18th Annual Workplace Class Action Report - 2022 Edition

326 Annual Workplace Class Action Litigation Report: 2022 Edition cannot simply make a bare allegation that costs were too high, or returns were too low. Thus, because Plaintiff failed to provide meaningful benchmarks, the Court dismissed this claim. Likewise, the Court dismissed Plaintiff’s claims that two other actively managed find underperformed for failure to provide meaningful benchmarks. Additionally, the Court dismissed Plaintiff’s claims that as a whole the Plans’ investment options were too expensive and that the Plan’s recordkeeping fees were too high. In so ruling, the Court explained that Plaintiff failed to provide an accurate calculation of the expenses and identify another record-keeper that would have performed the work for less. For these reasons, the Court dismissed Plaintiff’s complaint in its entirety. (vii) Discovery Issues In ERISA Class Actions Munro, et al. v. University Of Southern California, Case No. 16-CV-6191 (C.D. Cal. Nov. 2, 2019). Plaintiffs, a group of participants in University of Southern California’s Defined Contribution Retirement Plan and the Tax- Deferred Annuity Plan (“the Plans”), brought a putative class action against USC, the USC Retirement Plan Oversight Committee (the “Committee”), and current or former members of the Committee alleging violations of the ERISA. Plaintiffs alleged that Defendants acted imprudently by failing to oversee or screen the investments offered by the Plans. Plaintiffs asserted that Defendants made available hundreds of investment products with unnecessary overlap and included many poorly performing or overpriced funds in the Plans. Plaintiffs also alleged that Defendants neglected to monitor arrangements with the Plans’ investment providers and record- keepers, which led to excessive administrative expenses. The Court previously had granted Plaintiffs’ motion for class certification. Plaintiffs subsequently issued a subpoena for records from non-party California Institute of Technology (“CalTech”) and after its non-compliance, filed a motion seeking to compel CalTech to respond. The Court granted the motion. CalTech objected to the subpoena on the grounds that the information sought was subject to the attorney-client privilege and also raised privacy and confidentiality concerns. The Court rejected CalTech’s arguments. It found that the subpoena sought relevant information not protected by the attorney-client privilege and that it would not pose an undue burden on CalTech to comply with the subpoena. To address CalTech’s concerns that Plaintiffs would use the information sought to file additional litigation, the Court ordered that the parties and counsel could not use any of the discovery obtained for purposes of any other litigation. Id . at 2. Accordingly, the Court granted Plaintiffs’ motion to compel CalTech to respond to the subpoena. Pizarro, et al. v. Alight Financial Advisors, LLC , 2021 U.S. Dist. LEXIS 31240 (W.D.N.C. Feb. 18, 2021). Plaintiffs, current and former participants of the Home Depot Future Builder 401(k) plan (the "Plan"), filed a class action against the Plan fiduciaries under the ERISA. Plaintiffs asserted breaches of fiduciary duty by Defendants for allowing Alight Financial Advisors, LLC ("AFA") to charge unreasonable fees to Plan participants for managing the assets in accounts of participants who enrolled in the Professional Management Program offered by the Plan and administered by AFA. Id . at *5. Plaintiffs alleged that AFA charged participants of other 401(k) plans substantially less for the same or similar services, and that the Plan fiduciaries failed to conduct any investigation in that regard. Id . During discovery, Plaintiffs issued a subpoena to AFA seeking documents or data that showed the fees that AFA charged participants of other 401(k) plans for the same sort of managed account services it provided to participants of the Home Depot Plan. Id . at *5-6. AFA argued that the requested information required that it reveal "commercially sensitive and confidential documents about its business." Id . at *6. Despite several meet and confer sessions to attempt a resolution, AFA failed to provide the requested materials. Plaintiffs thereafter filed a motion to compel for AFA to provide complete responses to its requests for production. AFA offered to provide a Rule 30(b) witness who would testify on the topics, but argued that the requests posed an unreasonable burden on it and that the information was subject to confidential agreements between AFA and its customers who were not parties to this litigation. Id. at *7. The Court noted that a related action recently ruled on the same issue, and ordered the parties to arrange for a production of documents responsive to the requests. The Court agreed with that other ruling. It opined that to the extent the parties here were unable to promptly execute a plan for the ordered production, they should raise further disputes in the underlying action in the Northern District of Georgia. As a result, the Court granted Plaintiffs’ motion to compel production of Defendant’s discovery responses. (viii) DOL And PBGC ERISA Enforcement Litigation U.S. Department Of Labor v. CSG Partners, 2021 U.S. Dist. LEXIS 112897 (S.D.N.Y. June 16, 2021). The U.S. Department of Labor (“DOL”) opened an investigation of five employee stock option plans (“ESOPs”) to