United States District Court, D. Minnesota
Goeffrey A. Graber, Esq. and Cohen Milstein Sellers &
Toll PLLC, Greg G. Gutzler, Esq. and Elias Gutzler Spicer
LLC, Robert K. Shelquist, Esq. and Lockridge Grindal Nauen
PLLP, counsel for plaintiff.
Stephen P. Lucke, Esq., Andrew J. Holly, Esq. and Dorsey
& Whitney LLP, Russell Laurence Hirschhorn, Esq. and
Proskauer Rose LLP, Eleven Times Square, counsel for
S. Doty, Judge.
matter is before the court upon the motion to dismiss by
defendants Wells Fargo & Company, Human Resources
Committee of the Wells Fargo Board of Directors, the Human
Resources Committee members, Wells Fargo Employee Benefits
Review Committee, and the Benefits Review Committee
members. Based on a review of the file, record, and
proceedings herein, and for the following reasons, the court
grants the motion.
ERISA dispute arises out of plaintiff John Meiners's
participation in Wells Fargo's 401(k) retirement plan
(Plan). The Plan is a defined-contribution plan in which
employees may invest a certain percentage of their earnings
on a pre-tax basis. Compl. ¶ 10. During the class
period, the Plan offered 26 to 27 investment options.
Id. ¶ 19. Twelve of the options are Wells Fargo
Dow Jones Target Date Funds, which are proprietary funds
managed by a Wells Fargo subsidiary. Id. Meiners, on
behalf of a putative class, alleges that these funds both
underperformed comparable Vanguard funds and were more
expensive than comparable Vanguard and Fidelity funds.
Id. ¶¶ 27-32. Meiners claims that by
continuing to keep these funds in the Plan, Wells Fargo
breached its fiduciary duties. Id. ¶¶
38-40. Further, Wells Fargo, in an effort to generate fees
and seed the underperforming funds, allegedly breached its
fiduciary duties by designating the Wells Fargo funds as the
default for participants who enrolled in the Plan but did not
select an investment option. Id. ¶¶ 33-36,
November 22, 2016, Meiners filed this class action lawsuit
under ERISA alleging (1) breach of the duties of loyalty and
prudence under 29 U.S.C. § 1104 against the Benefit
Committee; (2) breach of co-fiduciary duty under 29 U.S.C.
§ 1105 against the Human Resources Committee, Hardison,
and Thornton; and (3) knowing participation in a breach of
fiduciary duty under 29 U.S.C. § 1132(a)(3) against
Wells Fargo & Company. Wells Fargo now moves to dismiss
Standard of Review
order to survive a motion to dismiss, “a complaint must
contain sufficient factual matter, accepted as true, to state
a claim to relief that is plausible on its face.”
Braden v. Wal-Mart Stores, Inc., 588 F.3d 585, 594
(8th Cir. 2009) (citations and internal quotation marks
omitted). “A claim has facial plausibility when the
plaintiff [has pleaded] factual content that allows the court
to draw the reasonable inference that the defendant is liable
for the misconduct alleged.” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atl.
Corp v. Twombly, 550 U.S. 544, 556 (2007)). Although a
complaint need not contain detailed factual allegations, it
must raise a right of relief above the speculative level.
See Twombly, 550 U.S. at 555. “[L]abels and
conclusions or a formulaic recitation of the elements of a
cause of action” are not sufficient to state a claim.
Iqbal, 556 U.S. at 678 (citations and internal
quotation marks omitted).
court does not consider matters outside the pleadings under
Rule 12(c). Fed.R.Civ.P. 12(d). The court may, however,
consider matters of public record and materials that are
“necessarily embraced by the pleadings.”
Porous Media Corp. v. Pall Corp., 186 F.3d 1077,
1079 (8th Cir. 1999) (citation and internal quotation marks
omitted). Here, because Meiners's complaint references
returns data for the Wells Fargo and Vanguard funds, the
court properly considers the Wells Fargo and Vanguard
Motion to Dismiss
Breach of Fiduciary Duty
plead a breach of fiduciary duty under ERISA, a plaintiff
must allege that the defendant (1) was a fiduciary of the
plan, (2) was acting in that capacity, and (3) breached a
fiduciary duty. See 29 U.S.C. § 1109. The
principal duties owed by fiduciaries are loyalty and
prudence. Braden, 588 F.3d at 595. The duty of
loyalty requires that the fiduciary discharge his duties
“solely in the interests of the participants and
beneficiaries....” 29 U.S.C. § 1104(a)(1). The
duty of prudence requires that the fiduciary act “with
the care, skill, prudence, and diligence under the
circumstances then prevailing that a prudent man acting in a
like capacity and familiar with such matters would use
....” 29 U.S.C. § 1104(a)(1)(B). ERISA's
“prudent person standard is an objective standard ...
that focuses on the fiduciary's conduct preceding the
challenged decision. Roth v. Sawyer-Cleator Lumber
Co., 16 F.3d 915, 917-18 (8th Cir. 1994). “Because
the content of the duty of prudence turns on the
circumstances ... prevailing at the time the fiduciary acts
... the appropriate ...