Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Dormani v. Target Corp.

United States District Court, D. Minnesota

June 15, 2018

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,
v.
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.

          ORDER

          JOAN N. ERICKSEN UNITED STATES DISTRICT JUDGE

         Ann 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.

         BACKGROUND

         In 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 losses.

         Plaintiffs 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. § 1107(d)(6)(A).

         At the 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.

         LEGAL STANDARD

         To 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).

         DISCUSSION

         Plaintiffs 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.

         A. Statute of Limitations

         Under 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 ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.