CourtListener opinion 10230230

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UNITED STATES DISTRICT COURT 
 DISTRICT OF MINNESOTA 

Jason C. Fritton, Marea Gibson, Brian W. File No. 22-cv-00415 (ECT/TNL) 
Motzenbeeker, Dawn Duff, and Christopher 
Shearman, individually and on behalf of all 
others similarly situated, 

 Plaintiffs, 

v. OPINION AND ORDER 

Taylor Corporation, the Board of Directors 
of Taylor Corporation, the Fiduciary 
Investment Committee, and John Does 1-30, 

 Defendants. 
________________________________________________________________________ 
Eric Lechtzin, Edelson Lechtzin LLP, Huntingdon Valley, PA; Marc H. Edelson, Edelson 
Lechtzin LLP, Newton, PA; Daniel E. Gustafson, Daniel C. Hedlund, David A. Goodwin, 
and Anthony Stauber, Gustafson Gluek PLLC, Minneapolis, MN; Mark K. Gyandoh, 
Capozzi Adler, PC, Merion Station, PA; and Donald R. Reavey, Capozzi Adler, PC, 
Harrisburg, PA, for Plaintiffs. 

Emily S. Costin, Alston & Bird LLP, Washington, DC; Richard Blakeman Crohan and 
Margaret Ellen Studdard, Alston & Bird LLP, Atlanta, GA; and Steven C. Kerbaugh, Saul 
Ewing Arnstein & Lehr, LLP, Minneapolis, MN, for Defendants. 

Plaintiffs claim that their former employer, Taylor Corporation, its Board of 
Directors, Fiduciary Investment Committee, and every individual who served as a director 
or Fiduciary Investment Committee member during the relevant period,1 all violated 
ERISA by mismanaging the corporation's defined-contribution 401(k) and profit-sharing 
   
1 Plaintiffs allege that the relevant "Class Period" starts February 14, 2016, and runs 
through the entry of any final judgment in this case. Compl. [ECF No. 1] ¶ 1 n.2. 
plan (the "Plan"). Plaintiffs allege that Defendants breached their fiduciary duties by 
authorizing the Plan to pay unreasonably high recordkeeping fees, allowing the Plan's 
investment portfolio to include options with unreasonably high management fees and 

needlessly expensive share classes, and allowing the Plan to retain an underperforming 
fund. 
Defendants seek dismissal of the Complaint on two grounds. The first ground is 
jurisdictional: Defendants argue that Plaintiffs have not alleged facts plausibly showing 
that any of them suffered an Article III injury resulting from the alleged ERISA violations 

and, as a result, lack standing to bring the case. The second ground challenges the case's 
merits: Defendants argue that Plaintiffs have not alleged facts plausibly supporting 
essential elements of their ERISA claims and that, as a result, the Complaint should be 
dismissed for failing to state a claim. 
Plaintiffs plausibly allege Article III injury, but only in connection with their 

excessive-recordkeeping-expenses claim. This claim fails on its merits, however, because 
Plaintiffs do not allege facts plausibly showing that the amount of the Plan's recordkeeping 
fees are unreasonably high. This claim's failure leaves Plaintiffs without constitutional 
standing to pursue their remaining ERISA theories. Plaintiffs' Complaint will therefore be 
dismissed without prejudice, and Plaintiffs will be given an opportunity to replead. 

 I 
Begin with the statutory context. Plaintiffs bring this case under the Employee 
Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq. The core 
allegation is that Defendants as plan fiduciaries breached their duty of prudence imposed 
by 29 U.S.C. § 1104(a). See Compl. [ECF No. 1] ¶¶ 115–127. The duty of prudence 
requires a plan fiduciary to discharge their duties "with the care, skill, prudence, and 
diligence under the circumstances then prevailing that a prudent man acting in a like 

capacity and familiar with such matters would use. . . ." 29 U.S.C. § 1104(a)(1)(B). This 
duty concerns how a fiduciary "must act." Matousek v. MidAmerican Energy Co., 51 F.4th 
274, 278 (8th Cir. 2022). "The process is what ultimately matters, not the results." Id.; see 
also Braden v. Wal-Mart Stores, Inc., 588 F.3d 585, 595 (8th Cir. 2009) ("In evaluating 
whether a fiduciary has acted prudently, we therefore focus on the process by which it 

makes its decisions rather than the results of those decisions."). "A plaintiff typically clears 
the pleading bar by alleging enough facts to ‘infer . . . that the process was flawed.'" 
Matousek, 51 F.4th at 278 (quoting Davis v. Washington Univ. in St. Louis, 960 F.3d 478, 
482–83 (8th Cir. 2020)). "‘[C]ircumstantial allegations about [the fiduciary's] methods' 
based on the ‘investment choices a plan fiduciary made' can be enough." Davis, 960 F.3d 

at 483 (quoting Meiners v. Wells Fargo & Co., 898 F.3d 820, 822 (8th Cir. 2018)). "The 
key to nudging an inference of imprudence from possible to plausible is providing ‘a sound 
basis for comparison—a meaningful benchmark'—not just alleging that ‘costs are too high, 
or returns are too low.'" Matousek, 51 F.4th at 278 (quoting Davis, 960 F.3d at 484). 
 II2 
The Plan. The Plan is a defined contribution 401(k) and profit-sharing plan. In a 
defined contribution plan, "participants' retirement benefits are limited to the value of their 

