Attorneys for participants in several defined contribution plans filed a notice of appeal with the 1st U.S. Circuit Court of Appeals, Boston, to overturn a
federal district court's dismissal of their suit against Fidelity Investments.
The notice was filed last Thursday. It didn't contain details of arguments to reverse the March 11 ruling by U.S. District Judge Denise Casper, Boston, in the case of In Re Fidelity ERISA Float Litigation. The plaintiffs alleged that Fidelity breached its fiduciary duty in the management of float income as record keeper for several plans. Float income is money earned from interest-bearing accounts used temporarily by 401(k) plans before plan assets are disbursed when participants move money among investment options.
Ms. Casper dismissed the complaint, writing that the participants “have not plausibly alleged that float income is a plan asset.” She added that, “Fidelity is not an ERISA fiduciary as to float.”
(More: DOL to review documents in 401(k) excessive fee suit)
“The judge got it wrong,” Gregory Porter, the lead attorney for the participants, said in an interview, adding that a detailed appeal will be filed in the near future. Mr. Porter is a Washington-based partner at law firm Bailey & Glasser.
The case represents the consolidation of four separate lawsuits filed in 2013 against Fidelity involving participants of 401(k) plans, including those of Delta Airlines Inc., Bank of America and Hewlett-Packard Co.
Robert Steyer is a reporter at sister publication Pensions & Investments.
