Today, June 3, 2013, Fidelity filed a motion to dismiss the complaint in Bilewicz v. FMR, LLC. As previous readers will know, a former participant in the Fidelity in-house 401(k) profit sharing plan filed a lawsuit on March 19, 2013 alleging various violations of ERISA because Fidelity only uses its own proprietary products in the plan. A previous post about the lawsuit (and others) can be found here: Fidelity is Targeted Again and This Time Regarding Its Own In House Plan (April 16, 2013).
The Motion to Dismiss filed by Fidelity, IMO, is one of the better briefs I’ve read recently and draws heavily on previous employer successes such as Hecker v. Deere & Co., Loomis v. Exelon Corp., Renfro v. Unisys Corp, and to a large extent, Tibble v. Edison Int’l. A copy of the motion to dismiss can be found here: Bilewicz v. FMR LLC – 13-10636 – (Doc. 24) Motion to Dismiss.
Fidelity makes the following non-exhaustive list of legal and factual arguments:
- Plaintiff lacks constitutional standing to bring her claims because she was only invested in a small sub-set of a much larger group of Fidelity funds in the plan.
- The claims are barred under ERISA’s 3-year and 6-year statute of limitations. Only a very limited number of the funds in the plan were added during those time periods.
- Fidelity offered free advice to all participants to help them pick from the plan’s lineup.
- Between 2007 and 2011, Fidelity contributed $2.1 billion in employer contributions, which purportedly amounts to 10 times the alleged amount of excessive fees paid back to Fidelity from the plan’s investments.
- Prohibited Transaction Exemption 77-3 expressly allows a company like Fidelity to use its own mutual funds.
- FMR, LLC is not a fiduciary.
- The plaintiff has no right to a jury trial.
From here, a couple of things may happen. The plaintiff may amend their complaint which would then start the process over again, with Fidelity (almost definitely) filing another motion to dismiss. Or the plaintiff may go ahead and stick with the complaint they have, file a response, then Fidelity files a reply, then oral argument before the district court judge, and then a ruling.
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