The case filed by a participant in the Fidelity in-house 401(k) plan, Bilewicz v. FMR LLC, heated up today with the filing of a proposed First Amended Complaint. We previously discussed this case in the posts Fidelity Files a Motion to Dismiss the Lawsuit Regarding Its Own In-House Plan (June 3, 2013), Are target date funds really the next focus of ERISA litigation? (May 8, 2013), and Fidelity is Targeted Again and This Time Regarding Its Own In House Plan (April 16, 2013).
The plaintiffs propose to amend the complaint in two substantive ways: adding more named plaintiffs and adding fact and class allegations regarding terms that purportedly mandate that any plan investment in mutual funds must be in mutual funds managed by Fidelity Management and Research Company.
The former is far more interesting to me, with twenty-six additional named plaintiffs being added to the litigation. To note, in all the previous litigation I was involved with, we never had double digit plaintiffs in a case. To have 27 in total is somewhat astonishing. It appears the reason to have so many in the lawsuit is to respond to Fidelity’s argument in their filed Motion to Dismiss that you need a plaintiff in each fund that is alleged to be improper. The plaintiffs have gone to great lengths to add details on the all the different investment funds used by the proposed additional named plaintiffs.
ERISA litigation is not a numbers game. The more plaintiffs you have does not guarantee any sort of outcome. Instead, proving a breach of ERISA’s fiduciary duties requires a carefully crafted and masterful presentation of the facts and law. Nonetheless, to find 27 current or former employees of any defendant corporation that are willing to sign onto a federal lawsuit, with all it’s inherent risks, suggests that plaintiffs’ claims may have some plausibility to them. If you can convince that many people of the potential of the case, you certainly have a fighting chance to convince a federal judge.
I’m quite looking forward to the first substantive decision.