“Unlike plaintiffs’ earlier complaint, the operative complaint’s underperformance allegations are part and parcel of direct allegations that defendants ignored their own selected criteria for evaluating and monitoring the prudence of plan investments,” noted Judge Varholak.
Critical Meeting Minutes
The ex-employees assert that minutes from a retirement plan committee meeting indicate that Dish committee members neglected to consider replacing the Freedom Funds with a more high-performing option after deficiencies were highlighted in a 2018 investment review. Judge Varholak stated, “The meeting minutes, combined with the allegations that the Freedom Funds were contemporaneously exhibiting performance calling for careful scrutiny under the plan’s [investment policy statement], plausibly support plaintiff’s conclusion that a meaningful review and balancing of the factors relevant to making a prudent retention decision did not occur.”
Dish Network argued that it fulfilled its obligations by retaining an investment adviser to assist in evaluating selected investments. However, Judge Varholak emphasized that the adviser’s role was limited, and the ultimate responsibility for selecting and monitoring the 401(k)’s funds rested with the plan committee.
Loyalty Claim Dismissed
In a contrasting decision, Judge Varholak granted Dish Network’s request to dismiss the plaintiffs’ claim that the company breached its duty of loyalty. He explained, “The court finds that dismissal is appropriate for the same reasons articulated in the order dismissing plaintiffs’ original complaint.” The judge maintained that the amended complaint failed to provide evidence of Dish Network’s actions benefiting anyone other than the company itself.
Dish Network ERISA Suit : The Battle Continues
The former plan participants filed their suit in January 2022, alleging that Dish Network overcharged them for record-keeping costs. Their actions purportedly cost the plan more than $2 million due to poorly performing investments. The plaintiffs aim to represent a class consisting of all retirement plan participants and beneficiaries who invested between January 2016 and the date of judgment.
