A federal judge in Denver dismissed an ERISA lawsuit against DISH Network Corp. filed by former employees who accused the company and its fiduciaries of mismanaging a 401(k) plan.
The plaintiffs sued in January 2022, seeking class-action status for their complaint, which contained allegations of excessive record-keeping fees, poor investment choices, failing to monitor fiduciaries' actions and putting their own interests ahead of participants' interests.
Senior U.S. District Court Judge Christine M. Arguello dismissed the lawsuit — Jones et al. vs. DISH Network Corp. et al. — on March 27, giving plaintiffs 14 days to file an amended complaint.
Ms. Arguello dismissed the record-keeping complaint because plaintiffs "provided (a) comparison of the Plan's average fee over five years with the fees of other plans from a single year," she wrote.
Such a comparison "is inapt and insufficient for the court to plausibly infer that the plan's (record keeping and administrative) fees were excessive."
She rejected the plaintiffs' argument that plan executive should have chosen a passively managed target-date series instead of an actively managed one, both offered by Fidelity Investments. Fidelity isn't a defendant.
"It is insufficient to simply allege that an investment did poorly, and therefore a plaintiff was harmed," Ms. Arguello wrote.
"Plaintiffs make no direct factual allegations regarding defendants' process for monitoring the active (target-date) suite," she added. "Plaintiffs do not allege that offering an actively managed fund is per se imprudent, and, regardless, case law does not support such a position."
The judge rejected the plaintiffs' argument that retaining an allegedly poor-performing Royce Total Return Fund Institutional Class was an ERISA violation because none of the plaintiffs invested in the fund.
She also dismissed the plaintiffs' contention that the defendants acted in their self-interest at the expense of participants because there are "simply no factual allegations" to support that claim.
DISH Network Corp. 401(k) Plan, Englewood, Colo., had $945 million in assets as of Dec. 31, 2021, according to the latest Form 5500.