own individual investment accounts, which is determined by the market performance of 
employee and employer contributions, less expenses." Tibble v. Edison Int'l, 575 U.S. 
523, 525 (2015). Here, Plan participants may contribute to their individual accounts, and 
Taylor Corporation contributes via matching contributions and perhaps profit sharing. 
Compl. ¶¶ 45–46, 52. During the relevant period, the Plan had at least $575 million in 

assets under management. Id. ¶ 8. As of December 31, 2016, the Plan had net assets of 
more than $633 million and 13,429 participants, and as of December 31, 2020, the Plan 
had net assets of more than $877 million and 12,157 participants. Id. This size qualifies 
the Plan as a "large plan" in the defined-contribution-plan marketplace, meaning "the Plan 
had substantial bargaining power regarding the fees and expenses that were charged against 

participants' investments." Id. ¶ 9. 
The Parties. The five named Plaintiffs are former employees of Defendant Taylor 
Corporation, a privately owned printing company; each Plaintiff "participated in the Plan 
paying the recordkeeping and administrative costs associated with the Plan and investing 
in the options offered by the Plan, which are the subject of this lawsuit." Id. ¶¶ 16–20, 

2 In describing the relevant facts, all factual allegations in the Complaint are accepted 
as true, and all reasonable inferences are drawn in Plaintiffs' favor. Meardon v. Register, 
994 F.3d 927, 934 (8th Cir. 2021). 
23.3 Defendants are the Plan's fiduciaries during the "Class Period," which Plaintiffs 
define as February 14, 2016, through the date of judgment. Id. ¶ 1 n.2. They include Taylor 
Corporation, Taylor Corporation's Board of Directors, the Board's individual members 

(whom the Complaint identifies as "John Does 1–10"), the Board's Fiduciary Investment 
Committee, and the Committee's individual members (whom the Complaint identifies as 
"John Does 11–20"). Id. ¶¶ 1, 23–25, 28–29, 31, 34–35. The last group of John Doe 
Defendants, 21–30, are any "additional committees, officers, employees and/or contractors 
of Taylor who are/were fiduciaries of the Plan during the Class Period." Compl. ¶ 37. It 

makes no practical difference, but to be precise, no one either knows or is saying they know 
who these possible Defendants might be. 
Involved and relevant non-parties. Bank of America, N.A. is the Plan's trustee and 
custodian for the majority of the Plan's investments. Id. ¶ 50. Merrill Lynch, Pierce, 
Fenner & Smith Incorporated has been the Plan's recordkeeper throughout the Class 

Period. Id. ¶ 51. Though neither Bank of America nor Merrill Lynch is a party to this case, 
their Plan-related activities are relevant to Plaintiffs' claims. 
Alleged fiduciary breaches generally. Plaintiffs organize their allegations into four 
categories of failures they believe were breaches of Defendants' fiduciary duty of 
prudence: (1) the failure to monitor recordkeeping expenses; (2) the failure to select and 

monitor Plan investment funds such that funds with excessive investment management fees 
   
3 It appears Plaintiffs are not only former Taylor employees, but also are former Plan 
participants. The Complaint is imprecise on the point, but this is what Defendants say in 
their opening brief, Defs.' Mem. in Supp. [ECF No. 24] at 30, and Plaintiffs do not dispute 
the point or suggest otherwise, see Pls.' Mem. in Opp'n [ECF No. 33] at 10 n.7. 
were offered; (3) the failure to select less expensive share classes of funds; and (4) the 
failure to remove one underperforming fund. See generally id. ¶¶ 9, 60–113. 
The excessive-recordkeeping-expenses theory. The Plan possessed discretion to 

charge each participant for Plan administration expenses, including recordkeeping. Id. 
¶ 54. Of particular significance to Plaintiffs' recordkeeping-expenses theory, the Plan's 
February 2021 participant-disclosure document reads, in part: 
 The Plan's service provider may receive investment-related 
 revenue from one or more of the Plan's investments for 
 providing the above-described administrative services. The 
 Plan Sponsor and service provider have agreed upon $42.00 
 per participant annually to cover the cost of administrative 
 services. 

Id. Based on this language, Plaintiffs allege that "the Plan's service provider, Merrill 
Lynch, may receive investment-related revenue from the investment options offered by the 
Plan, but [disclosures made by Defendants during the Class Period] fail[] to disclose the 
amount of such revenue sharing received by Merrill Lynch." Id. ¶ 55. Plaintiffs allege that 
the Plan pays its recordkeeping expenses indirectly by revenue sharing, rather than directly 
from Plan assets, and this practice resulted in the imposition of excessive, above-market 
recordkeeping administrative fees. Id. ¶¶ 62–63, 67. Plaintiffs allege that "[a]lthough 
utilizing a revenue sharing approach is not per se imprudent, unchecked, it is extremely 
costly for Plan participants," and "the best practice is a flat price based on the number of 
participants." Id. ¶¶ 63–66. Regarding the amount of the recordkeeping fees, Plaintiffs 
allege that Plan participants each paid between about $72 and $96 from 2016 to 2020, 
amounts Plaintiffs allege are excessive and unreasonable. Id. ¶¶ 68–69, 76. Plaintiffs 
allege that these higher amounts are the true administrative fees paid to Merrill Lynch, not 
the disclosed $42 per participant quoted above. Id. ¶ 70. Plaintiffs allege that "it was 
possible for the Plan to negotiate recordkeeping fees for not more than between $20 and 

