A Growing Trend: Fiduciary Secures Trial Victory in Excessive Fee Litigation

Summary

On August 22, 2024, the Central District of California found in favor of the defendants after a bench trial on breach of fiduciary duty claims related to the monitoring of recordkeeping expenses and selection of investments in In re: Prime Healthcare ERISA Litigation. Prime Healthcare involved claims that the fiduciaries of the Prime Healthcare Services, Inc. 401(k) Plan (the "Plan"), a multiple employer plan with sixty-eight different participating employers, caused the Plan to pay excessive recordkeeping fees and retain underperforming investments. This decision is another example of district courts across the country rejecting excessive recordkeeping fee and imprudent investment claims after trial. It also provides a notable rejection of the testimony from certain experts that the plaintiffs' bar has used in recent years to support these types of claims. On September 23, 2024, plaintiffs filed a notice of appeal to the Ninth Circuit Court of Appeals.