Matney v. Barrick Gold of N. Am. Inc.

COLE MATNEY and PAUL WATTS, individually and on behalf of all others similarly situated, Plaintiffs, v. BARRICK GOLD OF NORTH AMERICA, INC.; BOARD OF DIRECTORS OF BARRICK GOLD OF NORTH AMERICA, INC.; BARRICK U.S. SUBSIDIARIES BENEFITS COMMITTEE; and JOHN DOES 1-30, Defendants.

No. 2:20-cv-275-TC-CMR

United States District Court, D. Utah, Central Division

April 21, 2022

ORDER AND MEMORANDUM DECISION

TENA CAMPBELL, U.S. District Court Judge.

Plaintiffs Cole Matney and Paul Watts are participants in the retirement plan (the Plan) that Defendant Barrick Gold of North America Inc. (Barrick) offers its employees. They bring this putative class action under sections 409 and 502 of ERISA^[1] (29 U.S.C. §§ 1109 and 1132) against the Plan's fiduciaries, which include Barrick Barrick's Board of Directors and its members (the Board) and Barrick U.S. Subsidiaries Benefits Committee and its members (the Committee) (collectively, the Defendants).

In the Amended Complaint, Mr. Matney and Mr. Watts allege that Defendants breached the duties that ERISA imposes on fiduciaries of employee retirement plans.^[2] Defendants move to dismiss the suit under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief can be granted. For the reasons set forth below, the court GRANTS the motion.

Plaintiffs' Claims

Plaintiffs bring two causes of action. First they assert breach of the dual fiduciary duties of loyalty and prudence against the Committee. In their second cause of action, Plaintiffs contend that Barrick and the Board failed to monitor and correct the Committee's violation of its fiduciary duties. (By definition, this claim is derivative of the fiduciary duty claim.)

In the breach of fiduciary duty claim, Plaintiffs focus primarily on the costs of their investment options and administrative recordkeeping fees. They initially complain about the amount of management fees charged by the investment funds the Committee chose for the Plan. According to Plaintiffs, the Committee breached its duties by

(1) failing to objectively and adequately review the Plan's investment portfolio with due care to ensure that each investment option was prudent, in terms of cost; and (2) maintaining certain funds in the Plan despite the availability of identical or similar investment options with lower costs and/or better performance histories.

(Am. Compl. ¶ 12, ECF No. 21.)

Plaintiffs also challenge recordkeeping expenses that Plan participants paid out of their retirement accounts to Fidelity Management Trust Company (Fidelity), the investment trustee providing recordkeeping services to the Plan. Plaintiffs say the Committee failed to create “a prudent payment arrangement” with Fidelity, which led to payment of fees higher than necessary given the Plan's sizable assets. (Id. ¶ 69.)

Defendants challenge Plaintiffs' fiduciary duty claim, arguing that inaccurate and misleading allegations and unsupported inferences fail to state a plausible claim for relief. Defendants further maintain that because Plaintiffs have not alleged a breach of the duties of prudence and loyalty, their derivative monitoring claim necessarily fails.

In response, Plaintiffs say the Amended Complaint contains sufficient circumstantial factual allegations from which the court may reasonably infer that Defendants' decisionmaking processes wasted the Plan's and participants' assets because of unnecessary costs. They also point out that much of the relevant information is solely in Defendants' possession^[3] and that analysis of a fiduciary's decisionmaking process is a fact intensive endeavor better suited for summary judgment.

As explained below, the court finds that Plaintiffs' allegations, supplemented by materials appropriately cited by Defendants, do not state a plausible claim for breach of the duty of prudence or the duty of loyalty. Consequently, Plaintiffs' monitoring claim fails as a matter of law because that claim's success relies on the viability of Plaintiffs' insufficiently pled fiduciary duty claim.

Standing

To begin, the court must address the threshold standing issue raised by Defendants, who assert that Plaintiffs lack standing to challenge decisions related to fifteen of the twenty funds Plaintiffs allege were imprudently retained in the Plan. To establish Article III standing, a plaintiff must show an injury in fact that is fairly traceable to the defendant's action and that likely would be redressed by a favorable decision. Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992).

According to Defendants, the fact that Plaintiffs personally invested in only five of the twenty funds discussed in the Amended Complaint means Plaintiffs “have not suffered any individualized harm as to [the remaining fifteen] funds.” (Mot. to Dismiss Pls.' Am. Compl. at 11 n.5, ECF No. 24.) But Plaintiffs do not challenge decisions specific to the options in which they invested. They focus on an allegedly flawed process that resulted in investment offerings Plaintiffs say were imprudent and unnecessarily cost them money.