$35 per participant" and that several "comparable plans of similar sizes" were charged such 
fees by their recordkeepers in 2018 or more recently. Id. ¶¶ 71–72. As further support for 
this assertion, the Complaint includes references to a consulting-group report that 
determined, for individual account plans with $1 billion in assets, administrative fees had 
dropped to $37 per participant in 2016, and in 2019, plans with over 15,000 participants 

paid on average $40 per participant for recordkeeping, trust, and custody fees. Id. ¶¶ 73–
75. Plaintiffs recite further evidence to support the availability of lower fees: a university 
that reduced its ERISA plan fees to $21–$44 per participant; a recordkeeper that stipulated 
in a lawsuit that a plan with tens of thousands of participants and over a billion dollars in 
assets could command fees of $14–$21; and cases involving fees of, or involving expert 

opinions suggesting fees should be, $37–$42, $18, $20–$27, and $35. Id. ¶¶ 76–77 & n.11. 
Plaintiffs allege that fiduciaries must identify and monitor all fees, including direct 
compensation and payments through revenue sharing being paid to the recordkeeper, to 
evaluate whether the fees are reasonable, and that fiduciaries must remain informed about 
market trends and available rates in the market, usually by periodically conducting a 

request for proposals (or "RFP"). Id. ¶¶ 78–79. Plaintiffs allege that nothing indicates 
Defendants conducted an RFP to determine whether the Plan could obtain better 
recordkeeping-fee pricing, and that given the size of the Plan's assets during the Class 
Period and the trend toward lower recordkeeping fees in the marketplace, the Plan would 
have obtained comparable or superior services at a lower cost. Id. ¶ 80. Based on all these 
allegations, Plaintiffs claim Defendants failed to exercise appropriate judgment with 
respect to recordkeeping fees, permitted the Plan's service providers to charge excessive 

fees, and breached their fiduciary duties by failing to adequately monitor and control 
recordkeeping costs. Id. ¶¶ 9–10. 
The excessive-management-fees theory. Plaintiffs allege that Defendants failed to 
prudently select and monitor the Plan's investment options because they selected and 
continued to offer funds that imposed unreasonably expensive management fees. Id. 

¶¶ 82–85. These management fees are for investment management and other services, and 
plan participants generally pay these costs based on the fund's expense ratio, which is a 
percentage of assets. Id. ¶ 90. A higher expense ratio reduces a participant's return, and 
consequently the compounding effect of that return, so prudent plan fiduciaries must 
consider the effect of expense ratios on investment returns. Id. To evaluate expense ratios, 

Plaintiffs allege, fiduciaries should obtain competitive pricing information for funds held 
in plans of similar size and evaluate plan assets against those benchmarks. Id. ¶¶ 92–94. 
Plaintiffs allege that Defendants could not have engaged in a prudent process for evaluating 
investment management fees because Defendants picked certain investment options with 
unreasonably high expense ratios. These allegations fall into two categories. First, the 

Plan's default funds for participants who do not make their own investment allocations are 
T. Rowe Price age-based funds, and "[t]he Plan would have qualified for the collective 
trust versions of these funds (which were available since 2012) at all times during the Class 
Period, but [Defendants] failed to move these investments to the [collective investment 
trust, or "CIT"] versions of the T. Rowe Price funds," despite the fact that the CIT versions 
had lower expense ratios. Id. ¶¶ 86, 95, 98. Second, Plaintiffs allege that various in-Plan 
funds, including the T. Rowe Price age-based funds, had expense ratios that were 

significantly above the "ICI median" for their fund categories. See id. ¶¶ 96–98. 
The expensive-share-class theory. Plaintiffs allege that Defendants selected for 
inclusion in the Plan more expensive, individual share classes when they could have—and 
should have—selected lower cost, institutional share classes. Plaintiffs allege there is no 
difference between the classes other than costs, and a prudent fiduciary would switch to 

the less expensive share classes. Id. ¶¶ 100, 102–04. The Plan would have qualified for 
these lower cost share classes because of its large size; and even if the Plan did not meet 
the investment minimum to qualify, as appears to be the case for a few in-Plan funds, "it is 
well-known among institutional investors that mutual fund companies will typically waive 
those investment minimums for a large plan willing to add the fund to its menu of 

designated investment options." Id. ¶¶ 101, 107. 
The single-underperforming-fund theory. Plaintiffs allege that Defendants acted 
imprudently by failing to remove from the Plan one fund that consistently underperformed, 
the Victory Integrity Small Cap Value Fund Class Y. Id. ¶ 110. Plaintiffs allege that the 
Victory Fund "underperformed both its benchmark Morningstar US Small Brd Val Ext TR 

USD index and lower-cost funds in the same fund category that measured their 
performance against the same benchmark index," including "the less expensive R6 Class 
version of the Victory Integrity Small Cap Value Fund." Id. ¶¶ 110–12. 
The ERISA claims. Based on these various theories, Plaintiffs assert one count for 
breach of the fiduciary duty of prudence against the Committee and its members. Id. 
¶¶ 114–20. And Plaintiffs allege a second count for breach of fiduciary duties against 

