United States District Court, D. Minnesota
ANN DORMANI, MITCHELL W. KNOLL, DAVID RIGOL, and DOROTHEA SIMMONS, on behalf of the Target Corporation 401k Plan, themselves, and a class consisting of similarly situated participants of the Plan, Plaintiffs,
TARGET CORPORATION, SCOTT KENNEDY, MICHAEL FIDDELKE, PLAN INVESTMENT COMMITTEE, JOHN MULLIGAN, COREY HAALAND, JODEE KOZLAK, BETH JACOB, JOHN DOE DEFENDANTS 1-10, and GREGG STEINHAFEL, Defendants.
Michael Jason Klein, Stull, Stull & Brody; David Krause,
David E. Krause Law Office; and Gregory Potrepka, Levi &
Korsinsky, LLP appeared for Plaintiffs.
Jeffrey P. Justman, Steven L. Severson, and Wendy Jo Wildung,
Faegre Baker Daniels, LLP appeared for Defendants.
N. ERICKSEN UNITED STATES DISTRICT JUDGE
Dormani and three other plaintiffs brought this action
against Target's 401(k) Plan Investment Committee
(“PIC”) and related defendants, alleging
violations of the Employment Retirement Income Security Act
of 1974 (“ERISA”) stemming from Target's
ill-fated venture into Canada in 2013 and 2014. Plaintiffs
contend that Defendants had inside information that
Target's stock was artificially inflated but failed to
take appropriate measures to protect the plan's
participants. They allege breaches of the duties of prudence
and loyalty, and of the duty to monitor other ERISA
fiduciaries. Defendants have moved to dismiss. For the
reasons set forth below, that motion is granted.
January 2011, Target announced plans to open stores in
Canada. The first of these stores opened in March 2013, and
by the end of that year there were more than 100 Target
locations in Canada. Almost immediately, the stores suffered
from supply chain problems, which only grew as more stores
opened over the next two years. These difficulties were
widely publicized during 2013 and 2014. Ultimately, Target
announced in January 2015 that it would discontinue operating
its stores in Canada, having incurred billions of dollars in
are current or former Target employees who participated in
Target's 401(k) plan (the “Plan”) between
February 27, 2013 and August 6, 2014 (the “Class
Period”). Under the Plan, participants could choose to
invest in the Company Stock Fund (the “Fund”),
which comprised Target stock and a small cash reserve for
withdrawal requests. The Fund is an employee stock ownership
plan (“ESOP”) under ERISA. See 29 U.S.C.
core of Plaintiffs' claims is the allegation that Target
stock was artificially inflated by Defendants' failure to
disclose what they knew about the full extent of Target
Canada's problems. According to Plaintiffs, once this
non-public information became public, Target stock dropped
dramatically, causing significant Plan losses. Plaintiffs
allege that Defendants should have taken measures to
counteract this artificial inflation before the stock price
dropped, in order to minimize damage to Plan participants.
Specifically, Plaintiffs assert three causes of action:
breach of the duty of prudence in violation of ERISA
§§ 404(a)(1)(B) and 405; (2) breach of the duty of
loyalty in violation of ERISA §§ 404(a)(1)(A) and
405; and (3) failure to adequately monitor other fiduciaries
and provide them with accurate information, in violation of
ERISA § 404. These allegations and claims are
substantially similar to those made by Plaintiffs against
Defendants in In re: Target Corporation ERISA
Litigation, 275 F.Supp.3d 1063 (D. Minn. 2017)
(“Target ERISA”). Those claims were
dismissed by this Court in an order dated July 31, 2017.
survive a motion to dismiss under Federal Rule of Civil
Procedure 12(b)(6), “a complaint must contain
sufficient factual matter, accepted as true, to ‘state
a claim to relief that is plausible on its face.'”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570
(2007)). “A claim has facial plausibility when the
plaintiff pleads factual content that allows the court to
draw the reasonable inference that the defendant is liable
for the misconduct alleged.” Id. “A
pleading that offers ‘labels and conclusions' or
‘a formulaic recitation of the elements of a cause of
action will not do.'” Id. (quoting
Twombly, 550 U.S. at 555 (1955)). Plausibility is
assessed by “draw[ing] on . . . judicial experience and
common sense.” Id. at 679. Moreover, courts
must “review the plausibility of the plaintiff's
claim as a whole, not the plausibility of each individual
allegation.” Zoltek Corp. v. Structural Polymer
Grp., 592 F.3d 893, 896 n.4 (8th Cir. 2010).
allege three causes of action: breach of the duty of prudence
in violation of ERISA §§ 404(a)(1)(B) and 405; (2)
breach of the duty of loyalty in violation of ERISA
§§ 404(a)(1)(A) and 405; and (3) failure to
adequately monitor other fiduciaries and provide them with
accurate information, in violation of ERISA § 404.
Defendants move to dismiss on the grounds that all three
claims are time-barred and, even if the limitations period
has not run, Plaintiffs have failed to state a plausible
claim for relief.
Statute of Limitations
29 U.S.C. § 1113(2), ERISA claims have a three-year
statute of limitations from the time that Plaintiffs had
“actual knowledge of the breach or violation.”
Defendants contend that Plaintiffs' claims are barred
under this provision because they had actual knowledge of all
of the facts necessary to bring their claims as of August 6,
2014, but did not file their complaint until August 30, 2017.
Plaintiffs make two arguments against this limitations
defense. First, they contend that the limitations period was
tolled under American Pipe & Construction Company v.
Utah, 41 ...