Troudt v. Oracle Corp.

• Decision Date: 01 March 2019
• Docket Number: Civil Action No. 16-cv-00175-REB-SKC
• Parties: 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.
• Court: U.S. District Court — District of Colorado

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.

Civil Action No. 16-cv-00175-REB-SKC

UNITED STATE DISTRICT COURT FOR THE DISTRICT OF COLORADO

March 1, 2019

Judge Robert E. Blackburn

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).

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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 (10^th 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 (10^th 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 (10^th 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"),

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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

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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. [#134-11] 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 "4^th Quarter 2017 Investment Review" (Motion App., Exh. A.2 [#134-2] at 26-107);

(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

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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'

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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 (10^th 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 time-barred.

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 (10^th Cir. 2015) (citation and internal quotation marks

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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...