Taylor, the Board, and the Board's members for failure to adequately monitor other 
fiduciaries. Id. ¶¶ 121–27. Plaintiffs seek a declaration that all Defendants breached their 
fiduciary duties under ERISA; an order compelling Defendants to make good to the Plan 
all losses resulting from the breaches, to restore any profits made through use of Plan assets, 
and to restore any profits that Plan participants would have made if Defendants had fulfilled 

their duties; an order requiring Taylor to disgorge profits received from the Plan; actual 
damages; costs and attorneys' fees; and other unspecified relief. Id. at 44–45, ¶¶ A–L. 
 III 
Defendants challenge Plaintiffs' standing under Article III, and thus subject-matter 
jurisdiction. Because Defendants challenge only the Complaint's sufficiency, this is a 

"facial" subject-matter jurisdiction challenge. Branson Label, Inc. v. City of Branson, 793 
F.3d 910, 914 (8th Cir. 2015). In analyzing a facial attack, a court "restricts itself to the 
face of the pleadings, and the non-moving party receives the same protections as it would 
defending against a motion brought under Rule 12(b)(6)." Osborn v. United States, 918 
F.2d 724, 729 n.6 (8th Cir. 1990) (citations omitted). 

To plead Article III standing, a plaintiff must allege facts showing he has 
"(1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the 
defendant, and (3) that is likely to be redressed by a favorable judicial decision." Spokeo, 
Inc. v. Robins, 578 U.S. 330, 338 (2016). "To establish injury in fact, a plaintiff must show 
that he or she suffered an invasion of a legally protected interest that is concrete and 
particularized and actual or imminent, not conjectural or hypothetical." Id. at 339 (internal 
quotation marks omitted) (quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 

(1992)). Complaints that allege "economic or physical harms" are almost always 
no-doubters. Hein v. Freedom from Religion Found., Inc., 551 U.S. 587, 642 
(2007) (Souter, J., dissenting). This is true even if the alleged harm is "only a few 
pennies." Wallace v. ConAgra Foods, Inc., 747 F.3d 1025, 1029 (8th Cir. 2014). The 
plaintiff bears the burden of establishing standing and must clearly allege facts 

demonstrating each element. Spokeo, 578 U.S. at 338. 
Here, the Complaint‘s injury allegations are quite general. Plaintiffs allege they 
"participated in the Plan paying the recordkeeping and administrative costs associated with 
the Plan and investing in the options offered by the Plan, which are the subject of this 
lawsuit." Compl. ¶¶ 16–20. Plaintiffs also allege that "each of them participated in the 

Plan and were injured by Defendants' unlawful conduct." Id. ¶ 21. That's it. Seemingly 
important facts are not alleged. For example, the Complaint omits allegations describing 
when any Plaintiff began participating in the Plan, whether any Plaintiff continues to invest 
in the Plan today, whether or when any Plaintiff ceased to invest in the Plan, the specific 
funds in which any Plaintiff ever invested, and the period during which any Plaintiff 

invested in any fund or funds. 
Though undetailed, the Complaint's injury allegations plausibly show that each 
named Plaintiff has Article III standing in one respect: each Plaintiff alleges to have 
suffered personal economic injury by paying unreasonably high recordkeeping fees. This 
answer seems clear when one compares this claim's basic theory with the Complaint's 
injury allegations. The theory underlying the recordkeeping-fee claim is straightforward. 
Plaintiffs allege that recordkeeping expenses were unreasonably high throughout the 

relevant period. Id. ¶¶ 67–76, 80. And Plaintiffs allege that every Plan participant incurred 
recordkeeping fees. Id. ¶ 54. In other words, it doesn't matter that we do not know when 
each Plaintiff participated in the Plan, or in what funds each Plaintiff invested, because 
Plaintiffs' excessive-recordkeeping theory is not tied to a particular time period, fund, or 
funds. The possibility that some Plaintiffs participated in the Plan for a very short time or 

to a very limited degree might mean that those Plaintiffs have suffered minimal injuries, 
but as noted above, injury of "only a few pennies" is enough to meet Article III's injury 
requirement. Wallace, 747 F.3d at 1029. 
But for their recordkeeping-fee allegations, however, Plaintiffs would have failed 
to allege Article III injury. This is because Plaintiffs allege no other ERISA theory that 

necessarily affects every Plan participant (like the recordkeeping theory does), but 
Plaintiffs have not alleged facts plausibly showing that any of them were injured through 
any other theory. Plaintiffs' excessive-management-fees theory concerns only particular 
funds, but Plaintiffs do not allege that they, or any of them, ever invested in any one of 
these particular funds. Without at least a basic allegation that one or more Plaintiffs 

invested in one or more funds that are the subject of this claim, Plaintiffs cannot show that 
any of them suffered injury resulting from the alleged fiduciary breaches this theory 
challenges. The same is true of Plaintiffs' expensive-share-class and single-
underperforming-fund theories. Neither theory implicates every in-Plan fund, but 
Plaintiffs do not allege that they, or any of them, ever invested in any fund that is the subject 
of either theory. 
 IV 

In reviewing a motion to dismiss for failure to state a claim under Rule 12(b)(6), a 
court must accept as true all of the factual allegations in the complaint and draw all 
reasonable inferences in the plaintiff's favor. Gorog v. Best Buy Co., 760 F.3d 787, 792 
(8th Cir. 2014) (citation omitted). Although the factual allegations need not be detailed, 
they must be sufficient to "raise a right to relief above the speculative level." Bell Atl. 

