A federal court judge in Chicago rejected some of the requests for dismissal by Astellas US LLC and Aon regarding ERISA complaints by participants in an Astellas 401(k) plan.
U.S. District Judge Ronald A. Guzman on April 13 delivered the complex, divided decision — some dismissal requests were granted, others were denied — in the case of Miller et al. vs. Astellas US LLC et al.
The participants sued in July 2020, alleging ERISA violations against Astellas, a pharmaceutical company in Northbrook, Ill., and what was then called Aon Hewitt Investment Consulting, the sponsor's investment adviser.
Plaintiffs contended that the Astellas fiduciaries failed to negotiate "reasonable" fees. The plaintiffs said the sponsor failed to thoroughly investigate the collective investment trusts offered by Aon that Astellas used to replace existing mutual funds in the plan. The participants accused Aon of having a conflict of interest by providing the CITs and acting as the investment adviser.
The defendants asked the court to dismiss the complaint.
The judge rejected Aon's motion to dismiss the allegation of breach of fiduciary duty regarding its offering of the CITs. "Plaintiffs need not 'show' anything for purposes of a motion to dismiss," the judge wrote. "They need only plausibly allege that Aon put its own interests ahead of those of plan beneficiaries, which plaintiffs have done."
The Astellas defendants made a similar dismissal request regarding its allowing the CITs, but the judge granted their petition. "The allegation that the Astellas defendants 'partnered' with Aon to overhaul the plan's investment options is far too vague to permit an inference of such conduct," he wrote.
However, he denied the Astellas defendants' request to dismiss several other counts in the lawsuit for which the participants are seeking class-action status.
For example, he refused to dismiss participants' claims that the Astellas defendants breached their fiduciary duties by offering higher-cost shares in the plan. "Plaintiffs complain that the lower-cost shares of the same funds were not made available to them, and there is a limited menu of investment options," he wrote.
He also rejected the Astellas defendants' request for dismissing participants' arguments that sponsors violated ERISA by failing to monitor Aon. Because plaintiffs assailed the process by which Aon selected investments to promote these options and "benefit itself," this argument "nudges the parallel duty-to-monitor claim against the Astellas defendants across the line from conceivable to plausible," he wrote.
The Astellas U.S. Retirement and Savings Plan, Northbrook, Ill., had assets of $1.2 billion as of Dec. 31, 2019, according to the latest Form 5500.