“Without a showing of material underperformance, all plaintiffs show is that certain investments, in hindsight, performed better than the challenged funds, which does not speak to fiduciary process,” the judge stated in her order.
Steel Dynamics’ Defense and Judicial Findings
Steel Dynamics defended its investment choices by pointing to data that showed the challenged funds sometimes had rates of return within 5% of those the plaintiffs claimed were better options. The judge agreed with this defense, ruling that the plaintiffs had not demonstrated that the inclusion of these funds in the retirement plan was unsound.
“Without more, plaintiffs have not adequately pleaded persistent and material underperformance necessary for a breach of fiduciary duty claim,” Judge Brisco wrote.
Because the failure-to-monitor claim was derivative of the breach of fiduciary duty claim, the judge also dismissed those allegations.
Steel Co Escapes 401(k) Lawsuit Dodge : Opportunity to Amend Complaint
Despite the dismissal, the judge allowed the plaintiffs an opportunity to file an amended complaint by September 20. This leaves the door open for the workers to potentially refine their claims and bring the case back to court.
Steel Co Escapes 401(k) Lawsuit Dodge : Other Legal Arguments Addressed
Steel Dynamics also argued that the workers lacked standing to lead the lawsuit, but Judge Brisco rejected this claim. The judge noted that at least one plaintiff had invested in the challenged funds, thus giving them standing to sue.
