United States District Court, D. Colorado
DEBORAH TROUDT, et al., individually and as representatives of a class of plan participants, on behalf of the Oracle Corporation 401k Savings and Investment Plan, Plaintiffs,
ORACLE CORPORATION, et al., Defendants.
ORDER RE: DEFENDANTS' MOTION FOR SUMMARY
E. BLACKBURN UNITED STATES DISTRICT JUDGE
matters before me are (1) Defendants' Motion for Summary
Judgment [#134],  filed April 16, 2018; and (2)
Plaintiffs' Objections to Untimely Produced Documents
Relied on by Defendants in Their Motion for Summary Judgment
[#134] [#155], filed May 22, 2018. I overrule the objections.
I grant the summary judgment motion in part and deny it in
jurisdiction over this matter pursuant to 28 U.S.C. §
1331 (federal question) and 29 U.S.C. § 1132(e)(1)
(action to enforce rights under ERISA).
STANDARD OF REVIEW
judgment is proper when there is no genuine dispute as to any
material fact and the movant is entitled to judgment as a
matter of law. Fed.R.Civ.P. 56(a); Celotex Corp. v.
Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2552, 91
L.Ed.2d 265 (1986). A dispute is “genuine” if the
issue could be resolved in favor of either party.
Matsushita Electric Industrial Co., Ltd. v. Zenith Radio
Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 1356, 89
L.Ed.2d 538 (1986); Farthing v. City of Shawnee, 39
F.3d 1131, 1135 (10th Cir. 1994). A fact is
“material” if it might reasonably affect the
outcome of the case. Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91
L.Ed.2d 202 (1986); Farthing, 39 F.3d at 1134.
who does not have the burden of proof at trial must show the
absence of a genuine factual dispute. Concrete Works,
Inc. v. City & County of Denver, 36 F.3d 1513, 1517
(10th Cir. 1994), cert. denied, 115 S.Ct.
1315 (1995). Once the motion has been properly supported, the
burden shifts to the nonmovant to show, by tendering
depositions, affidavits, and other competent evidence, that
summary judgment is not proper. Concrete Works, 36
F.3d at 1518. All the evidence must be viewed in the light
most favorable to the party opposing the motion. Simms v.
Oklahoma ex rel. Department of Mental Health and Substance
Abuse Services, 165 F.3d 1321, 1326 (10th
Cir.), cert. denied, 120 S.Ct. 53 (1999).
class action, plaintiffs, individually and as representatives
of other participants in the Oracle Corporation 401(k)
Savings and Investment Plan (the “Plan”), allege
defendants breached their fiduciary duties in the management
of the Plan, in violation of the Employee Retirement Income
Security Act of 1974 (“ERISA”), 29 U.S.C.
§1001 et. seq. The Plan is one of the largest
in the country, with more than 65, 000 participants and over
$12 billion in assets. As a defined contribution plan, the
Plan allows participants to contribute up to 40% of their
compensation to the Plan, which Oracle matches. The Plan
currently offers some 30 different investment options.
Oracle Corporation (“Oracle”) is a named
fiduciary of the Plan and a Plan administrator. Defendant
Oracle Corporation 401(k) Committee (the
“Committee”), composed of Oracle employees (the
individually named defendants in this suit), is also a Plan
fiduciary. In addition to its other duties, the Committee
both monitors the fees paid to Fidelity Management Trust
Company (“Fidelity”), the designated recordkeeper
and trustee for the Plan, and guides the selection,
monitoring, and removal and replacement of Plan investments.
Those decisions are informed by an Investment Policy
Statement (“IPS”) (see Motion App., Exh.
A.4. at 267-273) and assisted by an independent consultant,
Mercer Investment Counseling (“Mercer”), which
assists the Committee in monitoring and managing the
Plan's investment options and costs.
addressing the substance of plaintiffs' claims, I first
address their evidentiary objections to certain evidence
submitted in support of the summary judgment motion and
consider defendants' statute of limitations arguments.
