds by Reed v. Town of
Gilbm, 576 U.S. 155 (2015). A court need not accept as tme a complaint's legal conclusions,
''unwarranted inferences, unreasonable conclusions, or arguments." Giarratano, 521 F.3d at 302
(quotation omitted); see Iqbal, 556 U.S. at 678-79. Rather, a plaintiff's factual allegations must
"nudge [his] claims," Twombly. 550 U.S. at 570, beyond the realm of ''mere possibility'' into
''plausibility." Iqbal, 556 U.S. at 678-79.
When evaluating a motion to dismiss, a court considers the pleadings and any materials
"attached or incorporated into the complaint." B.I. du Pont de Nemours & Co. v. Kolon Indus., Inc.,
637F.3d435,448(4thCir.2011); seeFed.R Civ. P. lO(c);Goinesv. ValleyCmty. Servs.Bd., 822
F.3d 159, 165--66 (4th Cir. 2016); Thompson v. Greene, 427F.3d263, 268 (4th Cir. 2005). A court
also may consider a document submitted by a moving party if it is "integral to the complaint and
there is no dispute about the document's authenticity'' without converting the motion into one for
~nmmary judgment. Goines, 822 F.3d at 166. "[I]n the event of conflict between the bare
allegations of the complaint and any exhibit attached ... , the exhibit prevails." Id. (quotation
omitted); see Fayetteville In.vs. v. Com. Builders, Inc., 936 F.2d 1462, 1465 (4th Cir. 1991).
Additionally, a court may take judicial notice ofpublic records. See, e.g., Fed. R Bvid. 201; Tellabs,
Inc. v. Makor Issues & Rts., Ltd., 551 U.S. 308, 322 (2007); Philips v. Pitt Cnty. Mem'l Hosp., 572
F.3d 176, 180 (4th Cir. 2009).
In count one, plaintiffs allege that the Committee breached its duty ofprudence by failing to
investigate and select lower cost alternative funds. See Compl. [D.B. 1] ,r,r 76-112, 135. BRISA
seeks to protect beneficiaries of employee benefit plans. See Pension Benefit. Guar. Corp. ex rel.
St. Vincent Cath. Med. Ctrs. Ret. Plan v. Morgan Stanley Inv. Mgmt. Inc., 712 F.3d 705, 715 (2d
Cir. 2013); DiFelice v. U.S. Airways, Inc., 497 F.3d 410, 417 (4th Cir. 2007). Thus, "[a]n BRISA
fiduciary must act with the care, skill, prudence, and diligence that a prudent person acting in a like
capacity and familiar with such matters would use." Tibble v. Edison Int'l, 575 U.S. 523, 523 (2015)
(quoting 29 U.S.C. § 1104(a)(l)); see Fifth Third Bancorp v. Dudenhoeffer, 573 U.S. 409, 419
(2014). The fiduciary duty ofprudence "derive[s] from the common law oftrusts." Tibble, 575 U.S.
at 523 (quotation omitted); Cent. States, Se. & Sw. Areas Pension Fund v. Cent. Transp., Inc., 472
U.S. 559, 570 (1985); see Sweda v. Univ. of Penn., 923 F.3d 320, 327 (3d Cir. 2019); St. Vincent,
712 F.3d at 716.
Under the duty of prudence, an BRISA fiduciary must consider ''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." 29
C.F.R. § 2550.404a-l(b)(l)(i); see Stegemann v. Gannett Co., 970 F.3d 465,473 (4th Cir. 2020).
Fiduciaries also must investigate and review options for an BRISA plan's assets, considering not
only ''the merits of a transaction, but also ... the thoroughness of the investigation into the merits
ofthat transaction." Stegemann, 970 F.3d at 474 (alterations and quotations omitted); DiFelice, 497
F.3d at 418. An adequate investigation of existing investments considers whether any of the plan's
investments are "improvident'' or if a "superior alternative investment'' exists. St. Vincent, 712 F.3d
at718-19; seeTibble, 575U.S. at523; Stegemann, 970F.3dat473 &n.7; Sweda, 923 F.3dat328.
Moreover, a fiduciary must account for changed circumstances that increase risk of loss. See St.
Vincent, 712 F.3d at 717.
A fiduciary breaches its duty of prudence when it ''fail[s] to properly monitor investments
and remove imprudent ones." Tibble, 575 U.S. at 523. The elements of an BRISA breach of
fiduciary duty claim are "(1) a plan fiduciary (2) breaches an BRISA-imposed duty (3) causing aloss
to the plan." Sweda, 923 F.3dat328; seeMeinersv. WellsFargo&Co., 898F.3d820, 822(8thCir.
2018). For purposes of their motion to dismiss, defendants do not contest the first and third
elements. Thus, the court considers whether plaintiffs have plausibly alleged that the Committee
breached its fiduciary duties of loyalty and prudence.
In determining whether a fiduciary has acted prudently, a court examines the fiduciary's
conduct "under the circumstances then prevailing." 29 U.S.C. § 1104(a)(l)(B); see Dudenhoeffer,
573 U.S. at415; Tatum v. RJRPensionlnv. Comm., 761 F.3d346, 358 (4th Cir. 2014); St. Vincent,
712 F.3d at 716. Courts do not measure a fiduciary's prudence using 20/20 hindsight. See T ~
761 F.3d at 369; St. Vincent, 712 F.3d at 716 ("We cannot rely, after the fact, on the magnitude of
the decrease in the relevant investment's price; rather, we must consider the extent to which plan
fiduciaries at a given point in time reasonably could have predicted the outcome that followed.")
(alterations, citation, and quotations omitted); DiFelice, 497 F.3d at 424. The inquiry must be
"context specific." Dudenhoeffer, 573 U.S. at 425.
