A federal judge delivered a split decision in a lawsuit against Packaging Corp. of America, dismissing four allegations of ERISA violations in the management of a 401(k) plan but rejecting the company's motion to dismiss two other allegations.
The company and plan fiduciaries were sued in March 2022 by a former plan participant, seeking class-action status, for an assortment of complaints relating to fees, investment selection and record keeping in Miller vs. Packaging Corp. of America Inc.
"Miller has stated a plausible claim insofar as he alleges that defendants failed to comply with their duty of prudence in connection with the selection and monitoring of investment options," Chief U.S. District Judge Hala Y. Jarbou, Lansing, Mich., wrote March 30.
"Defendants' decision-making process is the focus of Miller's fiduciary duty claim, rather than the particular funds defendants chose," Mr. Jarbou wrote. "Thus, the court will not dismiss this aspect of the claim."
The judge also declined to dismiss the plaintiff's allegation of the company failing to monitor fiduciaries as it relates to the investment-option allegation.
Mr. Jarbou dismissed the allegation that the defendants paid too much for managed account services because it is "unsupported by any facts."
The judge also dismissed the allegation of excessive record-keeping and administrative fees. "Miller provides no facts to support his assertion that a competitive bidding process is the 'only' way to determine a reasonable price" for record-keeping and administrative services, he wrote.
Mr. Jarbou also dismissed failure-to-monitor claims linked to the record-keeping and managed-account allegations. Because the failure-to-monitor claims were linked to the dismissed allegations, the judge also dismissed these claims.
Packaging Corp. of America Retirement Savings Plan for Salaried Employees, Lake Forest, Ill., had $1.5 billion in assets as of Dec. 31, 2021, according to the latest Form 5500