Sellers v. Trs. of Bos. Coll.

• Decision Date: 27 December 2022
• Docket Number: Civil Action 22-10912-WGY
• Parties: CONNIE SELLERS AND SEAN COOPER, INDIVIDUALLY AND AS THE REPRESENTATIVES OF A CLASS OF SIMILARLY SITUATED PERSONS, AND ON BEHALF OF THE BOSTON COLLEGE 401K RETIREMENT PLAN I AND THE BOSTON COLLEGE 401K RETIREMENT PLAN II, Plaintiffs, v. TRUSTEES OF BOSTON COLLEGE; PLAN INVESTMENT COMMITTEE, AND JOHN AND JANE DOES 1-10, Defendant.
• Court: U.S. District Court — District of Massachusetts

CONNIE SELLERS AND SEAN COOPER, INDIVIDUALLY AND AS THE REPRESENTATIVES OF A CLASS OF SIMILARLY SITUATED PERSONS, AND ON BEHALF OF THE BOSTON COLLEGE 401K RETIREMENT PLAN I AND THE BOSTON COLLEGE 401K RETIREMENT PLAN II, Plaintiffs,
v.
TRUSTEES OF BOSTON COLLEGE; PLAN INVESTMENT COMMITTEE, AND JOHN AND JANE DOES 1-10, Defendant.

Civil Action No. 22-10912-WGY

United States District Court, D. Massachusetts

December 27, 2022

MEMORANDUM OF DECISION

WILLIAM G. YOUNG, JUDGE OF THE UNITED STATES ^[3]

I. INTRODUCTION

In this ERISA litigation, two former employees of Boston College who participate in two retirement plans administered by the college bring a complaint on behalf of themselves, the retirement plans, and a proposed class of all others similarly situated (collectively, the “Plan Participants”) against the trustees of Boston College (the “Trustees”), its investment committee (the “Committee”), and ten John and Jane Does (collectively, “Boston College”). Class Action Compl.

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(“Compl.”), ECF No. 1, 1, ¶¶ 1-18. Plan Participants allege that Boston College has breached its fiduciary duties under ERISA-first and foremost, the duty of prudence and the duty to comply with plan documents in violation of ERISA Sections 409 and 502, 29 U.S.C. § 1104(a)(1)(B) and (D) (count one). Id. ¶ 1. Plan Participants also allege that the trustees failed to properly monitor the Committee and the ten John and Jane Does (count two). Ibid.

While each of Plan Participants' allegations taken individually are likely insufficient to survive a motion to dismiss, the totality of the pleaded facts raise a plausible--not merely conceivable--inference that Boston College breached their fiduciary duties under ERISA: specifically the duty of prudence, the duty to comply with plan documents, and the duty to monitor fiduciaries. Thus, for the reasons articulated more fully below, this Court DENIED Boston College's Motion to Dismiss, ECF No. 12, and allows Plan Participants to proceed to discovery on both the breach of the duty of prudence and the failure to monitor claims.

A. Facts and Procedural History

In considering a motion to dismiss for failure to state a claim, this Court “take[s] the complaint's well-pleaded facts as true.” Flinn v. Minn. Life Ins. Co., 353 F.Supp.3d 110, 114 (D. Mass. 2018) (citing Barchock v. CVS Health Corp., 886 F.3d 43, 48 (1st Cir. 2018)); see Ruivo v. Wells Fargo Bank, N.A., 766 F.3d 87, 90 (1st Cir. 2014)

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(“We examine whether the operative complaint states a claim for which relief can be granted, construing the well-pleaded facts in the light most favorable to the plaintiff, . . . accepting their truth and drawing all reasonable inferences in plaintiff's favor ....”) (internal citations omitted).

On June 10, 2022, plaintiffs Connie Sellers (“Sellers”) and Sean Cooper (“Cooper”), individually and as the representatives of a class of similarly situated persons, and on behalf of the two Boston College 401(k) retirement plans, filed a class action complaint against Boston College. Compl. 1, ¶¶ 16-18. The class action complaint alleges one count against all Boston College defendants (Count One: Breach of Fiduciary Duty of Prudence and Fiduciary Duty to Comply with Plan Documents) and one count against only the Trustees, for failing to monitor the Committee and the ten John and Jane Does (Count Two: Failure to Monitor Fiduciaries). Id. ¶¶ 116-35.

On August 15, 2022, pursuant to Federal Rule of Civil Procedure 12(b)(6), Boston College moved to dismiss both counts of Plan Participants' complaint, see Defs.' Mot. Dismiss Compl. (“Defs.' Mot.”), ECF No. 12, and the issues have been fully briefed, see Defs.' Mem. Law Support Mot. Dismiss Compl. (“Defs.' Mem.”), ECF No. 13; Pl.'s Opp'n Defs.' Mot. Dismiss

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Compl. (“Pl.'s Opp'n”), ECF No. 19; Reply Support Defs.' Mot. Dismiss Compl. (“Defs.' Reply”), ECF No. 20.

Sellers and Cooper are two former Boston College employees who participate in two defined contribution retirement plans administered by Boston College via the Trustees, the Committee, and, without limitation, John and Jane Does 1-10. Compl. 1, ¶¶ 16-18. The putative class that Plan Participants seek to certify is defined as follows: “[a]ll persons, except Defendants and their immediate family members, who were participants in, or beneficiaries of the Plans, at any time between June 10, 2016 through the date of judgment . . . .“ Id. ¶ 106.