In evaluating prudence, "a court must ask whether the fiduciary engaged in a reasoned
decisionmaldng process" consistent with a ''prudent man" acting in a like capacity. DiFelice, 497
F.3d at 420; see Pfeil v. State St. Bank & Tr. Co., 806 F.3d 377, 384 (6th Cir. 2015); Tatum, 761
F.3d at 358. Such process considers ''the appropriate methods to investigate the merits of the
investment and to structure the investment." Pfeil, 806 F.3d at 384. A fiduciary ''may breach his
duties ... by failing to investigate and evaluate the merits of his investment decisions." DiFelice,
497 F.3d at 410 (citation and quotation omitted). The appropriate inquiry focuses on the process that
the fiduciary used to make the challenged decision, not the results of the decision. See Tussey v.
ABB. Inc., 746F.3d327, 335 (8th Cir. 2014); St. Vincent, 712 F.3dat 716 (fiduciary duties require
''prudence, not prescience") (quotation omitted). A fiduciary can discharge procedural prudence
through actions including, for example, "appointing an independent fiduciary, seeking outside legal
and financial expertise, holding meetings to ensure fiduciary oversight of the investment decision,
and continuing to monitor and receive regular updates on the investment's performance." Tamm,
761 F.3d at 358.
Defendants argue that in order to state a plausible claim for breach of the duty of prudence,
plaintiffs mu.st plausibly allege facts demonstrating that the Committee followed a flawed process
for selecting the Plan's investment options. See [D.E. 20] 14-17. Defendants contend that
plaintiffs' inferences based on hindsight cannot sustain their claims of a breach of the duty of
prudence. See id. at 15. Rather, according to defendants, plaintiffs must (but have failed to)
plausibly allege facts about the Committee's process. See id. at 17.
Plaintiffs respond that they have pleaded sufficient facts to support a plausible claim for
breach of the duty of prudence. See [D.E. 21] 14-19. Plaintiffs argue that BRISA claims do not
require specific factual allegations about the process at the pleadings stage, but rather permit
circumstantial evidence ofa breach of the duty of prudence. See Braden v. Wal-Mart Stores, Inc.,
588 F.3d 585, 598 (8th Cir. 2009). Plaintiffs contend that the facts they cite in their complaint create
a reasonable inference that the Committee breached the duty ofprudence in various ways. See [D.E.
A plaintiff alleging a breach of the duty of prudence mu.st allege facts that permit the court
to reasonably "infer from what is alleged that the process was flawed." Braden, 588 F.3d at 596; see
St Vincent, 712 F.3d at 718; Renfro v. Unisys Cor;p.• 671 F.3d 314, 327-28 (3d Cir. 2011); White
v. Chevron Cor;p., No. 16-cv-0793-PJH, 2016 WL 4502808, at *7-8 (N.D. Cal. Aug. 29, 2016)
(unpublished). A plaintiff''mu.st plausibly allege action that was objectively unreasonable." Divane
v. Nw. Univ., 953 F.3d 980, 988 (7th Cir. 2020); Amgen Inc. v. Hams, 136 S. Ct. 758, 760 (2016)
(per curiam). Moreover, "[a]n inference pressed by the plaintiffis not plausible ifthe facts he points
to are precisely the result one would expect from lawful conduct in which the defendant is known
to have engaged." Brad~ 588 F.3d at 597. To show an inference that a prudent :fiduciary in like
circumstances would have made a different decision, plaintiffs must provide a ''meaningful
benchmark" against which to base a comparison. Meiners, 898 F.3d at 822.
Twombly and Iqbal's plausibility standard applies to ERISA :fiduciary breach claims. See
Stegemann, 970 F.3dat468, 473; Moon v. BWX Techs., Inc., 577 F. App'x224, 228 (4th Cir. 2014)
(per curiam) (unpublished). A court cannot accept conclusory allegations "lest a plaintiff with a
largely groundless claim be allowed to take up the time of a number of other people, with the right
to do so representing an in terrorem increment of the settlement value." Twombly, 550 U.S. at 558;
see Divane, 953 F.3d at 988; St Vincent, 712 F.3d at 719; Intravaia v. Nat'l Rural Elec. Coop.
Ass'n, No. 1: 19-cv-973, 2020 WL 58276, at* 1 n.1 (E.D. Va. Jan. 2, 2020) (unpublished); Reetz v.
Lowe's Cos., No. 5:18-CV-00075-KDB-DCK, 2019 WL4233616, at *3 (W.D.N.C. Sept. 6, 2019)
"ERISA plaintiffs claiming a breach of :fiduciary duty have a challenging pleading burden
because of their different levels of knowledge regarding what investment choices a plan :fiduciary
made as compared to how a plan fiduciary made those choices." Meiners, 898 F.3d at 822. "The
critical inquiry, then, is whether the missing factual allegations are facts about the funds themselves,
which ERISA plaintiffs can research, or facts about the :fiduciary's internal processes, which ERISA
plaintiffs generally lack." Id. at 822-23; see St. Vincent, 712 F.3d at 720 ("Armed with Dextensive
data about a :fiduciary's investment decisions, a prospective plaintiffmust show, through reasonable
inferences from well-pleaded facts, that the :fiduciary's choices did not meet ERISA's
requirements."). The court evaluates the contested investments and processes in relation to the
whole retirement plan. See Renfro, 671 F.3d at 327. A plaintiff must plausibly allege that a
''prudent fiduciary in like circumstances would have acted differently." St. Vincent, 712 F.3d at 720;
see Stegemann, 970 F.3d at 474-84; Divane, 953 F.3d at 988; Meiners, 898 F.3d at 822.
Defendants contend that the Plan's Summary Plan Description ("SPD") and Investment
Policy Statement ("JPS") cited in the complaint contradict plaintiffs' allegations of a flawed
investment process. See [D.E. 20] 17-20. The JPS provides guidance to the Committee concerning
investments, which defendants argue evinces a prudent system of review. See Wildman v. Am.
Century Servs., LLC, 362 F. Supp. 3d 685, 693-95 (W.D. Mo. 2019); Sacerdote v. N.Y. Univ.
