A U.S. District Court judge in New Haven, Conn., supported the plaintiffs in their allegations that Eversource Energy Co. and its 401(k) plan fiduciaries violated ERISA by failing to disclose the expenses and risks of investment options while keeping poor-performing and/or high-cost investment options.
Four current and former plan participants sued in June 2020 in Garthwait et al. vs. Eversource Energy Co. et al. The plaintiffs are seeking class-action status.
The defendants subsequently filed a motion for summary judgment, which U.S. District Judge Janet C. Hall rejected July 29 "because genuine issues of material fact remain as to each of the plaintiffs' claims."
The parties' disputes over facts such as the fiduciaries' monitoring of the plan, certain investments and fees were "reasonable" prompted Ms. Hall to reject the defendants' request.
"Each of these questions turns on contested factual issues, including the defendants' conduct and involvement in monitoring the funds," Ms. Hall wrote.
Another dispute focused on the plaintiffs' allegation that defendants breached ERISA's duty of loyalty, a standard assessing whether fiduciaries acted in the best interests of participants. "Because a reasonable juror could find in the plaintiffs' favor on the basis of the record of evidence, which includes conflicting expert testimony, the court cannot resolve these questions as a matter of law," the judge wrote.
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 Eversource 401(k) Plan, Hartford, Conn., had $4.04 billion in assets as of Dec. 31, 2020, according to the latest Form 5500.