discovery in this case closed December 1, 2017. Plaintiffs
object to seven documents produced by defendants after that
date which are appended to and referenced in the motion for
summary judgment. Specifically, these are
(1) A November 30, 2017, email to Peter Shott, Vice President
of Human Resources at Oracle Corporation, from Troy Saharic,
a consultant with Mercer Investment Counseling
(“Mercer”), discussing recordkeeping fees for
similar size plan sponsors (Motion App., Exh. C.1. [#134-11]
(2) A February 2, 2018, email from Devon Muir of Mercer to
Mr. Shott detailing recordkeeping fees paid by other large
Fidelity clients (Motion App., Exh C.2. [#134-11] at 11-13);
(3) A February 8, 2018, email to Mr. Shott from Jim Pujats of
Fidelity offering to reduce the per-participant recordkeeping
fee from $28 to $27 (Motion App., Exh. C.3. [#134-11] at
(4) The Plan's 2018 Participant Disclosure Notice
provided to Plan participants by Fidelity, as required by 29
C.F.R. § 2550.404a-5, created March 12, 2018 (Motion
App., Exh. A.1. [#134-2] at 10-25);
(5) A copy of Mercer's February 14, 2018
“4th Quarter 2017 Investment Review”
(Motion App., Exh. A.2 [#134-2] at 26-107);
(6) A copy of the minutes for the November 8, 2017, Committee
meeting (Motion App., Exh. A.3. [#134-2] at
(7) A copy of a presentation entitled “Driving
Value” given by Mr. Pujats to members of the Committee
on December 19, 2017 (Motion App., Exh. A.20. [#134-5] at
should be readily apparent from this list, all but one of
these documents reflect events occurring after the
close of discovery; the one exception is an email sent the
day before the discovery deadline. As a matter of simple,
linear time it was not possible for defendants to have
produced these documents prior to the close of discovery.
parties have a duty under Rule 26(e)(1) to timely supplement
their prior discovery disclosures, a duty about which
plaintiffs specifically reminded defendants not two weeks
after the close of discovery. More specifically, plaintiffs
demanded defendants “supplement their production of
Committee minutes and materials that were prepared by the
Committee or third parties in connection with the meetings,
including Mercer Investment Reviews. This would include
materials prepared after the May 10, 2017 meeting.”
(Resp. to Obj. App., Exh. A.1. [#163-1 at 5].)
compliance with this request and their duties under Rule 26,
defendants supplemented their responses in January (document
#5 above), February (document #1 & #7 above), March
(document #6 above), and April 2018 (document #2, #3, &
#4 above). Plaintiffs do not object that these documents were
not timely produced once they were created or received by
defendants, and I see no basis to conclude otherwise. There
thus is no basis to exclude this evidence under Rule
objections based on hearsay and lack of foundation are wholly
conclusory and completely undeveloped. I am neither required
nor inclined to guess at the substance of such arguments.
See Healthtrio, LLC v. Aetna, Inc., 2014 WL 5473739
at *7 (D. Colo. Oct. 29, 2014) (arguments which are
“conclusory and underdeveloped [do] not merit further
consideration by the court”). Similarly,
plaintiffs' attempt to substantiate their arguments by
way of their reply creates no inclination or obligation on my
part to address them. See White v. Chafin, 862 F.3d
1065, 1067 (10thCir. 2017); Hubbard v.
Nestor, 2019 WL 339823 at *1 (D. Colo. Jan. 25, 2019).
I overrule plaintiffs' objections and will consider the
documents if and where appropriate.
Statute of Limitations
certifying this matter as a class action, I defined all three
subclasses to commence on January 1, 2009, noting it was
premature to determine at that juncture whether plaintiffs
could establish facts sufficient to toll limitations.
(See Order Re: Plaintiffs' Motion for Class
Certification at 4-5 [#119], filed January 30, 2018.) I now
find and conclude plaintiffs have failed to adduce sufficient
evidence in that regard. Accordingly, any claim based on
conduct occurring before January 22, 2010, is time-barred.
[n]o action may be commenced under this subchapter with
respect to a fiduciary's breach of any responsibility,
duty, or obligation under this part, or with respect to a
violation of this part, after the earlier of - (1) six years
after (A) the date of the last action which constituted a
part of the breach or violation, or (B) in the case of an
omission the latest date on which the fiduciary could have
cured the breach or violation. . . .