("Sacerdote 11''), 328 F. Supp. 3d 273, 290 & n.34 (S.D.N.Y. 2018). Specifically, the JPS provides
''meaningful direction" to the Committee and its "designated Investment Consultant/Advisor'' in
managing the Plan's investment options. See [D.E. 20-2] 4. The JPS describes that the Plan offers
participants a "core set of reasonably priced investment options with different risk and return.
characteristics, which, when combined, will allow for the construction of a portfolio intended to
match most participants' unique retirement investment objective." Id. The JPS states that the Plan's
investment menu shall include a mix of investment options, including, capital preservation, fixed
income, asset allocation, domestic equity, international equity, and specialty. See id. at 6. The JPS
then extensively describes investment selection, the roles and responsibilities of the Plan's
Investment Consultant/Advisor, and replacement of selected investment options. See id. at 6-8.
Defendants also argue that using CapTrust as an investment advisor further undermines plaintiffs'
allegations of a flawed fiduciary process. See Cunningham v. Comell Univ., No. 16-CV-6525
(PKC), 2019 WL 4735876, at *13 (S.D.N.Y. Sept. 27, 2019) (unpublished); Riley v. Murdock, 890
F. Supp. 444, 458 (E.D.N.C. 1995).
In opposition, plaintiffs argue that the JPS is insufficient to show prudence absent evidence
that defendants adhered to the IPS. See [D.E. 21] 19-21. Plaintiffs also argue that both the IPS and
the employment of CapTrust create questions inappropriate to resolve on a motion to dismiss. See
id. at 20.
The IPS and use of CapTrust are not dispositive, but are informative. With the IPS, plaintiffs
could research whether the Committee complied with the IPS and plausibly allege facts to support
the conclusion that the Committee did not do so and thereby breached its duty ofprudence. Merely
alleging facts "consistent'' with a breach does not alone permit a reasonable inference that the
Committee breached its fiduciary duty. See,~, McCleary-Evans v. Md. De_p'tofTransp., 780 F.3d
582, 58~8 (4th Cir. 2015). The same principle holds true concerning CapTrust. See id.
Turning to the specifics, plaintiffs allege that the Committee maintained several investment
fund options that a reasonable fiduciary would have recognized as imprudent due to their high costs.
See Compl. [D.E. 1] ,r 79. Plaintiffs contend that the majority of funds (more than 60%) in the Plan
were ''much more expensive than comparable funds found in similarly sized plans" (defined as plans
having between $500 million and $1 billion in assets). Id. ,r 81. In support, plaintiffs provide a chart
comparing the expense ratios of investment options in2018 to the median expense ratios in the same
investment category for the year 2015, with some expense ratios being as much as 127% above the
category median. See id. Plaintiffs assert that the chart understates the excessiveness of the fees
because the median.ratios would have been higher in 2015 than in 2018. See id. ,r,r 82-83. Plaintiffs
also allege imprudence in the Committee's general failure to change the fund options since 2014.
See id. ,r 81.
Defendants respond that plaintiffs fail to provide a ''meaningful benchmark" to allege that
the Committee maintained imprudently expensive investment options. See [D.E. 20] 21-23.
Expense ratios vary within a given investment category; therefore, comparisons to broad investment
categories are not a meaningful benchmark. See id. at 22. Moreover, defendants argue that the
expense ratios listed for the Plan options are reasonable as a matter of law, and nothing requires
fiduciaries to choose the cheapest possible fund. See Meiners, 898 F.3d at 823-24; Hecker v. Deere
& Co., 556 F.3d 575,586 (7th Cir. 2009).
Plaintiffs reply that the expense ratio comparison chart provides a meaningful benchmark.
See [D.E. 21] 21-24. Plaintiffs concede that fiduciaries are not required to select the cheapest
investments, but maintain that fiduciaries must at least consider less expensive options. See id. at
''Nothing in BRISA requires employers to establish employee benefit plans. Nor does BRISA
mandate what kinds of benefits employers must provide if they choose to have such a plan."
Lockheed Corp. v. Spink, 517 U.S. 882, 887 (1996). An BRISA fiduciary does not breach its duty
of prudence by failing to offer the cheapest investment option. Likewise, ''nothing in BRISA
requires every fiduciary to scour the market to find and offer the cheapest possible fund." Hecker,
556 F.3d at 586; see Divane, 953 F.3d at 991-92; Meiners, 898 F.3d at 823-24; St. Vincent, 712
F.3d at 718; Terraz.a v. Safeway Inc., 241 F. Supp. 3d 1057, 1076 (N.D. Cal. 2017); Loomis v.
Exelon Corp. ("Loomis f'), No. 06 CV 4900, 2009 WL 4667092, at • 1 (N.D. ill. Dec. 9, 2009)
(unpublished). Thus, choosing a fund with a higher expense ratio does not de facto breach the duty
of prudence. See, e.g., Hecker, 556 F.3d at 586; White, 2016 WL 4502808, at •11.
To show that a prudent fiduciary in like circumstances would have made a different decision,
plaintiffs must provide a ''meaningful benchmark" for comparison. Meiners, 898 F.3d at 822; see
Davis v. Wash. Univ. in St. Louis, 960 F.3d 478, 484 (8th Cir. 2020). Merely alleging that "cheaper
alternative investments with some similarities exist in the marketplace" does not provide a
meaningful benchmark. Meiners, 898 F.3d at 823; see Divane, 9S3 F.3d at 991-92. Rather,
plaintiffs must plausibly allege that defendants "could have offered the exact same investment option
for a lower price based on the Plan's size." T ~ 241 F. Supp. 3d at 1077 ("The Court can
reasonably infer from this allegation that the Defendants acted imprudently by selecting the more
expensive option, all else being equal."); cf. Sandoval ex rel. Novitex Enter. Sols. Ret. Sav. Plan v.
