United States District Court, D. Colorado
WILLIAM M. BARRETT, individually and as the representative of a class consisting of the participants and beneficiaries of the Pioneer Natural Resources USA, Inc. 401K and Matching Plan, Plaintiff,
PIONEER NATURAL RESOURCES USA, INC.; THE PIONEER NATURAL RESOURCES USA INC. 401K AND MATCHING PLAN COMMITTEE; THERESA A. FAIRBROOK; TODD C. ABBOTT; W. PAUL MCDONALD; MARGARET M. MONTEMAYOR; THOMAS J. MURPHY; CHRISTOPHER M. PAULSEN; KERRY D. SCOTT; SUSAN A. SPRATLEN; LARRY N. PAULSEN; MARK KLEINMAN; and RICHARD P. DEALY, Defendants.
ORDER GRANTING DEFENDANTS' EARLY MOTION FOR
PARTIAL SUMMARY JUDGMENT
William J. Martinez United States District Judge.
William M. Barrett (“Plaintiff”) sues various
parties involved in the management of a retirement plan in
which he previously participated (collectively,
“Defendants”). Barrett argues that Defendants
breached the fiduciary duties established by the Employee
Retirement Income Security Act of 1974 (“ERISA”),
29 U.S.C. §§ 1001 et seq.
before the Court is Defendants' Early Motion for Partial
Summary Judgment (“Motion”), arguing that (1)
Plaintiff lacks Article III standing to assert one of the
fiduciary breaches alleged in his complaint; and (2) even if
standing exists, the claim fails on its merits. (ECF No. 32.)
Also before the Court is Defendants' Motion to Strike
(ECF No. 55), which relates to what Defendants characterize
as a surreply filed by Plaintiff in opposition to
Defendants' second summary judgment argument. For the
reasons explained below, the Court agrees with
Defendants' Article III standing argument and grants
partial summary judgment on that basis. Defendants'
Motion to Strike is therefore moot.
Court recognizes that Plaintiff recently filed a motion to
add an additional plaintiff whose presence, Plaintiff argues,
would cure the standing defect described below. (See
ECF No. 79.) That motion is not yet ripe and this order is
not meant to prejudge the merits of Plaintiff's most
Allegations from the Complaint
Court accepts the following facts as true for present
participated in the Pioneer Natural Resources USA, Inc.
401(k) and Matching Plan (“Plan”) from 2011 until
September 2017. (ECF No. 57 ¶ 1.) The Plan was a defined
contribution plan (as opposed to a defined benefit plan),
meaning that each Plan participant's benefits turned on
the participant's contributions, the employer's
matching contributions (if any), and investment performance.
(Id. ¶¶ 2-3.)
and management fees, such as recordkeeping fees, can weigh
down investment performance. (Id. ¶¶ 4,
7.) With over $665 million in assets, the Plan was large
enough to possess the bargaining power needed to negotiate
low administrative and management fees, and to negotiate for
participation in mutual funds at lower expense ratios.
(Id. ¶ 6.) The Plan, however, did not take
advantage of this bargaining power. It instead continued to
pay management fees to its designated recordkeeper (Vanguard
Group Inc.) that were allegedly well above the industry
average. (Id. ¶¶ 29-56.)
addition, the Plan imprudently gave its participants the
choice between two “short-term reserve” funds,
the “Retirement Trust” and the “Money
Market Fund.” (Id. ¶ 64.) The Retirement
Trust “averaged returns of 2% per year over five
years” while the Money Market Fund “averaged
returns of 0.12% per year” over the same time period.
(Id. ¶¶ 62-63.) Offering both funds
“provided no benefit to the Plan participants, but
instead potentially confused and misled the Plan
participants.” (Id. ¶ 66.) Defendants
“recognized this issue as early as March 2013, but did
not remove the [Money Market Fund] as an investment
option” until 2016. (Id. ¶¶ 66, 71.)
“As a result, many Plan participants who were eligible
to invest in the [Retirement Trust] instead invested in the
[Money Market Fund], which cost them an annual investment
return of almost 2%.” (Id. ¶ 67.)
on these allegations, Plaintiff asserts four claims for
relief. Claim 1 asserts breaches of the duties of loyalty and
prudence based on the unreasonably high recordkeeping fees.
(Id. ¶¶ 93-101.) Claim 2 asserts breaches
of the same duties for maintaining the Money Market Fund as a
Plan option for three years after it became clear that it was
an imprudent investment choice. (Id. ¶¶
102-12.) Claim 3 is closely related to Claim 1 and asserts a
violation of ERISA regulations regarding disclosure of
administrative fees. (Id. ¶¶ 113-19.)
Claim 4 accuses Defendant Pioneer Natural Resources USA, Inc.
of failure to monitor the fiduciaries responsible for
administering the Plan. (Id. ¶¶ 120-27.)
seeks to assert these claims on a class-action basis.
(Id. ¶¶ 87-92.) He proposes two separate
(1) Administrative Fee Class and Investment
Management Fee Class
All participants and beneficiaries of the Pioneer Natural
Resources USA, Inc. 401(K) and Matching Plan from July 1,
2011 through the date of ...