A U.S. District Court judge in Chicago has rejected a request by Walgreen Co. to dismiss an ERISA lawsuit against the company and its fiduciaries, thus allowing the complaint to go to trial.
The complaint in the case of Chandra Brown-Davis et al. vs. Walgreen Co. et al. focuses on a Walgreen profit-sharing plan's use of a target-date series provided by Northern Trust Asset Management.
Several current and former plan participants alleged that Walgreen's fiduciaries violated ERISA requirements by keeping the "underperforming" target date series and failing to "properly monitor the fiduciaries' behavior." Northern Trust isn't a defendant.
The participants sued in August, citing the 10 vintages of the Northern Trust target-date series. Walgreen petitioned the court to dismiss the case.
However, Judge Charles Ronald Norgle rejected Walgreen's request, except for dismissing complaints involving two of the target-date vintages because plaintiffs hadn't invested in them.
The plaintiffs' allegations that a prudent fiduciary would have acted differently and that Walgreen failed to monitor fiduciaries met legal requirements so that "discovery should proceed on both counts," the judge wrote Monday. Discovery is the procedure for exchanging data and other information by opposing parties prior to a possible trial.
"Defendants' arguments may prove successful at the summary judgment stage or beyond," the judge wrote. "Plaintiffs' claims may ultimately fail if they rely solely on evidence of underperformance."
The Walgreen Profit-Sharing Retirement Plan, Deerfield, Ill., had assets of $10.14 billion as of Dec. 31, 2018, according to the latest Form 5500 filing.