29 U.S.C. § 1113(1). This provision is a statute of
repose, which ordinarily operates to “extinguish a
plaintiff's cause of action whether or not the plaintiff
should have discovered within that period that there was a
violation or an injury.” Fulghum v. Embarq
Corp., 785 F.3d 395, 413 (10th Cir. 2015)
(citation and internal quotation marks omitted). However,
Congress has provided an exception under which, “in the
case of fraud or concealment, ” a civil enforcement
action “may be commenced not later than six years after
the date of discovery of [the] breach or violation.” 29
U.S.C. § 1113. In creating this exception, Congress
“effectively restored the judicial doctrines of
equitable tolling and equitable estoppel to selected ERISA
breach of fiduciary duty claims.” Fulghum, 785
F.3d at 416.
the term “concealment” is not defined in ERISA,
court relies on the ordinary meaning of the term at the time
Congress enacted the statute. Id. at 415. Thus,
“concealment” is the withholding “of that
which should have been disclosed, which deceives and is
intended to deceive another so that he shall act upon it to
his legal injury or when the defendant conceals the alleged
breach of fiduciary duty.” Id. Plaintiffs
argue that this standard is met here because (1) the
Plan's 2009 IRS Form 5500 did not reveal the amount of
Fidelity's compensation; and (2) the Plan's 2012
Participant Fee Disclosure represented that “no plan
administrative fees were to be deducted from accounts in the
Plan.” Neither argument has traction.
suggestion that the Plan's Form 5500 did not report the
amount of Fidelity's compensation is simply wrong. By
directing the court to a single line in that 173-page
document (see Resp. App., Exh. 68 [#154-69] at 5) -
which itself acknowledges the Plan paid Fidelity both direct
and indirect compensation - plaintiffs conveniently
ignore the remainder of the document, which substantiates the
amount of “eligible indirect compensation, ”
including revenue-sharing, paid to Fidelity (see Id.
at 7- 173). Plaintiffs do not suggest or circumstantiate that
the information therein provided was inaccurate or that the
Plan otherwise failed to provide any other information the
form required. There thus is no evidence of concealment.
Moreover, the named plaintiffs have acknowledged they never
saw this form. (See Motion App., Exhs. B.5 [#134-10]
at 39, B.6 [#134-10] at 45-47, B.7 [#134-10] at 52-53, B.8
[#134-10] at 59-60, B.9 [#134-10] at 65-67, & B.10
[#134-10] at 72-73.) They can hardly have relied on or been
deceived by the form under those circumstances. See
Jacobs v. Verizon Communications, Inc., 2017 WL 8809714
at *15 (S.D.N.Y. Sept. 28, 2017).
representation in the Participant Fee Disclosure that
“no plan administrative fees were to be deducted from
accounts in the Plan” is similarly taken out of
context, and inaccurate in any event. The statement itself
was made in a subparagraph discussing direct
deductions from individual accounts. As explained more fully
below, revenue-sharing is an alternative to such direct
charges to Plan participants. Morever, this language was
included in a larger section entitled “Fees and
Expenses, ” which addressed the type of fees to which
participant accounts might be subject, including,
particularly, “asset-based fees, ” and explained
how such fees were calculated and paid. (See Partial
Opp. to Motion for Class Cert. App., Exh.A.3 [#107-1] at
46-47.) Specifically, the document informed participants that
“asset-based fees are reflected as a percentage of
assets invested in the option and often are referred to as an
‘expense ratio.'” (Id. at 47.) The
tables which followed then disclosed the expense ratios for
each of the investments offered by the Plan. (See
Id. at 48-52.) Plainly, these matters were not
plaintiffs have offered no argument or evidence suggesting
defendants concealed anything related to the fiduciary
breaches alleged in Count II, involving the Plan's
allegedly improvident investments in several funds. Those
claims, too, therefore will be limited to matters occurring
within six years of the date of the filing of this lawsuit.
I find ERISA's statute of repose is applied properly here
to limit plaintiffs' claims to matters occurring on or
after January 22, 2010, six years prior to the date the
complaint was filed. Defendants' motion for summary
judgment is granted to that extent. The class definitions
approved in my Order Re: Plaintiffs' Motion for Class
Certification will be amended to reflect this limitation.
