A federal court judge in Dallas dismissed a complaint by five former employees of United Surgical Partners International Inc., who accused the company and its fiduciaries of violating ERISA in a now-terminated 401(k) plan.
The complaint covers the period from April 15, 2015, to Dec. 31, 2018, after which the plan was merged into a Tenet Healthcare 401(k) plan.
United Surgical, Addison, Texas, is a subsidiary of Tenet Healthcare, Dallas, but the parent isn't a defendant in Perkins et al. vs. United Surgical Partners International Inc., et al.
The plaintiffs sued in April 2021, alleging fiduciaries kept certain investment options in the plan even though similar or identical options were available that were cheaper and/or better performing.
They also claimed fiduciaries violated their ERISA duties by allowing allegedly excessive record-keeping and administrative costs. They sought class-action status.
"Although the complaint alleges that the defendants' actions 'cost the plan and its participants millions of dollars,' it contains no specific allegations as to how the plaintiffs sustained an individualized and particular injury," U.S. District Court Judge Brantley Starr wrote March 18.
"By failing to allege injury to their own investment accounts or their investment in of any of the challenged funds, the plaintiffs have alleged an injury to the plan and participants generally, but not to the individual plaintiffs themselves," Mr. Starr wrote.
"Plaintiffs have failed to plead sufficient factual allegations about the plan's offered services and fee structures for the court to infer more than a possibility of misconduct," he added.
However, Mr. Starr gave the plaintiffs the opportunity to amend their complaint within 28 days.
The United Surgical Partners International Inc. 401(k) Plan had $456 million in assets as of Dec. 31, 2018, the last year of its existence, according to court records.
