A federal judge in Los Angeles dismissed another class action filed against Trader Joe's Co. and other related parties that alleged a series of ERISA violations in managing the grocery store chain's $1.7 billion 401(k) plan.
Managers chose higher cost mutual fund shares over less expensive options, allowed the plan to pay "unreasonable" record-keeping fees, and failed to put its record-keeping contract up for rebid, according to the suit, Richard Kong et. al. vs. Trader Joe's Co. et. al., filed June 29.
U.S. District Judge Percy Anderson granted the defendants' motion to dismiss on Sept. 24, citing that the plaintiffs failed to properly support their case with sufficient facts.
For example, Mr. Anderson wrote that the court found that the plaintiffs failed "to allege any facts to support their allegation that defendants do not adequately monitor the plan or investigate the availability of lower cost mutual funds."
The court also found that the suit failed to offer any facts suggesting that the record-keeping fees being paid were unreasonable. The judge also found that the plaintiffs "failed to allege any facts ... (proving) that a competitive bidding service would have benefited the plan."
Mr. Anderson dismissed a similar ERISA suit against Trader Joe's, Marks and Bowling vs. Trader Joe's Co., in April, a case he cited numerous times throughout his Sept. 24 decision.
The judge said plaintiffs could file an amended complaint within 14 days.
