A federal judge in San Francisco has declined Genentech Inc.'s request for ending a lawsuit filed nearly three years ago by a former employee who said the company's 401(k) plan violates ERISA due to excessive record-keeping and administrative fees.
The decision by Chief U.S. District Judge Richard Seeborg focused on the plaintiff's request — and Genentech's opposition — to use comments by the plaintiff's fee expert, Michael Geist, when the case goes to trial.
Genentech asked the judge to exclude the proposed testimony and grant summary judgment in favor of the defendants, but he supported the plaintiff in the class-action case of Matthew Wehner vs. Genentech Inc. et al.
"Though plaintiff's claims for breach of fiduciary duty appear uncertain, the availability of Geist's testimony leads to disputes of material fact that caution against summary judgment," the judge wrote.
A motion for summary judgment is usually filed after the parties have completed discovery, giving a judge the opportunity to review details of a case. A motion to dismiss, usually requested soon after a complaint is filed, argues that the plaintiff has failed to state a claim.
After reviewing Mr. Wehner's allegations of mismanaging the record-keeping process, the judge concluded: "This oversight, if indeed it was one, may not ultimately be sufficient to demonstrate imprudence (under ERISA). But at this stage, there is sufficient dispute on the issue to foreclose summary judgment for then defendants."
The judge set Oct. 30 for a bench trial.
Mr. Wehner sued Genentech and its plan fiduciaries in October 2020 accusing them of ERISA violations due to high record-keeping fees, excessive management fees and the retaining of expensive, poor-performing investments.
A federal court judge in San Francisco dismissed the lawsuit in February 2021. The plaintiff filed an amended complaint. The judge in June 2021 allowed the record-keeping allegation to proceed.
Genentech is a subsidiary of Roche Group, which is not a defendant.
The U.S. Roche 401(k) Savings Plan, South San Francisco, Calif., had assets of $12.4 billion as of Dec. 31, 2021, according to the latest Form 5500.