The Department of Labor, AARP, and a group of law professors have filed amicus briefs in support of plaintiffs’ petition for rehearing and rehearing en banc in Hecker v. Deere, which remains pending in the Seventh Circuit. In Hecker, a three-judge panel affirmed the district court’s dismissal of plaintiffs’ 401(k) plan participants’ breach of ERISA fiduciary duty claims, holding that “revenue sharing” fees are not plan assets and need not be disclosed where the total fees charged by a mutual fund are disclosed. Defendants include plan sponsor Deere, plan recordkeeper Fidelity Trust, and Fidelity Research, the investment advisor to the Fidelity funds offered in the plan.
Many of the cases brought by plan participants against plan sponsors have been stayed pending resolution of the Hecker case. United Technologies, however, was recently granted summary judgment in the District of Connecticut; the court stated in dicta that the recordkeeper (Fidelity) was not an ERISA fiduciary. That dismissal has been appealed to the Second Circuit. The dismissal in Braden v. Wal-Mart likewise remains on appeal in the Eighth Circuit.
On the class certification front, a hearing was held in late February in Haddock v. Nationwide on plaintiffs’ motion for class certification, suggesting a decision may be forthcoming. In addition, in Ruppert v. Principal Life, the court granted plaintiff leave to file, and plaintiff recently filed, supplemental class certification motion pertaining to Principal’s alleged breaches of fiduciary duty relating to its proprietary “Foundation Option” funds. The court had previously denied plaintiff’s motion for class certification, holding that Principal’s fiduciary status “would have to be determined on a plan-by-plan basis.” In support of its decision, the court cited Principal’s admission that it had acted as an ERISA fiduciary with respect to the selection, monitoring, and retention of investment managers for its Foundation Option funds.