Judge Jesse Furman of the U. S. District Court of the Southern District of New York has denied the defense’s motion to dismiss an excessive fee case filed against cosmetics company Estee Lauder and ordered it to file an answer to the amended complaint no later than June 28. The two-page court order doesn’t offer any reasoning for the denial.
Of note, the court allowed the parties to redact narrow references to recordkeeping fees from their memoranda of law, without giving a reason as to why. It said the redacted information played little to no role in the court’s decision. Furman said the court would explain the reasons for denying the motion to dismiss at an initial pretrial conference to be held next month.
The original lawsuit, which was filed against Estee Lauder, its board of directors and the retirement plan’s investment committee, accused the defendants of breaching their fiduciary duties under the Employee Retirement Income Security Act (ERISA) by failing to prevent the plan from paying lower investment and recordkeeping fees. The plaintiffs claimed the defendants failed to objectively and adequately review the plan’s investment portfolio with due care to ensure that each investment option was prudent, in terms of cost, and maintained certain funds in the plan despite the availability of identical or materially similar investment options with lower costs and/or better performance histories.
The lawsuit also said that from 2014 to 2018, the private label collective investment trust (CIT) target-date funds (TDFs) and other active funds in the plan charged “grossly excessive fees” and that there were comparable or superior choices available. Further, the lawsuit charged that the plan’s fiduciaries didn’t track recordkeeping expenses, including direct compensation and revenue-sharing, and that the plan had not issued any requests for proposals (RFPs) to benchmark the recordkeeping fees since 2014.
« Alegeus to Debut Modern HSA Solution