A federal judge in Los Angeles has rebuffed a request by Prime Healthcare Services Inc. and its fiduciaries to reject allegations of ERISA violations in a company 401(k) plan, allowing the case to proceed to trial.
U.S. District Court Judge Josephine L. Staton ruled on Sept. 19 that the plaintiffs — former employees — had provided sufficient information to support their claims of retaining poor-performing investments, charging high record-keeper fees and failing to consider total plan costs.
The judge rejected a summary judgment request by the owner and operator of hospitals in the case of In re: Prime Healthcare ERISA litigation — a consolidation of two similar ERISA complaints filed in 2020, in which plaintiffs are seeking class-action status.
A motion for summary judgment is usually filed after the parties have completed discovery, giving a judge the opportunity to review details of a case. A motion to dismiss, usually requested soon after a complaint is filed, argues that the plaintiff has failed to state a claim.
The judge cited comments from experts hired by the plaintiffs to explain the allegations covering investment choice, record-keeping fees and total plan costs.
"The court rejects defendants' request to disregard plaintiffs' expert evidence when evaluating the defendants' motion for summary judgment," the judge wrote.
Prime Healthcare Services Inc. 401(k) Plan, Ontario, Calif., had assets of $1.6 billion as of Dec. 31, 2021, according to the latest Form 5500.