Corp. v. Twombly, 550 U.S. 544, 555 (2007) (citation omitted). The complaint must "state 
a claim to relief that is plausible on its face." Id. at 570. "A claim has facial plausibility 
when the plaintiff pleads factual content that allows the court to draw the reasonable 
inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 
U.S. 662, 678 (2009). 

Considering "matters outside the pleadings" generally transforms a Rule 12(b)(6) 
motion into one for summary judgment, but not when the relevant materials are 
"necessarily embraced" by the pleadings. Zean v. Fairview Health Servs., 858 F.3d 520, 
526 (8th Cir. 2017) (citation omitted). Materials embraced by the complaint include 
"documents whose contents are alleged in a complaint and whose authenticity no party 

questions, but which are not physically attached to the pleading." Kushner v. Beverly 
Enters., Inc., 317 F.3d 820, 831 (8th Cir. 2003) (quoting In re Syntex Corp. Sec. Litig., 
95 F.3d 922, 926 (9th Cir. 1996)). Here, the Complaint includes allegations referring to 
the content of, and sometimes quoting, various Plan-related documents and other 
documents like surveys or studies. Though these documents were not attached to the 
Complaint, some are included in Defendants' submissions (as exhibits to the Costin 
Declaration), and no Party questions their authenticity. It is therefore appropriate to 

consider these documents in adjudicating Defendants' motion. 
Begin with Plaintiffs' claim that the Plan's fiduciaries violated their duty of 
prudence by failing to adequately monitor recordkeeping expenses. See Compl. ¶¶ 60–81. 
Again, the core allegation is that these expenses were too high. See id. "In the absence of 
‘significant allegations of wrongdoing,' Tussey v. ABB, Inc., 746 F.3d 327, 336 (8th Cir. 

2014), the way to plausibly plead a claim of this type is to identify similar plans offering 
the same services for less." Matousek, 51 F.4th at 279 (citing Albert v. Oshkosh Corp., 47 
F.4th 570, 579–80 (7th Cir. 2022); Sweda v. Univ. of Pa., 923 F.3d 320, 330 (3d Cir. 
2019)).4 Answering this question is essentially a two-step process. First, it is necessary to 
determine what recordkeeping services the Plan offers and the costs accompanying them, 

either by reference to the Complaint's allegations or a document or documents the 
Complaint embraces. Matousek, 51 F.4th at 279. Second, it is necessary to determine 
whether the complaint includes factual allegations plausibly showing that the fees for these 

4 Plaintiffs do not claim to advance allegations of wrongdoing that are "significant" 
in the relevant sense. See Tussey, 746 F.3d at 336 ("The facts of this case . . . involve 
significant allegations of wrongdoing, including allegations that ABB used revenue sharing 
to benefit ABB and Fidelity at the Plan's expense."). Notably, Plaintiffs allege that they 
"do not have actual knowledge of the specifics of Defendants' decision-making process 
with respect to the Plan, including Defendants' processes (and execution of such) for 
selecting and monitoring the Plan's recordkeeper." Compl. ¶ 58. 
services are too high in relation to a meaningful benchmark—that is, a "like-for-like 
comparison." Id. 
What recordkeeping services does the Plan offer? The Complaint alleges only 

generally that "‘recordkeeping' is a catchall term for the suite of administrative services 
typically provided to a defined contribution plan by the plan's ‘recordkeeper,'" and that 
"[n]early all recordkeepers in the marketplace offer the same range of services." Compl. 
¶ 60. The Complaint identifies "managed account services, self-directed brokerage, 
Qualified Domestic Relations Order processing, and loan processing" as generic examples 

of these services. Id. Participant-disclosure forms filed by Defendants in support of their 
motion (and embraced by the pleadings, Matousek, 51 F.4th at 279) seem to show that the 
Plan's recordkeeper, Merrill Lynch, processed participants' investment directives, kept 
track of participant accounts and transactions, and provided "services such as call centers, 
websites, account statements and educational materials related to saving and investing for 

retirement." ECF No. 25-3 at 4. Other "Annual Return/Report of Employee Benefit Plan" 
forms (also labeled Form 5500s) filed by Defendants include codes signaling that Merrill 
Lynch provided recordkeeping and information management services, including 
"computing, tabulating, data processing," and investment management services. E.g., ECF 
No. 25-1 at 122 (identifying Service Codes); see also 2016 and 2021 Instructions for 

Schedule C (Form 5500). The bottom line seems to be that, as Plaintiffs allege in the 
Complaint, Merrill Lynch provided a typical set of recordkeeping services. 
What fees are charged for these services? The Complaint includes the following 
quotation from the February 2021 participant-disclosure form: 
 The Plan's service provider may receive investment-related 
 revenue from one or more of the Plan's investments for 
 providing the above-described administrative services. The 
 Plan Sponsor and service provider have agreed upon $42.00 
 per participant annually to cover the cost of administrative 
 services. These costs may or may not be charged to participant 
 accounts on a pro rata basis (i.e., based upon a participant's 
 account balance relative to total Plan assets) or a per capita 
 basis (i.e., a flat fee for each participant account), as the Plan 
 fiduciary chooses. Any charges to participant accounts may 
 vary from year to year and based upon your Plan's rules. 

