A U.S. District Court Judge in Chicago has dismissed a complaint against Abbott Laboratories and its fiduciaries that alleged ERISA violations because a participant's account was looted by an impostor.
However, the judge refused to dismiss the complaint against Alight Solutions, the plan's record keeper, and a co-defendant in the case of Bartnett vs. Abbott Laboratories et al.
The participant, Heide K. Bartnett, is a former employee of Abbott who kept her retirement money in the company's 401(k) plan.
In the complaint, Ms. Bartnett said that $245,000 was transferred from her account without her knowledge. She blamed the defendants for allowing the money to be transferred to an internet address in India before she could take steps to stop the fraud.
She sued the defendants in April, accusing them of failing to act promptly to detect and prevent the theft of her retirement account.
"The complaint fails to allege any fiduciary acts taken by Abbott Labs, no less link them to the alleged theft," U.S. District Court Thomas N. Durkin wrote in his Oct. 2 opinion. "And while the complaint alleges that the call center and website were used to perpetuate the theft, it also indicates that both are operated by Alight."
Bartnett contended Abbott is a "functional fiduciary because all defendants failed to take necessary steps to protect plan assets," the judge noted. "But alleging what all defendants failed to do does not establish whether any individual defendant is a fiduciary under the statute."
Alight had asked the judge to dismiss the case, saying it wasn't a fiduciary to the plan and that the functions it performed for the plan didn't fit the legal terms of being a fiduciary.
"The court rejects both arguments," the judge wrote. "There are sufficient allegations on the face of the complaint to infer that Alight acted as a fiduciary by exercising discretionary control or authority over the plan's assets."
The judge set a status hearing by phone 21 days after his ruling "at which the parties should be prepared to set a discovery schedule" — the exchange of data and information that is the first step in a trial.
He also gave Ms. Bartnett 21 days to file an amended complaint against the Abbott defendants, or else all claims against them will be dismissed permanently.