A federal judge in Atlanta has ordered a trial to resolve ERISA fiduciary breach claims by participants in a SunTrust Banks Inc. 401(k) plan against the company and plan fiduciaries.
U.S. District Judge Orinda D. Evans ordered the trial after rejecting a SunTrust request for summary judgment against all eight ERISA claims made by the participants. A trial date has yet to set.
In her Oct. 3 ruling, the judge supported SunTrust on five claims but supported that plaintiffs on three claims in the case of Fuller et al. vs. SunTrust Banks Inc. et al.
The participants sued in March 2011 — and amended their complaint in December 2017 — alleging that the fiduciaries violated their ERISA duties by putting eight SunTrust proprietary investments in the plan lineup.
In seeking class-action status, the participants filed separate counts for each investment. The class period ran from March 2005 through December 2012.
In rejecting SunTrust's request for summary judgment on all eight counts, the judge wrote that she "finds enough circumstantial evidence exists to create a genuine issue of material fact as to whether defendants breached their duty of loyalty to the plan."
Citing the fiduciaries' "differing treatment" of some proprietary funds vs. other funds in the investment lineup, the judge wrote that such behavior "suggests defendants may have prioritized benefiting SunTrust over benefiting plan participants."
The judge added that participants hadn't proved their claims on all counts.
"Plaintiffs' generalized evidence is insufficient on its own, however, to raise a question of material fact as to whether defendants prudently monitored and retained each" of the SunTrust investment options, she wrote.
"Plaintiffs must also have evidence of imprudence for each affiliated fund individually," she wrote.
After reviewing the plan executives' specific actions on each of the eight funds, the judge declared that a trial could proceed on three of them.
The SunTrust Banks Inc. 401(k) plan had assets of $3.34 billion as of Dec. 31, 2017, according to the latest 401(k) statement.