A federal judge in Denver has allowed an ERISA lawsuit to proceed to trial against DaVita Inc., rejecting the company's request to dismiss all allegations by former employees who alleged mismanagement of a 401(k) plan.
"The court finds plaintiffs have suffered a particularized injury with respect to record-keeping fees," U.S. District Court Judge William J. Martinez wrote on July 26 in the case of Teodosio et al. vs. DaVita Inc. et al.
The plaintiffs, who are seeking class action-status, sued in 2022 and later amended their complaint. In addition to their record-keeping argument, they contended plan executives violated ERISA by retaining several investments that were more expensive than similar investments in comparable plans.
However, Mr. Martinez supported the company's request to dismiss the investment-fee allegation. "Since it is undisputed that none of the plaintiffs invested in any of the challenged funds, the court finds they lack standing to bring their breach of fiduciary duty claim under a management fee theory," he wrote.
The judge wrote that plaintiffs could file an amended complaint by Aug. 31.
The DaVita Retirement Savings Plan, Denver, had assets of $3.13 billion as of Dec. 31, 2021, according to the latest Form 5500 filing.