ERISA, plan participants, beneficiaries, and fiduciaries may
“bring actions on behalf of a plan to recover for
violations of the obligations defined in [29 U.S.C. §
1109].” LaRue v. DeWolff, Boberg & Associates,
Inc., 552 U.S. 248, 253, 128 S.Ct. 1020, 1024, 169
L.Ed.2d 847 (2008) (citing 29 U.S.C. § 1132(a)(2)).
“The principal statutory duties imposed on fiduciaries
by [section 1109] relate to the proper management,
administration, and investment of fund assets, with an eye
toward ensuring that the benefits authorized by the plan are
ultimately paid to participants and beneficiaries.”
Id., 128 S.Ct. at 1024 (citation and internal
quotation marks omitted). ERISA's fiduciary's duties
are derived from and informed by the common law of trusts,
Tibble v. Edison International, ___ U.S. ___, 135
S.Ct. 1823, 1828, 191 L.Ed.2d 795 (2015), which are among the
highest known to law, La Scala v. Scrufari, 479 F.3d
213, 219 (2nd Cir. 2007). Nevertheless, while
“the law of trusts often will inform”
determination of issues under ERISA, it “will not
necessarily determine the outcome of, an effort to interpret
ERISA's fiduciary duties.” Varity Corp. v.
Howe, 516 U.S. 489, 497, 116 S.Ct. 1065, 1070, 134
L.Ed.2d 130 (1996).
imposes on fiduciaries twin duties of loyalty and prudence.
See 29 U.S.C.A. §§ 1104(a)(1)(A) &
See also Tussey v. ABB, Inc., 746 F.3d 327, 335
(8th Cir.), cert. denied, 135 S.Ct. 477
(2014). The burden is on plaintiffs to prove defendants
breached their fiduciary duties, resulting in losses to the
Plan. Pioneer Centres Holding Co. Employee Stock
Ownership Plan & Truest v. Alerus Financial, N.A.,
858 F.3d 1324, 1337 (10th Cir. 2017), cert.
dismissed, 139 S.Ct. 50, (2018).
duty of loyalty requires a fiduciary to “discharge his
duties with respect to a plan solely in the interest of the
participants and beneficiaries and for the exclusive purpose
of: (i) providing benefits to participants and their
beneficiaries; and (ii) defraying reasonable expenses of
administering the plan.” 29 U.S.C. §
1104(a)(1)(A). Generally speaking, this aspect of ERISA
prohibits self-dealing and sales or exchanges between the
plan and “parties in interest” or
“disqualified” persons. See 29 U.S.C.
§ 1106. See also Massachusetts Mutual Life Insurance
Co. v. Russell, 473 U.S. 134, 143 n.10, 105 S.Ct. 3085,
3091 n.10, 87 L.Ed.2d 96 (1985); Womack v. Orchids Paper
Products Co. 401(K) Savings Plan, 769 F.Supp.2d 1322,
1332 n.7 (N.D. Okla. 2011).
ERISA fiduciary owes a duty also to plan participants and
beneficiaries to discharge his responsibilities using
“the care, skill, prudence, and diligence under the
circumstances then prevailing that a prudent man acting in a
like capacity and familiar with such matters would use in the
conduct of an enterprise of a like character and with like
aims[.]” 29 U.S.C.A. § 1104(a)(1)(B). The
appropriate yardstick of a fiduciary's duty of prudence
under ERISA “is not that of a prudent lay person, but
rather that of a prudent fiduciary with experience dealing
with a similar enterprise.” Tibble v. Edison
International, 2017 WL 3523737 at *10 (C.D. Cal. Aug.
16, 2017) (citation and internal quotation marks omitted).
The prudent person standard is an objective one which
“focuses on the fiduciary's conduct preceding the
challenged decision - not the results of that
decision.” Tussey, 746 F.3d at 335 (citation
and internal quotation marks omitted). Relatedly,
“[b]ecause the fiduciary's obligation is to
exercise care prudently and with diligence under the
circumstances then prevailing, his actions are not to be
judged from the vantage point of hindsight.” Chao
v. Merino, 452 F.3d 174, 182 (2ndCir. 2006)
(citations and internal quotation marks omitted). See
also Osberg v. FootLocker, Inc., 138 F.Supp.3d
517, 552 (S.D.N.Y. 2015) (“A court should not find that
a fiduciary acted imprudently in violation of ERISA ...