 There may be other applicable Plan administrative fees and 
 expenses arising from time to time that may be charged to 
 participant accounts as determined by the Plan Sponsor. 

Compl. ¶ 54. Plaintiffs' emphasis on this quotation's first sentence is intended to make 
obvious that Merrill Lynch may have received payment for its recordkeeping services 
through revenue sharing—that is, payments from investments (funds) within the Plan to 
compensate for recordkeeping and trustee services that the fund otherwise would have to 
provide. Id. ¶ 62. And Plaintiffs allege that this occurred, resulting in recordkeeping fees 
higher than $42 per participant annually. Specifically, by dividing the total compensation 
paid to Merrill Lynch by the number of Plan participants, Plaintiffs allege that from 2016 
through 2020, the average per-participant recordkeeping fee ranged from $72.20 to $95.54, 
or an average of $83.37. Id. ¶¶ 68, 70.5 
   
5 Defendants dispute these figures and argue that Plaintiffs have not plausibly alleged 
that Merrill Lynch received anything more than $42 per participant annually. See Defs.' 
Mem. in Supp. [ECF No. 24] at 23–25; Defs.' Reply Mem. [ECF No. 39] at 10–11. This 
argument is not persuasive. Plaintiffs allege that Merrill Lynch received compensation for 
its recordkeeping services in amounts greater than $42 per participant; they identify precise 
dollar amounts for each year from 2016 through 2020. Compl. ¶ 68. It is true that Plaintiffs 
cite no source for these greater-than-$42-per-participant (labeled "indirect compensation") 
figures, but they don't have to. No rule requires a plaintiff generally to cite authority for a 
What like-for-like comparison or comparisons do Plaintiffs make, and do these 
comparisons plausibly show that the recordkeeping fees the Plan charged were too high? 
On this question, it seems fair to separate the Complaint's allegations into four categories. 

First, Plaintiffs include a table showing the per-participant recordkeeping fees for 
nine "comparable plans of similar sizes of assets under management in 2018," and 
comparing these fees to the Plan's 2018 per-participant fee of $79.10. Id. ¶ 72. These 
comparisons are not like-for-like. As Defendants point out, Plaintiffs calculated the per-
participant fee for each putative comparator plan by dividing only the direct compensation 

paid by the plan to its recordkeeper (evidently obtained from each plan's 2018 Form 5500) 
by the number of plan participants. Compare, e.g., Compl. ¶ 72 with ECF No. 25-3 at 29. 
Plaintiffs used a very different approach to calculating the per-participant fee charged by 
the Taylor Corporation Plan in 2018 and the other at-issue years. To calculate that number, 
Plaintiffs included in the numerator not just direct compensation, but also indirect 

compensation, yielding a much larger quotient. Compl. ¶¶ 68, 70. Applying the approach 
Plaintiffs used in calculating the per-participant recordkeeping fees for the comparator 
plans to the Taylor Corporation Plan would leave a quotient—or 2018 per-participant 

complaint's factual allegations in the complaint. Rule 8's "short and plain statement" 
requirement would seem at odds with such a requirement, and Rule 11 addresses and covers 
the need for factual contentions to have evidentiary support. It is true that a complaint's 
factual allegations are implausible if contradicted by materials the complaint embraces, but 
we don't have that situation here. Leaving aside whether the February 2021 participant-
disclosure form is ambiguous concerning the issue, the Plan's Form 5500s show that 
Merrill Lynch received indirect compensation, see, e.g., ECF No. 25-1 at 122, and 
Defendants have not explained how the Form 5500s contradict Plaintiffs' allegations as to 
the amount of this compensation. 
recordkeeping fee—of $12.65. The bottom line is that, because the math Plaintiffs used to 
calculate the Taylor Corporation Plan's annual per-participant recordkeeping fee differs so 
fundamentally from the math Plaintiffs used to calculate these other plans' 2018 per-

participant recordkeeping fees, these other plans' fees are not plausible comparators and 
say nothing helpful about whether the Taylor Corporation Plan's recordkeeping fees are 
too high. 
Second, Plaintiffs rely on two reports prepared by consulting group NEPC, LLC—
one from 2014, the other from 2019—showing respectively "that for individual account 

plans with $1 billion in assets, administrative fees had dropped to $37 per participant," and 
"that plans with over 15,000 participants paid on average $40 or less in per participant 
recordkeeping, trust and custody fees." Id. ¶¶ 73–75. The Eighth Circuit rejected reliance 
on a report from this same consulting group in Matousek. There, the court explained: 
 Rather than point to the fees paid by other specific, comparably 
 sized plans, the plaintiffs rely on industry-wide averages. But 
 the averages are not all-inclusive: they measure the cost of the 
 typical "suite of administrative services," not anything more. 
 And using this information creates a mismatch between Merrill 
 Lynch's total compensation, which includes everything it does 
 for MidAmerican's plan, and the industry-wide averages that 
 reflect only basic recordkeeping services. 

