A federal judge in Nashville, Tenn., rejected a request by AHS Management Co. to throw out allegations by 401(k) participants of ERISA violations in the plan's management.
The plaintiffs sued the manager of hospitals and clinics in December 2019 complaining about record-keeping fees and the plan's investment options, some of which were more expensive and/or worse-performing than similar identical investments in the marketplace, they argued.
The defendants asked the judge for summary judgment. "Because defendants have failed to demonstrate the absence of material disputes of fact, their motion for summary judgment will be denied," wrote U.S. District Court Judge William Lynn Campbell Jr. in McCool et al. vs. AHS Management Co. Inc. et al.
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.
"The party bringing the summary judgment motion has the initial burden of informing the court of the basis for its motion and identifying portions of the record that demonstrate the absence of a genuine dispute over material facts," Mr. Campbell wrote.
"Viewing the evidence in the record in the light most favorable to plaintiffs, genuine issues of material fact … preclude summary judgment on the investment options claims," the judge wrote. He used similar language in rejecting the defendants' motion for summary judgment regarding the excessive record-keeping claim.
Plaintiffs also alleged that the defendants failed in their duty to monitor fiduciaries in violation of ERISA. The defendants asked for summary judgment, but the judge turned down this request, too.
Ardent Health Services Retirement Savings Plan, Nashville, Tenn., had $1.3 billion in assets as of Dec. 31, 2021, according to the latest Form 5500.