>US District Judge Sven Erik Holmes of the US District Court for the Northern District of Oklahoma refused to dismiss the participants’ claims against the plan’s fiduciaries, finding a fiduciary duty to provide “useful and accurate information” to participants and to identify sound investment options. The obligations were to be carried out with the best interests of the participants in mind, “without regard for any personal interest, financial or otherwise,” Holmes wrote, according to Washington-based legal publisher BNA.
>However, the court dismissed the company and its board of directors from the suit, finding that neither Williams itself nor the directors qualified as fiduciaries within the meaning of ERISA, even though the board had a limited fiduciary function in selecting members of the plan’s benefits and investment committees. Instead the court found merit in the claims against the plan’s benefits and investment committees, each of whom were charged with administering the plan.
“The Plan did not require that Williams stock be offered as an investment option. To the extent, therefore, that any Plan fiduciary had a duty to decide or present its views on the wisdom of investment options, it would have been a breach of that duty to fail to address the need to eliminate, or at least to consider eliminating, Williams stock as one of the investment alternatives,” the court said.
>Participants in the 401(k) plan filed suit against Williams, its board of directors, and members of the plan’s benefits and investment committees after the value of the company’s stock plummeted in 2001 and 2002. The lawsuit claimed the defendants failed to provide participants with sufficient information about the company’s true financial condition, particularly in failing to disclose that Williams Communications Group, a broadband provider that was a subsidiary of Williams, was close to bankruptcy and that Williams would be forced to pay approximately $2.5 billion for the broadband provider’s debts.
The defendants moved to dismiss the suit. The case is In re Williams Cos. ERISA Litigation, N.D. Okla., No. 02-CV-153-H(M), 7/14/03.
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