 The first source, published by a consulting group called NEPC, 
 says that no similarly sized retirement plan paid more than 
 $100 per participant for recordkeeping, trust, and custodial 
 services. MidAmerican's plan compares favorably, with the 
 fees for these basic recordkeeping services totaling between 
 $32 and $48 per plan participant. NEPC's report says nothing 
 about the fees for the other services that Merrill Lynch 
 provided, which means it cannot provide a "sound basis for 
 comparison" for anything else. Meiners [v. Wells Fargo & 
 Co.], 898 F.3d [820,] [] 822 [(8th Cir. 2018)]; see Smith v. 
 CommonSpirit Health, 37 F.4th 1160, 1169 (6th Cir. 2022) 
 (rejecting a comparison to industry averages because the 
 plaintiff "ha[d] not pleaded that the services that [the plan's] 
 fee covers are equivalent to those provided by the plans 
 comprising the average in the industry publication that she 
 cite[d]"). 

Matousek, 51 F.4th at 279–80. It would seem dubious here to rely on the same kind of 
industry-wide report the Eighth Circuit rejected in affirming the Rule 12(b)(6) dismissal of 
an ERISA recordkeeping claim roughly two months ago. Regardless, the same essential 
problem the court encountered in Matousek is present here. The Complaint includes no 
allegations describing how either the 2014 or 2019 NEPC report calculated per-participant 
recordkeeping fees. It is entirely possible, for example, that NEPC used the same approach 
Plaintiffs used in calculating the per-participant fees for the would-be comparator plans. If 
that is the situation, the Taylor Corporation Plan compares favorably. The point is that we 
don't know, and the absence of this information means the NEPC reports are not 
meaningful benchmarks. 
Third, Plaintiffs rely on "numerous authorities" showing "that reasonable rates for 
large plans typically average around $35 per participant, with costs coming down every 
day." Compl. ¶ 76. Plaintiffs support this more general assertion with allegations 
regarding steps taken by "the University of Chicago ERISA fiduciaries" to reduce per-
participant fees to $21–$44, and that recordkeeper Fidelity "recently stipulated in a lawsuit 
that a plan with tens of thousands of participants and over a billion dollars in assets could 
command recordkeeping fees as low as $14–$21 [per participant]." Id. ¶ 77. These 

allegations are not meaningful benchmarks for the same reason described in the preceding 
paragraph. We do not know how these numbers were calculated. That concern aside, the 
Complaint lacks allegations plausibly showing that a plan sponsored by the University of 
Chicago is a viable comparator to the Taylor Corporation Plan or that Fidelity's stipulated 

fee range—in view of whatever circumstances prompted the stipulation—make that range 
a meaningful benchmark. 
Fourth, Plaintiffs allege that an ERISA "plan's fiduciaries must remain informed 
about overall trends in the marketplace regarding the fees being paid by other plans," and 
that "[t]his will generally include conducting a Request for Proposal (‘RFP') process at 

reasonable intervals." Id. ¶ 79. Plaintiffs then allege that "there is nothing to suggest that 
Defendants conducted [an] RFP at reasonable intervals – or certainly at any time from 2016 
through the present – to determine whether the Plan could obtain better recordkeeping and 
administrative fee pricing from other service providers." Id. ¶ 80. These allegations do 
not plausibly show a fiduciary breach. Defendants argue that, as a legal matter, ERISA 

does not compel competitive bidding. Defs.' Mem. in Supp. at 28. Plaintiffs do not 
respond to this argument. See Pls.' Mem. in Opp'n at 25–28. This legal issue aside, the 
factual assertion that "there is nothing to suggest that" Defendants engaged in an RFP 
process seems to be another way of speculating this did not happen, and that is insufficient 
under Rule 12(b)(6). Compl. ¶ 80; Twombly, 550 U.S. at 555 ("Factual allegations must 

be enough to raise a right to relief above the speculative level."). 
 * 
The bottom line is that Plaintiffs have not alleged facts plausibly showing that 
Defendants (or any of them) breached their fiduciary duty of prudence by authorizing the 
imposition of unreasonably excessive recordkeeping fees. The next question is what effect 
this failure—that is, the dismissal of Plaintiffs' excessive-recordkeeping-expenses 
theory—has on Plaintiffs' remaining theories in light of the absence of allegations showing 

whether any Plaintiff suffered injury in connection with any of the remaining theories. 
 V 
There is a jurisdictional problem with respect to Plaintiffs' remaining theories. 
Again, this problem becomes evident when one compares the Complaint's injury-related 
allegations against Article III's redressability requirement. To recap, but for their 

recordkeeping-fee injury allegations, Plaintiffs would fail to allege any Article III injury. 
Plaintiffs allege no other ERISA theory that necessarily affects every Plan participant (like 
the recordkeeping theory does). And Plaintiffs have not alleged facts plausibly showing 
that any of them were injured through any other theory—i.e., Plaintiffs do not allege that 
any of them invested a particular fund that is the subject of any of the remaining excessive-

management-fees, expensive-share-class or single-underperforming-fund theories. 
Without these allegations, a hypothetical judgment in Plaintiffs' favor on any one of these 
theories would do nothing for any Plaintiff. For example, a judgment determining that 
Defendants acted imprudently in selecting and retaining funds that charged excessive 
management fees would benefit only those Plan participants who invested in those funds 

and paid those fees. But the Complaint includes no allegations showing that Plaintiffs fall 
in that category. 
The Supreme Court has addressed this situation in a comparable context. In Thole 
v. U.S. Bank N.A., the plaintiffs participated in a defined-benefit plan and asserted no 
ERISA claim based on monetary injuries they personally suffered. --- U.S. ---, 140 S. Ct. 
1615, 1618–19 (2020). Regarding Article III's redressability element, the court explained: 
 Thole and Smith have received all of their monthly benefit 
 payments so far, and the outcome of this suit would not affect 
 their future benefit payments. If Thole and Smith were to lose 
 this lawsuit, they would still receive the exact same monthly 
 benefits that they are already slated to receive, not a penny less. 
 If Thole and Smith were to win this lawsuit, they would still 
 receive the exact same monthly benefits that they are already 
 slated to receive, not a penny more. The plaintiffs therefore 
 have no concrete stake in this lawsuit. . . . Because the plaintiffs 
 themselves have no concrete stake in the lawsuit, they lack 
 Article III standing. 