Exela Enter. Sols., Inc., No. 3:17cv1S7S (DJS), slip op. at 9-12 (D. Conn. Mar. 30, 2020)
(unpublished) [D.E. 21-3] (granting motion to dismiss where plaintiffs failed to identify "comparable
funds or benchmark indices"); Henderson v. Emory Univ., 2S2 F. Supp. 3d 1344, 1349-S0 (N.D. Ga.
The availability of lower-cost alternatives is not enough to state a claim for a breach of the
duty of prudence, especially where the challenged plan offers diversified investment options. See,
~ Divane, 9S3 F.3d at 991-92; Kong v. Trader Joe's Co.
("Kong f'), No. CV 20-0S790 PA, 2020
U.S. Dist. LEXIS 181013, at *4-S, 14 (C.D. Cal. Sept 24, 2020) (unpublished); Kong v. Trader
Joe's Co. ("Kong 11''), No. CV 20-0S790 PA, 2020 U.S. Dist. LEXIS 22483S, at • 11-16 (C.D. Cal.
Nov. 30, 2020) (unpublished). It is not "imprudent to provide options with differing features from
which to choose, regardless of whether some perform better than others." Davis, 960 F.3d at 48S;
see Divane, 9S3 F.3d at 991-92; Renfro, 671 F.3d at 327. No breach occurs where a plan offered
a mix of different investment options with a range of expense ratios. See Divane, 9S3 F.3d at
991-92; Renfro, 671 F.3d at 327; Loomis v. Exelon Corp. ("Loomis II''), 6S8 F.3d 667, 670-73 (7th
Cir. 2011); Hecker, S56 F.3d at S86. However, offering a mix of options does not insulate a plan
ifplaintiffs plead enough facts to plausibly allege a breach ofthe duty ofprudence. See, e.g., Sw~
923 F.3d at 329-32.
In Kong I, plaintiffs pleaded a "chart of expense ratios for funds in the Plan against the
median fee to demonstrate that the expense ratio for some of the Plan funds was higher than the
median fee" and "a chart of 2019 and 2020 expense ratios in an effort to demonstrate the expense
ratio for the mutual funds offered compared to other lower cost mutual funds." Kong I, 2020 U.S.
Dist. LEXIS 181013, at *4-S (quotations omitted). The Kong I court held those allegations
insufficient to allege a breach. First, ''where, as here, a plan offers a diversified array of investment
options the fact that some other funds might offer lower expense ratios is not relevant." Id at *12.
Moreover, the comparison chart and median fees were insufficient to state a claim. See id. at *14.
Similarly, in Martin v. Careerbuilder, LLC, plaintiffs alleged that cheaper funds were available for
22 of the 23 funds offered, that 4S percent of the funds remained on the plan for five years without
change, and that some of the funds were outperformed by cheaper analogues. See Martin v.
Careerbuilder, LLC, No. 19-cv-6463, 2020 WL 3S78022, at *2 (N.D. ill. July 1, 2020)
(unpublished). Nonetheless, the Martin court held that because the defendants offered a mix of
investment options, in the absence ofother allegations about inadequate fiduciary performance such
as self-dealing, the evidence was inadequate to sustain a claim for relief. See id. at *4-6.
Plaintiffs do not compare sufficiently similar funds. In using category medians, plaintiffs fail
to allege that funds were available that were identical save for price differentials. See T ~ 241
F. Supp. 3d at 1077. A median value for an entire category cannot be said to be identical save for
price. Cf. Krugerv. NovantHealth, Inc., 131 F. Supp. 3d470, 476 (M.D.N.C. 201S) ("[L]owercost
funds with identical managers, investment styles, and stocks" are an appropriate comparison.).
Merely arguing that approximately 60 percent ofthe Plan's investment options are above the median
for their investment category does not plausibly suggest a breach. See,~ Loomis II, 6S8 F.3d at
Plaintiffs also argue that the Committee's relative failure to change investment options since
2014 evinces a breach of the duty ofprudence. See Compl. [D.E. 1] ,r 81; [D.E. 21] 21. Defendants
respond that the IPS outlined a philosophy of not changjng investment options. See [D.E. 20] 20,
22. Consistency with IPS guidance belies a breach. See White, 2016 WL 4502808, at *7.
Moreover, failure to change investment options alone is not sufficient to state a claim for
imprudence. See, e.g., Loomis II, 658 F.3d at 671-74; Kong II, 2020 U.S. Dist. LEXIS 224835, at
*11. Thus, plaintiffs have failed to state a claim concerning the alleged breach of the duty of
prudence arising from the alleged high costs of the investment fund options.
Plaintiffs contend that the Committee breached its duty of prudence by failing to use lower
cost share classes available during the Class Period. See Compl. [D.E. 1] ,r,r 84-93. According to
plaintiffs, most ofthe lower share alternatives were available before the start ofthe Class Period, and
all were available by August 2017. See id. ,r 90. In support, plaintiffs provide a table offund options
and identical lower cost share classes, evidenced by expense ratios. See id. ,r 87. Plaintiffs argue
that a prudent :fiduciary would have moved the Plan's funds into these lower cost share classes. See
,r,r 88, 91-93.
In order to qualify for lower cost share classes, a plan usually must invest a
minimum of a million dollars, which plaintiffs argue the Plan could have done. See id. ,r,r 89-90.
Defendants respond that BRISA does not require using lower cost share classes. See [D.E.
20] 24-27. Defendants also contend that higher share classes include many benefits such as revenue
sharing, and that plaintiffs cannot plausibly allege that higher share classes were imprudent when
they admit the Plan used revenue sharing to pay expenses. See id. at 25-26. Furthermore,
defendants argue that the Plan's Form 5500s contradict plaintiffs' claims because they show the Plan
routinely moved to lower cost share classes throughout the relevant period. See id. at 26-27.
Plaintiffs reply that defendants' arguments raise questions inappropriate to resolve on a motion to
dismiss. See [D.E. 21] 24-27.
