The U.S. Chamber of Commerce has thrown its weight behind Citigroup’s endeavor to quash a lawsuit alleging mismanagement of its 401(k) plan, arguing that such lawsuits rely on selective data and lack merit in court.
US Chamber Backs Dismissal Of Citigroup 401(k) Suit : Chamber’s Assertion
In an amicus brief filed on Friday, the Chamber backed Citigroup Inc.’s push to dismiss Juliette Motz’s Employee Retirement Income Security Act (ERISA) suit. It contended that the suit presents “conclusory and speculative” claims, which have become all too common over the past decade.
Citigroup asserted, “With dozens of target-date fund suites on the market, it cannot be that a court can infer that fiduciaries were acting imprudently simply because — as plaintiff alleges here — a few other suites occasionally had slightly higher returns.”
US Chamber Backs Dismissal Of Citigroup 401(k) Suit : Motz’s Allegation
Motz, in her 2022 lawsuit, accused Citigroup of opting for “investments instead of offering prudent alternative investments that were readily available,” resulting in a breach of fiduciary duties.
Citigroup’s Defense
Citigroup argued in its motion to dismiss on March 1 that Motz’s suit lacks substance. It stated, “The suit proposes to evaluate whether the BlackRock TDFs ‘underperformed’ by comparing their returns to four other target-date funds that courts have repeatedly held are not appropriate benchmarks.”
Chamber’s Agreement
The Chamber concurred with Citigroup’s stance, emphasizing that cherry-picking data does not substantiate ERISA claims. It highlighted Motz’s case as one among many lawsuits inundating plan fiduciaries.
Call for Context-Specific Approach
The Chamber underscored the necessity for courts to adopt a context-specific approach when addressing such suits. It urged courts to delve beyond fees, consider industry data, and acknowledge that “a bare allegation that one fiduciary made a decision different from another fiduciary is insufficient to survive a motion to dismiss.”
No Comments from Citigroup
Citigroup declined to comment on the matter when approached on Monday.
US Chamber Backs Dismissal Of Citigroup 401(k) Suit : Responses Awaited
Both the Chamber and representatives of Motz did not immediately respond to requests for comment.
Legal Representation
The Chamber is represented in-house by Tara S. Morrissey and Jordan L. Von Bokern, along with Jaime A. Santos and Rohiniyurie Tashima of Goodwin Procter LLP.
