U.S. Supremes Turn Away Hecker Fee Case Appeal

January 19, 2010 (PLANSPONSOR.com) – A closely watched case involving the dismissal of a lawsuit alleging excessive 401(k) fees by Deere & Co. won’t get a hearing before the nation’s highest court.

Acting without comment, U.S. Supreme Court justices on Tuesday turned away an appeal by plan participants of a 7th U.S. Circuit Court of Appeals ruling in the case of Hecker v. Deere & Co. Judges at the Chicago-based appellate court had upheld a lower court judge’s dismissal of the employee suit against the heavy equipment maker, and then declined to reconsider that decision (see IMHO:The “Burden” of Proof).

U.S. District Judge John Shabaz of the U.S. District Court for the Western District of Wisconsin ruled in June 2007 that the participants had not made a strong enough case that the company had not complied with current laws and rules governing retirement plan fee disclosures and agreed with Deere that the plaintiff’s case should be thrown out.

Also named as defendants were Fidelity Management Trust Company, the directed trustee and recordkeeper for the two Deere plans, which also managed two investments under the plan, and Fidelity Management & Research Company, the investment adviser for the mutual funds offered as options under Deere’s plans.

After considering the initial appeal of the Shabaz ruling, Circuit Judge Diane P. Wood concluded “that the district court correctly found that plaintiffs failed to state a claim against any of the defendants, and we therefore affirm the district court’s judgment.”

In papers filed as part of a request for the 7th Circuit to take another look at the matter, lawyers for the Department of Labor (DoL) argued that the application by Shabaz of 404(c) protection for Deere could be interpreted in future cases as a sanction of all manner of potential plan wrongdoing – and assertion the appellate panel rejected (see 7th Circuit Panel Limits Ruling’s 404(c) Effects). 

Documents relating to the Hecker case are available here