A fiduciary is not required to select the cheapest option possible. See St. Vincent, 712 F.3d
at 718-19; Loomis Il, 658 F.3d at 671-74; Hecker, 556 F.3d at 586; T m 241 F. Supp. 3d at
1076; Loomis I, 2009 WL 4667092, at *1. "[M]erely alleging that a plan offered retail rather than
institutional share classes is insufficient to carry a claim for fiduciary breach." Marks v. Trader Joe's
Co.,No. CV 19-10942PA(JEMx),2020WL2504333,at *8 (C.D. Cal.Apr. 24, 2020)(citationand
quotation omitted); see Loomis II, 658 F.3d at 671-74; Kong II, 2020 U.S. Dist. LEXIS 224835, at
*17; Kong I, 2020 U.S. Dist. LEXIS 181013, at *12-15; Davis v. Salesforce.com, Inc., No. 20-cv01753-MMC, 2020 WL 5893405, at *4-6 (N.D. Cal. Oct. 5, 2020) (unpublished); White, 2016 WL
4502808, at *10-12. In analyzing alleged lower cost alternatives, a court should consider ''whether
the [higher] class share offered other benefits that may have offset any additional costs." Marks,
2020 WL 2504333, at *8; see Intravaia, 2020 WL 58276, at *3 ("[Plaintiffs] allege that a similarly
situated comparator incurs approximately 25% th~ administrative expenses, per participant, of the
Plan here. This comparative fact nudges the claim over the line from merely possible to plausible.");
Feinbergv. T. Rowe Price Gtp.. Inc., No. MJG-17-0427, 2018 WL 3970470, at *6 (D. Md. Aug. 20,
2018) (unpublished); Kruger, 131 F. Supp. 3d at 476-77.
Plaintiffs allege that lower cost share classes were available for several of the fund options,
providing a chart comparing the less expensive alternatives, and alleging that the higher cost shares
did not offer additional benefits to offset the higher costs. See Compl. [D.E. 1] ff 84-93.
Accordingly, plaintiffs have eked across the line and plausibly alleged that the Committee's
selection of higher cost share classes breached its duty of prudence.
Plaintiffs allege that the Committee failed to investigate adequately the availability oflower
cost options including collective trusts or separate accounts. See id. ft 94-104. Instead, according
to plaintiffs, throughout the Class Period, the Plan offered "almost exclusively mutual funds, which
are pooled investment products" and not collective trusts, which feature lower fees and are
increasingly popular investment options. Id. ft 94-98. Moreover, plaintiffs also cite separate
accounts, which are another lower cost alternative that, unlike mutual funds, allow for fee
negotiation. See id. ft 99--101. Given the Plan's size and its lack of limitations on collective trusts,
plaintiffs claim the Committee should have investigated the availability of collective trusts or
separate accounts. See id. ft 103--04.
Defendants respond that BRISA does not require collective trusts or separate accounts, and
that plaintiffs lack knowledge of what options the :fiduciaries investigated. See [D.B. 20] 27-28.
Moreover, the 2018 Form 5500 discloses that the Plan included a collective trust option. See id. at
28. Plaintiffs reply that including "one collective trust option out of twenty-one options when an
additional ten were available" is not sufficient to defeat allegations of imprudence. [D.B. 21] 28
Plans "are under no duty to offer alternatives to mutual funds, even when the plaintiffs argue
they are markedly superior." Moitosov. FMRLLC,451 F. Supp. 3d 189,211 (D. Mass. 2020); see
Loomis II, 658 F.3dat 672-74; Hecker, 556 F.3dat 586; Davis, 2020 WL 5893405, at *6. However,
courts disagree about whether :fiduciaries have a duty to investigate mutual fund alternatives. Some
courts have held that BRISA imposes ''no :fiduciary duty to investigate alternatives to mutual funds."
Moitoso, 451 F. Supp. 3d at 212 (reasoning that collective trusts and separate accounts "differ so
much from mutual funds ... that other courts have found it impossible to make an 'apples-to16
oranges' comparison ofthe two") (citation omitted); accord Davis, 2020 WL 5893405, at *6. Other
courts have held that defendants plausibly breach their duty of prudence by choosing particular
mutual funds and failing to investigate lower cost alternatives such as collective investment trusts
or separate accounts. See Pal.berg v. Goldman Sachs Gtp., Inc., No. 19-CIV-9910 (ER), 2020 WL
3893285, at• 10 (S.D.N.Y. July 9, 2020) (unpublished); Pinnell v. TevaPharms. USA, Inc., No. 195738, 2020 WL 1531870, at *5--6 (E.D. Pa. Mar. 31, 2020) (unpublished); Inre M&T Bank Con,.
BRISA Litig.. No. 16-CV-375 FPG, 2018 WL 4334807, at *8--9 (W.D.N.Y. Sept. 11, 2018)
BRISA does not impose a duty to offer alternatives to mutual funds. See, e.g.• Loomis II,
658 F.3d at 672-74; Hecker, 556 F.3d at 586; Moitoso, 451 F. Supp. 3d at 211; Davis, 2020 WL
5893405, at *6. Moreover, even if BRISA imposes a duty to investigate such alternatives, plaintiffs
admit that the Plan did offer a collective tmst option. By definition, the Committee investigated the
option and offered the option of a collective investment tmst. On these facts, plaintiffs (at most)
have alleged a possible breach, but not alleged facts supporting a reasonable inference that the
Committee failed to investigate the availability oflower cost options including collective investment
trusts or separate accounts. Thus, plaintiffs have failed to state a claim.
Plaintiffs allege that the Committee acted imprudently in failing to invest in lower cost
passively- and actively-managed funds. See Compl. [D.B. 1] ff 105--08. Plaintiffs also claim the
Committee acted imprudently in failing to consider passively-managed funds in place of activelymanaged ones. See id. ff 105-12. In support, plaintiffs provide a chart allegedly showing that
actively-managed funds both charged higher expense ratios and lagged in performance to passivelymanaged comparator funds, as demonstrated by the funds' five-year returns. See id. ,r 110. Plaintiffs
contend that their comparisons are appropriate, given that plaintiffs compared funds in the same peer
group and used the same data points to calculate efficiency. See id. ,r 111.