The Trustees is the legal entity responsible for overseeing Boston College--a private, Catholic educational institution in Middlesex and Suffolk Counties, Massachusetts. Id. ¶ 20.

The Committee is charged with oversight of the investment policies for the two retirement plans, and the Investment Policy Statement acknowledges that “[m]embers of the Committee are ‘fiduciaries' as defined by ERISA.” Id. ¶ 23.

Unknown “John Doe” Defendants 1-10 include, but are not limited to, Boston College officers, employees, board members, administrators, and/or contractors who are/were fiduciaries of the Plans within the meaning of ERISA Section 3(21)(A), 29 U.S.C. § 1002(21)(A) during the Class Period. Id. ¶ 27.

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1. The Retirement Plans

Boston College sponsors two retirement plans in which the class plaintiffs participate, The Boston College 401(k) Retirement Plan I (“Plan I”) and The Boston College 401(k) Retirement Plan II (“Plan II”) (collectively, the “Plans”). Compl. ¶ 7. The Plans are each defined contribution or individual account plans that include a cash or deferred arrangement, meaning that “[r]etirement benefits provided by each Plan are based solely on the amounts contributed to a participant account, and any income or gains (or losses) on such contributions, less any expense that may be allocated to such participant's account.” Compl. ¶ 34 (citing Summary Plan Description, Boston College 401(k) Retirement Plans I & II, dated January 1, 2015 at 6).

Both Plan I and Plan II are “employee pension benefit plan[s]” within the meaning of ERISA Section 3(2)(A), 29 U.S.C. § 1002(2)(A) and “defined contribution plan[s]” within the meaning of ERISA Section 3(34), 29 U.S.C. § 1002(34), covering eligible current and former Boston College employees, including each of the Plan Participants. Id. ¶ 28. Each Plan is a qualified plan under 26 U.S.C. § 401, commonly referred to as a “401(k) plan.” Ibid. Boston College is the plan sponsor and plan administrator for both plans. Id. ¶¶ 31-32 (citing Summary

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Plan Description, Boston College 401(k) Retirement Plans I & II, dated January 1, 2015 at 18.).

As of December 31, 2020, Plan I had 3,631 “participants with account balances as of the end of the plan year” 2020. Id. ¶ 107 (citing Form 5500-Plan I, at 2). As of December 31, 2020, Plan II had 3,147 “participants with account balances as of the end o f the plan year.” Ibid.^[1]

In each Plan, the majority of investment options are TIAA or Fidelity funds, with four or fewer options from outside fund families available in each Plan. Id. ¶ 43. The retirement plans are governed by The Investment Policy Statement, which requires the Plans' fiduciaries to, among other things, ensure that the investment options made available to participants “charge fees that are reasonable for the asset class and investment style.” Id. ¶ 120.

II. ANALYSIS

Under count one, Plan Participants' pleaded facts showing Boston College's alleged breach of their duty of prudence fall into two main categories. Compl. ¶¶ 12, 57-105. First, Participants allege that the retirement plans were subject to excessive fees in the form of higher-than-average recordkeeping fees and investment management fees. Id. ¶¶ 8-9, 65-67.

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Second, Participants allege that the investment options offered within the funds-- offerings from TIAA, CREF, and Fidelity specifically--were themselves imprudent investments and that Boston College should have removed them. Id. ¶¶ 83-105. Plan Participants also allege that Boston College failed to comply with documents and instruments governing the Plans. Id. ¶¶ 11627. As to count two, Plan Participants assert that the Trustees breached their duty to monitor the investment committee and Jane and John Does 1-10. Id. ¶¶ 128-135.

Upon reviewing the totality of the pleaded facts and drawing all inferences in favor of Plan Participants, this Court DENIES Boston College's motion to dismiss, acknowledging that the complaint sets forth sufficient evidence of a potential breach of ERISA's fiduciary duties as to allow Plan Participants to proceed to discovery on both counts of the complaint.

A. Standard of Review

To withstand a motion to dismiss, a complaint must “state a claim upon which relief can be granted ....” Fed.R.Civ.P. 12(b)(6). The complaint must include sufficient factual allegations that, accepted as true, “state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 1974, 167 L.Ed.2d 929 (2007). Courts “draw every reasonable inference” in favor of the plaintiff, Berezin v. Regency Sav. Bank, 234 F.3d 68, 70 (1^st Cir. 2000),

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but they disregard statements that “merely offer legal conclusions couched as fact or threadbare recitals of the elements of a cause of action,” Ocasio-Hernandez v. Fortuno-Burset, 640 F.3d 1, 12 (1st Cir. 2011) (brackets, ellipsis, and quotations omitted).

On one hand, it is well established that a motion to dismiss for failure to state a claim in the ERISA context is an “important mechanism for weeding out meritless claims.” Barchock v. CVS Health Corp., No. CV 16-061-ML, 2017 WL 1382517, at *4 (D.R.I. Apr. 18, 2017) (quoting Fifth Third Bancorp v. Dudenhoeffer, 573 U.S. 409, 134 S.Ct. 2459, 2471, 189 L.Ed.2d 457 (2014)), aff'd, 886 F.3d 43 (1st Cir. 2018). A determination of whether an ERISA claim should be dismissed for failure to state a claim therefore “requires careful judicial consideration of whether the complaint states a claim that the...