A federal judge in Las Vegas has rejected a request by the parent company of Allegiant Air to dismiss a lawsuit by a 401(k) plan participant who alleged ERISA violations due to mismanagement.
The participant, a former employee, sued in October 2022, complaining about high record-keeping fees and a target-date series from Fidelity Investments for which a lower-priced share class was available. Fidelity isn't a defendant.
Even though the plaintiff didn't invest in the Fidelity target-date series, U.S. District Court Judge Jennifer A. Dorsey ruled Oct. 4 that the case could go to trial based on the record-keeping allegations in Robert Cevasco vs. Allegiant Travel Co., which is seeking class-action status.
"Despite Cevasco's inability to establish standing related to (the Fidelity funds), dismissal is not warranted," Dorsey wrote.
"Allegiant does not challenge Cevasco's individual standing to bring a claim for excessive record-keeping fees affecting all plan participants," the judge wrote. "So Cevasco's individual standing to bring on an ERISA claim for breach of fiduciary prudence under at least one theory of liability is uncontested."
Allegiant 401(k) Retirement Plan, Las Vegas, had $371 million in assets as of Dec. 31, 2021, according to the latest Form 5500.