Defendants respond that plaintiffs inappropriately compare actively- and passively-managed
funds. See [D.B. 20] 28. Defendants contend that plaintiffs "cherry-pick" funds to compare, and
that plaintiffs rely on hindsight in arguing that the Committee inappropriately selected
underperforming actively-managed funds. Id. at 28-29. Additionally, defendants reject the claim
that no prudent :fiduciary would find benefits in offering actively-managed funds. See id at 29.
According to defendants, plaintiffs' allegations against including actively-managed funds are
''particularly misplaced in light of the fact that BRISA specifically requires diversification" of
investments. Id. at 29--30.
Plaintiffs reply that. BRISA requires :fiduciaries to offer passively-managed investment
options when prudent under the prevailing circumstances. See [D.B. 21] 29--31. According to
plaintiffs, defendants failed to investigate whether all actively-managed funds could be replaced with
comparable passively-managed funds. See id.
As for plaintiffs' claim that the Committee failed to investigate passively-managed lower cost
alternatives during the Class Period and thereby breached its :fiduciary duty, "BRISA does not
mandate passive management (with lower fees) over active management." Sacerdote II, 328 F.
Supp. 3d at 313 n.114; see Loomis II, 658 F.3d at 672-74; Hecker, 556 F.3d at 586. Moreover,
"allegations that passively managed funds are available as alternatives to actively managed funds
offered in the Plan do not suffice to demonstrate impmdence." Davis, 2020 WL 5893405, at *3; see
Loomis II, 658 F.3d at 672-74; Hecker, 556 F.3d at 586; Kong II, 2020 U.S. Dist. LEXIS 224835,
at* 13. Comparing actively- and passively-managed funds is like "[c]omparing apples and oranges"
and cannot create a meaningful benchmark. Davis, 960 F.3d at 485; see Loomis II, 658 F.3d at
672-74; Hecker, S56 F.3d at S86; Amron v. Morgan Stanley Inv. Advisors Inc., 464 F.3d 338, 34S
(2d Cir. 2006) (''That a mutual fund has an expense ratio higher than Van.guard, a firm known for
its emphasis on keeping costs low, raises little suspicion ...."); Kong 11, 2020 U.S. Dist. LEXIS
22483S, at *13; Martin, 2020 WL 3S78022, at *4; Davis, 2020 WL S89340S, at *3; Sacerdotell, 328
F. Supp. 3d at 313 n.114.
Alternatively, even ifactively- and passively-managed funds can be compared, the complaint
does not contain a meaningful benchmark. See Davis, 2020 WL S89340S, at *4. "Allegations based
on five-year-returns are not sufficiently long-term to state a plausible claim of imprudence." Id.
(citation and quotation omitted); see Patterson v. Stanley. No. 16-CV-6S68 (RJS), 2019 WL
4934834, at* 12 (S.D.N.Y. Oct. 7, 2019) (unpublished); Dorman v. Charles Schwab Com.. No. 17cv-0028S-CW, 2019 WL S8078S, at *6 (N.D. Cal. Feb. 8, 2019) (unpublished). Likewise, the
complaint fails to plausibly allege a failure to investigate. Accordingly, the court grants defendants'
motion to dismiss regarding passively-managed lower cost funds.
Plaintiffs allege that defendants paid unreasonable recordkeeping fees to Mass Mutual
throughout the Class Period and thereby failed to monitor the Plan's adminimative fees. See Compl.
[D.E. 1] ff 113-31. The "duty of the Plan :fiduciaries with respect to the recordkeeping fees paid
by the Plan is the 'prudent man' standard." Kruger, 131 F. Supp. 3d at 478; see 29 U.S.C. §
1104(a)(l )(B). A ''plan :fiduciary's failure to reduce recordkeeping costs through negotiation or the
solicitation of competing bids may in some cases breach the duty of prudence." Silva v. Evonik
Cor,p.• CV No. 20-2202, slip op. at 8 (D.N.J. Dec. 30, 2020) (unpublished) [D.E. 2S-1]; see Sw~
923 F.3d at 332; Tussey. 746 F.3d at 336; Pinnell, 2020 WL 1S31870, at *S; Nicolas v. Trs. of
Princeton Univ., No. 17-369S, 2017 WL 445S897, at •4 (D.N.J. Sept. 2S, 2017) (unpublished);
Kruger, 131 F. Supp. 3d at 478.
According to plaintiffs, defendants failed to prudently manage and control the Plan's
record.keeping and administrative costs by failing to (1) track the record.keeper's expenses, (2)
identify the fees being paid, particularly those paid by revenue sharing, and (3) remain informed
about marketplace trends. Plaintiffs also cite the Plan's allegedly unreasonably high record.keeping
costs. See Compl. [D.E. 1] ff 119-22. In support, plaintiffs cite the 401k Averages Book for the
proposition that for plans with 2,000 participants and $200 million in assets (which is smaller than
the size ofthe Plan), the average record.keeping/administrative fee (through direct compensation) was
$S per participant with a range of $0 to $43 per participant. See id. ,r 123. Plaintiffs argue that the
Plan's average fee of $20 per participant in direct fees during the Class Period is unreasonable given
that per-participant fees tend to decrease inversely to the number of participants. See id. ff 116,
124-28. Moreover, according to plaintiffs, if all indirect revenue sharing reported were paid to the
record.keeper, then before any rebates the per-participant record.keeping fee would have ranged from
$S4 to $143, well-above the recognized reasonable rates. See id. ,r 128. Plaintiffs also note that
defendants claim to have returned a certain amount of revenue sharing to the Plan, but account
statements fail to show that these amounts were returned directly to plaintiffs' retirement accounts.
Therefore, plaintiffs contend that the amounts went to pay additional fees. See id. ,r 129. Given the
size of the Plan, plaintiffs allege that the :fiduciaries imprudently failed to obtain lower cost
record.keeping services. See id. ff 130-31.