That Plaintiffs did not invest in every option provided by the Plan is not relevant to the issue of standing. “[A] plaintiff's standing to sue a plan's fiduciaries, and that same plaintiff's ability to seek relief that goes beyond his own injuries, are separate issues.” Krueger v. Ameriprise Fin., Inc., 304 F.R.D. 559, 567 (D. Minn. 2014). Plaintiffs allege infirmities in the overall decisionmaking process, and that confers standing to challenge decisions that happened to affect not only their accounts but other accounts in the Plan the fiduciaries managed.

Many courts have held that ERISA plaintiffs in putative class actions who allege breach of a fiduciary duty through a claim of mismanagement of an ERISA plan's overall investments, have standing even though the named plaintiffs did not invest in some of the plan's funds. See Kurtz v. Vail Corp., 511 F.Supp.3d 1185, 1192-94 (D. Colo. 2021) (putative class action collecting cases arising out of the First, Second, Third, Fourth, Eighth, and Ninth Circuits); Larson v. Allina Health Sys., 350 F.Supp.3d 780, 791-93 (D. Minn. 2018) (holding that ERISA plaintiffs had standing in putative class action to bring breach of fiduciary duty claims challenging, among other things, plan's investment fees and recordkeeping costs); Krueger, 304 F.R.D. at 567 (same). The court agrees with those decisions and will not bar or otherwise limit Plaintiffs' claims based on standing.

Rule 12(b)(6) Motion to Dismiss Standard

Federal Rule of Civil Procedure 12(b)(6) requires dismissal if the complaint fails to state a claim upon which relief can be granted. “[T]o withstand a motion to dismiss, a complaint must have enough allegations of fact, taken as true, ‘to state a claim to relief that is plausible on its face.'” Kansas Penn Gaming, LLC v Collins, 656 F.3d 1210, 1214 (10th Cir. 2011) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)).

The court must accept all well-pled factual allegations as true and construe them in the light most favorable to the nonmoving party. Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009); Strauss v. Angie's List, Inc., 951 F.3d 1263, 1267 (10th Cir. 2020). But that rule does not apply to legal conclusions. Id. at 678-79. “Mere ‘labels and conclusions,' and ‘a formulaic recitation of the elements of a cause of action' will not suffice; a plaintiff must offer specific factual allegations to support each claim.” Kansas Penn, 656 F.3d at 1214 (quoting Twombly, 550 U.S. at 555).

Moreover, “a plaintiff must offer sufficient factual allegations to ‘raise a right to relief above the speculative level.'” Id. at 1214 (citing Twombly, 550 U.S. at 555).

A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. The plausibility standard is not akin to a “probability requirement, ” but it asks for more than a sheer possibility that a defendant has acted unlawfully. Where a complaint pleads facts that are merely consistent with a defendant's liability, it stops short of the line between possibility and plausibility of entitlement to relief. Iqbal, 556 U.S. at 678 (internal citations and quotation marks omitted). The Tenth Circuit, applying this standard, has stated that “plausibility” refers to “the scope of the allegations in a complaint: if they are so general that they encompass a wide swath of conduct, much of it innocent, then the plaintiffs ‘have not nudged their claims across the line from conceivable to plausible.'” Robbins v. Okla. ex rel. Dep't of Human Servs., 519 F.3d 1242, 1247 (10th Cir.2008) (quoting Twombly, 550 U.S. at 570). “Determining whether a complaint states a plausible claim for relief [is] ... a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Iqbal, 556 U.S. at 679.

In support of their motion, Defendants point to documents Plaintiffs cite in the Amended Complaint or that the court may judicially notice. In large part, a court may not consider information outside the four corners of the complaint to assess whether the claims survive a Rule 12(b)(6) motion to dismiss. Four exceptions exist: (1) documents attached to the complaint as exhibits, (2) documents the complaint incorporates by reference, (3) documents and information subject to judicial notice, and (4) documents referred to in the complaint if they are central to the plaintiff's claim and the parties do not dispute the documents' authenticity. Gee v. Pacheco, 627 F.3d 1178, 1186 (10th Cir. 2010); Prager v. LaFaver, 180 F.3d 1185, 1188-89 (10th Cir. 1999). Defendants contend their exhibits fall...