ERISA Lawsuit Against Kellogg Dismissed

The retirement plan lawsuit, originally filed in 2020, alleged fiduciary breaches committed by the ERISA finance and administrative plan committee.

A federal judge in Michigan dismissed the 2020 class action lawsuit Fleming v Kellogg Co. et al. on April 27 by approving Kellogg’s motion to dismiss, according to the court order.      

U.S. District Judge Jane Beckering, presiding in the U.S. District Court for the Western District of Michigan, Southern Division, dismissed with prejudice two alleged counts of fiduciary breach brought before the court. The nature of the ruling means the purported class of plaintiffs cannot refile the case.

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Beckering’s judgment referenced a bench opinion filed one day earlier during oral arguments on the motion to dismiss, of which a transcript has not yet been made available.

Kellogg submitted a motion to dismiss the complaint in September 2022, arguing that the plaintiffs failed to state a claim and lacked standing to bring suit, according to the court filings.   

The plaintiff, Bradley Fleming, was a former accountant at Kellogg who sued for breach of fiduciary duty to retirement plan participants of the Kellogg Company Savings and Investment Plan under the Employee Retirement Income Savings Act, according to the complaint.

The plaintiff’s amended complaint, submitted in 2022, alleged the Kellogg ERISA finance and ERISA administrative committee committed two counts of fiduciary breach: failing to monitor plan recordkeeping costs by causing participants to pay excessive fees for recordkeeping services and failing to adequately monitor other fiduciaries.

Fleming and the never-certified class of plaintiffs alleged Kellogg’s retirement plan fiduciaries should have used the size of the plan as a bargaining chip to negotiate lower plan fees and expenses, according to the complaint. In 2020, the plan held more than $1.9 billion in retirement assets for 12,244 participants, according to the complaint.

Transamerica Retirement Solutions was the recordkeeper for the Kellogg retirement plan from 2016 to 2020, and Fidelity took over in 2021, the record shows.

Kellogg Co., its board of directors, the ERISA finance committee and its administrative committee were all named in the lawsuit. Kellogg did not return a request for comment on the lawsuit’s dismissal

Representing the defendants were attorneys from the law offices of Jenner & Block LLP, based in Chicago; and Miller Johnson PLC, based in Grand Rapids, Michigan. Troy Haney, of the Haney Law Office PC, based in Grand Rapids, Michigan, and attorneys with the law firm Walcheske & Luzi LLC, based in Brookfield, Wisconsin, represented the plaintiff.