Defendants respond that plaintiffs fail to state a claim for breach of the duty of prudence
regarding the Plan's record.keeping fees. See [D.E. 20] 30-3S. First, according to defendants,
:fiduciaries are required to obtain a reasonable fee, not the lowest possible fee, and plaintiffs allege
no facts concerning a flawed process or failme to negotiate. See id. at 30-31. Defendants also argue
that plaintiffs fail to state a plausible claim that the recordkeeping fees paid to Mass Mutual dming
the Class Period were unreasonable, because plaintiffs do notprovide any average recordkeeping
fees comparable to the Plan's number of participants and assets. See id. at 32. Furthermore,
according to defendants, plaintiffs fail to provide a meaningful benchmark because they do not allege
any details about recordkeeping services. See id. at 32-33. Lastly, defendants contend that
plaintiffs' allegations depend on the assumption that Mass Mutual received all indirect revenue
sharing, which the account statements contradict. See id. at 34-35.
A plaintiffraising an excessive fee claim under BRISA must allege ''that fees were excessive
related to the services rendered." Youngv. Gen. Motors Inv. Mgmt. Corp.• 325 F.App'x31, 33 (2d
Cir. 2009) (unpublished) (quotation omitted); see Abraha v. Colonial PaTk:ing, Inc., 243 F. Supp. 3d
179, 188 (D.D.C. 2017); Perezv. ChimesD.C., Inc., No. RDB-15-3315, 2016 WL4993293, at *8
(D. Md. Oct. 12, 2016) (unpublished). Plaintiffs allege that a per participant fee of $20 is
unreasonable when smaller plans average a per participant fee of$5 according to the 40lkAverages
Book. See Comp!. [D.B. 1] ,r 123-25. Plaintiffs also allege that all recordkeepers provide the same
core group of services. See id. ,r 113. This claim ekes across the plausibility line, and the court
allows plaintiffs' claim of imprudence regarding recordkeeping fees to proceed. See Silva, slip op.
at 8-9; Pinnell, 2020 WL 1531870, at *5; Kruger, 131 F. Supp. 3d at 479.
Count one alleges that in addition to a breach of the duty of prudence, the Committee also
breached the duty ofloyalty. See Comp!. [D.B. 1] ,r,r 132-38. BRISA requires plan :fiduciaries to
"discharge [their] duties ... for the exclusive purpose of Dproviding benefits to participants and
their beneficiaries; and ... defraying reasonable expenses of administering the plan." 29 U.S.C. §
1104(a)(l)(A); seeDiFelice,497F.3dat418-19; Donovan v. Bierwirth, 680F.2d263,271 (2dCir.
1982); Reetz, 2019 WL 4233616, at *5. To state a claim for breach of the duty ofloyalty, plaintiffs
must plausibly allege that the Committee acted with the purpose ofbenefitting itself or a third party.
See Reetz, 2019 WL4233616, at *5; Cassell v. Vanderbilt Univ., 285 F. Supp. 3d 1056, 1062 (M.D.
Tenn. 2018); Nicolas, 2017 WL 4455897, at *3.
Defendants argue that the court should dismiss plaintiffs' breach ofthe duty ofloyalty claim
because plaintiffs allege no facts suggesting that the Committee acted in the interest ofanybody other
than the Plan participants or their beneficiaries. See [D.E. 20] 35-36. Plaintiffs respond that their
allegations of excessive recordkeeping fees create an inference that the Committee acted to benefit
defendants or the recordkeepers. See [D.E. 21] 33-34.
In order to state a claim for breach of the duty of loyalty under ERISA, "a plaintiff must do
more than simply recast purported breaches of the duty of prudence as disloyal acts." Sacerdote v.
N.Y. Univ. ("Sacerdote P'), No_. 16-cv-6284 (KBF), 2017 WL 3701482, at *5 (S.D.N.Y. Aug. 25,
2017) (unpublished); see Allen v. Wells Fargo & Co., 967 F.3d 767, 777 (8th Cir. 2020); Nicolas,
2017 WL 4455897, at *3. Loyalty claims cannot ''piggyback" prudence claims, but must contain
independent facts "suggesting [that] Defendant bene:fitted, financially or otherwise, from any
decisions related to the Plan or engaged in disloyal conduct in order to benefit itself or someone
other than the Plan[' s] beneficiaries." Nicolas, 2017 WL 4455897, at •3; see Allm 967 F.3d at 777;
Cassell, 285 F. Supp. 3d at 1062--63. Specifically, prudence claims regarding recordkeeping may
not simply be repackaged as a disloyalty claim without additional allegations. See Allm 967 F.3d
at 777; Nicolas, 2017 WL 4455897, at *3.
Plaintiffs have not plausibly alleged that the Committee ever acted in the interest of a party
other than the Plan participants or their beneficiaries. Thus, the court dismisses plaintiffs' breach
of the duty of loyalty claim.
In count two, plaintiffs allege that PPD and the Board failed to adequately monitor the
Committee. See Compl. [D.E. 1] ff 139-45. Plaintiffs contend that PPD and the Board violated
their duty to monitor by faj]jng mevaluate the performance ofthe Committee, faj)jng to monitor the
Committee's processes, and failing to remove Committee members whose performance was
inadequate. See id. 1 143. An appointing fiduciary has the duty to review"[a]t reasonable intervals
the performance oftrustees and other fiduciaries ... in such a manner as may be reasonably expected
to ensure that their performance has been in compliance with the terms of the plan and statutory
standards, and satisfies the needs of the plan." 29 C.F.R. § 2509.75-8, at FR-17; see Coyne &
Delany Co. v. Sebrum, 98 F.3d 1457, 1465-66 (4th Cir. 1996). A claim for the failure to monitor
derives from and depends on an ''underlying breach of fiduciary duty cogniz.able under BRISA." In
re Duke Energy BRISA Litig.. 281 F. Supp. 2d 786, 795 (W.D.N.C. 2003); see Feinberg. 2018 WL
3970470, at *7; Kruger, 131 F. Supp. 3dat480; Inre Constellation Energy Grp .. Inc., 738 F. Supp.
