A federal court judge in Alexandria, Va., has dismissed for a second time a lawsuit against Booz Allen Hamilton Inc. and its fiduciaries filed by a former 401(k) plan participant, who alleged ERISA violations due to the plan's retaining a BlackRock target-date series.
U.S. District Court Judge Michael S. Nachmanoff dismissed the original complaint on Dec. 1, and he wrote on March 1 that an amended complaint didn't address the legal weaknesses in Tullgren vs. Booz Allen Hamilton Inc. et al. "The amended complaint fails to state a claim for fiduciary breach under ERISA because plaintiff relies solely on the performance of the BlackRock TDFs," the judge wrote
Booz Allen Hamilton is one of 11 companies being sued by current and former retirement plan participants for the same alleged ERISA violations linked to their offering of the BlackRock LifePath Index Fund. They claim the BlackRock series fares poorly compared to target-date series from four other providers — two, like the BlackRock series, are passively managed, and two are actively managed.
BlackRock isn't a defendant in any of cases, in which plaintiffs are represented by Miller Shah LLP as lead counsel or co-counsel.
Target-date lawsuits against Capital One Financial Corp. — plaintiffs have filed an amended complaint — and Microsoft Corp. have been dismissed by U.S. district court judges.
Mr. Tullgren sued in August 2022. Following dismissal of this lawsuit, he filed an amended complaint in December 2022. The court held an oral argument on Feb. 3.
"The amended complaint is completely devoid of facts about the particular decision-making process undertaken by defendants with respect to the plan at issue here," the judge wrote.
"When the court dismissed plaintiff's original complaint, it concluded that plaintiff failed to set out circumstantial factual allegations from which the court could reasonably infer that the decision to retain the BlackRock TDFs was the product of a flawed decision-making process," the judge wrote, adding that the amended complaint didn't correct these deficiencies.
"ERISA simply does not provide a cause of action for fiduciary breaches based solely on a fund participant's disappointment in the fund's performance," the judge wrote.
"That the BlackRock TDFs were allegedly outperformed by some other TDFs at some points during a three- or five-year window, without more, does not suggest that offering the BlackRock TDFs fell outside the 'range of reasonable judgments' that fiduciaries may make," he added.
The judge dismissed the amended complaint "with prejudice," meaning the plaintiff cannot re-file the lawsuit in his court.
The Booz Allen Hamilton Inc. Employees Capital Accumulation Plan, McLean, Va., had $7.85 billion in assets as of Dec. 31, 2021, according to the latest Form 5500.