After Clorox moved to dismiss the case, Judge Gonzalez Rogers initially granted a partial dismissal, requiring McManus to strengthen his claims. In response, McManus filed an amended complaint in November, arguing that ERISA mandates fiduciaries to act in plan participants’ best interests when deciding how to use forfeited funds. Because Clorox failed to engage an impartial decision-maker or prioritize participants, it breached its fiduciary duties of loyalty and prudence, he alleged.
Clorox’s Defense Falls Flat
Clorox countered in December that McManus’ theory was too broad, suggesting that if his argument held, nearly every retirement plan could be accused of wrongdoing. However, Judge Gonzalez Rogers dismissed that reasoning, emphasizing that just because multiple companies might be engaged in similar conduct does not invalidate McManus’ specific claims.
“Plaintiff sufficiently pleads context-specific claims that defendants had enough information to know its decision was imprudent to meet the plausibility threshold,” the judge wrote.