2d602, 614 (D. Md. 2010); Inre WachoviaCon,. ERISALitig.• No. 3:09cv262, 2010 WL3081359,
at *17 (W.D.N.C. Aug. 6, 2010) (unpublished).
Defendants contend that because plaintiffs fail to state a claim for a breach of the duty of
prudence, plaintiffs also fail to state a claim for breach of the duty to monitor. See [D.E. 20] 36--37.
However, in light of this court's conclusion that a portion of the prudence claim survives for now,
plaintiffs have alleged a plausible claim for breach of the duty to monitor. See Cunningham v.
Cornell Univ., No. 16-cv-6525 (PKC), 2017 WL 4358769, at *11 (S.D.N.Y. Sept. 29, 2017)
(unpublished). The "duty to monitor claim is only as broad as the surviving prudence claim and is
otherwise dismissed." Id.
Defendants move to dismiss plaintiffs' claims for injunctive relief under Rule 12(b)(l) for
lack of subject-matter jurisdiction. See [D.E. 20] 37-38; cf. Compl. [D.E. 1] ft 50, 53, 145. A
motion to dismiss under Rule 12(b)(l) tests subject-matter jurisdiction, which is the court's
"statutory or constitutional power to adjudicate the case." Steel Co. v. Citizens for a Better Env't,
523 U.S. 83, 89 (1998) (emphasis omitted); see Holloway v. Pagan River Dockside Seafood, Inc.,
669 F.3d 448,453 (4th Cir. 2012); Constantine v. Rectors & Visitors of George Mason Univ., 411
F.3d 474, 479-80 (4th Cir. 2005). A federal court ''must determine that it has subject-matter
jurisdiction over [a claim] before it can pass on the merits of that [claim]." Constantine, 411 F.3d
at 479--80. In making that determination, the court ''may consider evidence outside the pleadings
without converting the proceeding into one for summary judgment." Velasco v. Gov't oflndon.,
370 F.3d 392, 398 (4th Cir. 2004); see Al Shimari v. CACI Premier Tech., Inc., 840 F.3d 147, 154
(4th Cir. 2016); In re KBR, Inc., Bum Pit Litig.. 744 F.3d 326, 333 (4th Cir. 2015); Williams v.
United States, 50 F.3d 299, 304 (4th Cir. 1995). Plaintiffs, as the parties asserting that this court has
subject-matter jurisdiction over the claims, must prove that subject-matter jurisdiction exists. See.
e.g.. Steel Co., 523 U.S. at 103--04; Evans v. B.F. Perkins Co., 166 F.3d 642, 647 (4th Cir. 1999);
Richmond, Fredericksburg & Potomac R.R. v. United States, 945 F.2d 765, 768 (4th Cir. 1991).
In order to establish Article m standing, a plaintiffmust have suffered an ''injury in fact"---an
invasion of a legally protected interest which is (a) concrete and particularized and (b) "actual or
imminent, not 'conjectural' or 'hypothetical."' Lujan v. Defs. ofWildlife, 504 U.S. 555,560 (1992)
(internal citations and quotations omitted). "Second, there must be a casual connection between the
injury and the conduct complained of-the injury has to be fairly traceable to the challenged action
of the defendant, and not the result of the independent action of some third party not before the
court." Id. (cleaned up). ''Third, it must be likely, as opposed to merely speculative, that the injury
will be redressed by a favorable decision." Id. at 561 (cleaned up). A plaintiff must demonstrate
Article m standing for each type of relief sought. See Summers v. Earth Island Inst., 555 U.S. 488,
When a plaintiff seeks injunctive relief, the "injury in fact'' element of standing requires the
plaintiff to plausibly allege a substantial likelihood of future harm. See City of Los Angeles v.
Lyons, 461 U.S. 95, 111 (1983); Hartyv. LuihnFour, Inc., 747 F. Supp. 2d 547, 551-52 (E.D.N.C.
2010). In a class action, at least one named plaintiff must satisfy that requirement. See Warth v.
Seldin, 422 U.S. 490,502 (1975); O'Shea v. Littleton, 414 U.S. 488,494 (1974); McNairv. Syrumse
Qm.Inc., 672F.3d213,223 (3dCir. 2012); Cruzv.Am. Airlines, Inc., 356F.3d320, 329(0.C. Cir.
PPD no longer employs the named plaintiffs, and the named plaintiffs do not participate in
the Plan. Thus, defendants argue that they lack standing. See [D.E. 20] 37-38. Plaintiffs respond
that the named plaintiffs have standing as class representatives to seek injunctive relief. See [D.E.
Former plan participants "do not have standing to seek injunctive relief because they are not
realistically threatened by [a defendant's] future breaches of :fiduciary duties." Urakchin v. Allianz
Asset Mgmt. ofAm.. L.P., No. 8:15-cv-1614-JLS-JCGx, 2017 WL 2655678, at •9 (C.D. Cal. June
15, 2017) (unpublished) (citation and quotations omitted); see Marks, 2020 WL 2504333, at •9
(collecting cases). When a class representative lacks standing to pursue his claim, "it is immaterial
whether any member ofthe potential class would have standing to pursue this claim." Hall v. Lhaco,
Inc., 140 F.3d 1190, 1196-97 (8th Cir. 1998). Accordingly, the court grants defendants' motion to
dismiss plaintiffs' claims for injunctive relief.
In sum, court GRANTS in part and DENIES in part defendants' motion to dismiss for failure
to state a·claim [D.E. 19], and GRANTS defendants' motion to dismiss plaintiffs' request for
injunctive relief [D.E. 19]. Whether plaintiffs' remaining claims will survive a motion for summary
judgment is an issue for another day.
SO ORDERED. This .3..L day of March 2021.
United States District Judge
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