A second go-round at big oil didn’t end well for plaintiffs in a class action suit filed against Chevron. The case claimed millions of dollars were supposedly lost on behalf of plan participants from its $19 billion 401k plan, primarily due to conflicts of interest and excessive fees.
“U.S. District Judge Phyllis Hamilton in Oakland, California said plaintiffs failed to show that Chevron breached its duties of loyalty and prudence to manage the plans in the best interest of employees and retirees,” Reuters reports.
The judge dismissed a similar 401k class-action claim last August over Chevron’s use of stable value funds, but allowed plaintiffs to amend that complaint. It challenged alleged high-fees and unsuitable investment options associated with the 401k plan.
In her decision last week, Hamilton found that, “Because plaintiffs have failed to correct the deficiencies identified by the court in its prior order, and because the sole new claim fails for the reasons set forth in this order, the court finds that further leave to amend would be futile. The dismissal is WITH PREJUDICE.” [Emphasis in original]
Jerome Schlichter, managing partner with St. Louis-based Schlichter, Bogard and Denton, represented the plaintiffs. Schlichter has made a name for himself by suing larger 401k plan sponsors and financial services companies, most famously receiving a unanimous decision from the Supreme Court in the case of Tibble v. Edison.
His latest targets include many of the country’s top colleges and universities, alleging impropriety in the school’s retirement plans regarding fiduciary duties under ERISA. Duke University, John Hopkins, The University of Pennsylvania, Vanderbilt, Massachusetts Institute of Technology, New York University, Yale and Columbia are all the subject of lawsuits, first filed last August.
“[P]laintiffs contend that the value of their 401k retirement accounts—and those of other Plan participants—would have been significantly higher had defendants acted more prudently and chosen funds with higher returns or lower administrative and management fees (or both),” Hamilton concludes in the most recent decision. “They assert that the Plan fiduciaries are personally liable to make good to the Plan any losses resulting from the alleged breaches of fiduciary duty.”