A U.S. District Court judge in Atlanta on Dec. 17 dismissed a class-action ERISA fiduciary breach lawsuit against Cumulus Media Inc. that alleged the company mismanaged the investment management of its 401(k) plan.
The lawsuit, originally filed in February, alleged Atlanta-based Cumulus breached its fiduciary duties under the Employee Retirement Income Security Act of 1974 by not using the lowest-cost share classes of investment options offered in the plan, according to the original court filings.
The plan switched to lower share classes in 2019, but the lawsuit said the changes were "too little, too late," according to the original court filing.
Judge Thomas W. Thrash in his ruling granted the plaintiffs' motion to dismiss because the plan's summary plan description distributed to participants says they have 12 months to file a lawsuit after exhausting claims through the plan's internal review process. Because the lawsuit was based on conduct before Feb. 24, 2019, one year before the lawsuit was filed, without exhausting those claims via internal review processes, Mr. Thrash wrote that the claims are time-barred and "dismissed for failure to state a claim."
As of Dec. 31, the Cumulus Media 401(k) Plan had $219 million in assets, according to the company's most recent Form 5500 filing.
Michael I. Fistel Jr., founding partner at Johnson Fistel, the plaintiffs' attorney, and officials at Cumulus Media could not be immediately reached for comment.