7th Circuit Panel Limits Ruling's 404(c)
Effects
June 26, 2009 (PLANSPONSOR.com) - Faced with
pressure to take another look at its February 2009 decision
in a widely watched 401(k) excessive fee case, a federal
appellate court has turned down the rehearing request but
issued an addendum sharply limiting the earlier ruling's
scope on the issue of 404(c) protections.
While the three judge panel at the 7
th
U.S. Circuit Court of Appeals refused to disturb
the court's earlier holding in
Hecker v. Deere & Co.,
Circuit Judges
Daniel A. Manion, Diane P. Wood and John Daniel
Tinder made clear the
Hecker
decision was not intended as a sweeping statement to be
broadly applied to all similar fee disputes.
The court ruled in the earlier decision that a lower
court was right in throwing out all allegations that heavy
equipment maker Deere & Co. and its investment manager
Fidelity Management Trust Co., violated the
Employee Retirement Income Security Act (ERISA) by
charging participants excessive fees (see
Appellate Court Backs Deere Case Dismissal
).
The decision helped spark an industry debate over
the applicability of 404(c) protections
in disputes such as that in the
Hecker
case.