Lawsuit Against New England Health Care Provider Will Proceed

The U.S. District Court in New Hampshire has scheduled a pretrial conference for next month. 

The class action retirement plan lawsuit against a New England network of medical centers and health clinics will proceed after a federal judge denied the defendant’s motion to dismiss, a court filing shows.

Defendant Dartmouth Hitchcock Medical Center and Clinics had asked the court to dismiss the lawsuit, brought under the Employee Retirement Income Security Act, for failure to state a claim in the case, Debra Adams et al v. Dartmouth-Hitchcock Clinic, et al. However, Chief Judge Landya B. McCafferty, of the U.S. District Court for the District of New Hampshire, ruled the lawsuit will advance, according to the court order.

The lawsuit brought substantially similar allegations as made in several other ERISA lawsuits in which the plaintiffs have claimed the plan fiduciaries have failed to leverage their substantial bargaining power to secure lower fees, thereby committing breaches of the fiduciary duties of prudence and loyalty.

The Dartmouth-Hitchcock combined 401(a) and 403(b) defined contribution retirement plans had at least $1.2 billion in assets under management at all times during the class period, according to the complaint.

McCafferty noted that previous U.S. Court of Appeals decisions in the 6th, 7th and 8th circuits have held that complaints like the plaintiffs’ require additional circumstantial factual allegations before they can be allowed to proceed.

“Many district courts around the country have addressed similar allegations at the motion to dismiss stage with mixed results,” McCafferty wrote. “The First Circuit [which oversees the District of New Hampshire], however, has not so foreclosed plaintiffs’ complaint.”

“The court finds persuasive the reasoning of the other First Circuit district courts, which have allowed to move forward complaints that are substantially and materially similar to this complaint,” McCafferty added. “The court is not therefore persuaded to deny plaintiffs the opportunity for discovery.”

The plaintiffs are former employees of the Dartmouth-Hitchcock network, operator of Dartmouth-Hitchcock Medical Center in Lebanon, New Hampshire, and the Dartmouth Hitchcock Clinics, which provide primary and specialty care services in New Hampshire and Vermont.

The initial complaint was brought in March 2022. The defendant filed the motion to dismiss in May 2022.

“Defendants’ further argument that plaintiffs lack standing as to allegations about certain investment funds that support their duty of prudence claim has no merit at this early stage,” McCafferty wrote in the ruling, released last week.

The 2020 Form 5500s for the 401(a) and the 403(b) plans, combined, list 31,256 participants with account balances, as of the end of the plan year, the original complaint shows.

The plaintiffs’ attorneys asked the court to certify the class period as applying to all persons, except defendants and their immediate family members, who were participants in or beneficiaries of the plan, at any time between March 18, 2016, through the date of judgment.

A request for comment to Dartmouth-Hitchcock was not returned.

 

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