A U.S. District Court in Baltimore cleared the way for a trial to assess whether fiduciaries of a T. Rowe Price Group 401(k) plan violated terms of ERISA as alleged by plan participants.
Participants in the T. Rowe Price U.S. Retirement Plan, Owings Mills, Md., sued the company and plan fiduciaries in February 2017, complaining, among other things, that the plan only offered proprietary mutual funds and that these were retail-priced funds instead of less expensive institutional-priced funds that were available.
U.S. District Judge James K. Bredar rejected the company's petition to dismiss all seven counts of allegations by participants in the case of Feinberg et al. vs. T. Rowe Price Group Inc. et al. in August 2018.
T. Rowe Price subsequently asked the judge to issue a summary judgment in favor of the company, but Mr. Bredar only granted summary judgment on one count in his ruling Tuesday.
Federal rules of civil procedure say summary judgment can be granted if the party seeking this ruling can show "that there is no genuine dispute as to any material fact" and that it is "entitled to judgment as a matter of law," the judge's ruling said.
To defeat the defendants' request for summary judgment, "plaintiffs need only produce evidence that, if accredited, would be sufficient for a fact-finder to surmise that defendants took some unlawful actions and thereby caused plaintiffs at least some harm," he wrote.
Given those guidelines, "plaintiffs have largely cleared the low bar that avoids summary judgment in favor of their opponent," he wrote. "Accordingly, they are entitled to proceed to trial."
Despite rejecting most of T. Rowe Price's arguments, the judge made some favorable comments about the company's 401(k) plan.
"Though defendants showed a preference for in-house funds, those funds have generally performed well, as attested by the fact that the plan's assets have more than tripled in value in the relevant period," he wrote.
"The record reflects that the fees plaintiffs characterized as highly exceptional in their pleadings were midmarket for peer group investment vehicles," he added. "This evidence does not conform with plaintiffs' allegations of shocking and pervasive mismanagement."
The T. Rowe Price U.S. Retirement Plan, Owings Mills, Md., had $3.1 billion in assets as of Jan. 31, 2020, according to the judge's ruling.