Id. at 1619. The same is true of Plaintiffs' remaining claims or theories in this case. 
Without allegations that any Plaintiff invested in any fund that is a target of their remaining 
theories, Plaintiffs have not plausibly shown that a loss or win on any one of these theories 
would make any difference. 
It is true, as Plaintiffs point out, that the Eighth Circuit has held that an ERISA plan 
participant who alleges injury to her own account has Article III standing to pursue relief 
under ERISA's civil enforcement provision for injuries to the plan or other participants, 
including injuries that the participant-plaintiff did not suffer personally. Braden, 588 F.3d 
at 591–94. And this rule is well-established. See, e.g., Parmer v. Land O'Lakes, Inc., 518 
F. Supp. 3d 1293, 1301 (D. Minn. 2021) (understanding Braden to have "held that the 
plaintiff had standing to challenge an entire retirement plan even though plaintiff did not 
enroll in all of the challenged investment options[]"); Becker v. Wells Fargo & Co., No. 
20-cv-2016 (DWF/BRT), 2021 WL 1909632, at *3 (D. Minn. May 12, 2021) ("The Court 
finds that in addition to satisfying the requirements of her own Article III standing, Becker 
has plausibly alleged that Defendants' fiduciary violations caused broad-sweeping losses 
to other Plan investments in which she did not invest that stemmed from Defendants' 
imprudent or disloyal conduct. Accordingly, the Court finds that Becker has Article III 

standing to seek relief on behalf of the Plan as a whole.") (citations omitted); Rosenkranz 
v. Altru Health Sys., No. 3:20-cv-168, 2021 WL 5868960, at *5–7 (D.N.D. Dec. 10, 2021) 
(same); Anderson v. Coca-Cola Bottlers' Ass'n, No. 21-2054-JWL, 2022 WL 951218, at 
*3 (D. Kan. Mar. 30, 2022) ("The majority of courts . . . have concluded that the 
participant's standing does extend to other funds in the plan."). 

Though settled and binding, this rule does not seem apt or to change things here. 
Plaintiffs alleged Article III injury in connection with only one theory—the excessive-
recordkeeping-fee theory—and that claim has been dismissed. Braden does not address 
this circumstance. It says that "a plaintiff may be able to assert causes of action which are 
based on conduct that harmed him, but which sweep more broadly than the injury he 

personally suffered." Braden, 588 F.3d at 592. It does not say that a plaintiff whose Article 
III injury resulted only in connection with a dismissed claim nonetheless has constitutional 
standing to proceed with claims based on conduct that did not cause her Article III injury. 
Reaching the opposite conclusion would appear contrary to Thole. It would also create a 
seemingly absurd result: a hypothetical plaintiff who claimed injury resulting only from a 

dubious ERISA claim could, notwithstanding the Rule 12(b)(6) dismissal of that claim, 
press ahead with other more viable ERISA theories based on actions that did not personally 
injure the plaintiff. I conclude that the dismissal of Plaintiffs' recordkeeping-fee claim, 
together with the absence of allegations plausibly showing that Plaintiffs suffered Article 
III injury in connection with any other theory, leaves Plaintiffs without constitutional 
standing to pursue their remaining claims. 
 VI 

Plaintiffs will be permitted an opportunity to file an amended complaint. If 
Plaintiffs go that route, any amended complaint may address the merits-based 
shortcomings of the excessive-recordkeeping-fees claim, the absence of allegations 
showing Article III injury with respect to the remaining theories, and the merits-based 
shortcomings of the remaining theories identified in Defendants' motion. Though 

debatable, I conclude this approach is wiser as a practical matter. Fed. R. Civ. P. 1. 
Regarding the Rule 12(b)(6) dismissal of the recordkeeping claim, a dismissal with 
prejudice is typically appropriate when a plaintiff has shown "persistent pleading failures" 
despite one or more opportunities to amend, Milliman v. Cnty. of Stearns, No. 13-cv-136 
(DWF/LIB), 2013 WL 5426049, at *16 (D. Minn. Sept. 26, 2013); see Reinholdson v. 

Minnesota, No. 01-cv-1650 (RHK/JMM), 2002 WL 32658480, at *5 (D. Minn. Nov. 21, 
2002) (adopting report and recommendation), or when the record makes clear that any 
amendment would be futile, see Paisley Park Enters. v. Boxill, 361 F. Supp. 3d 869, 880 
n.7 (D. Minn. 2019). On the other hand, when a plaintiff's claims "might conceivably be 
repleaded with success," dismissal without prejudice may be justified. Washington v. 

Craane, No. 18-cv-1464 (DWF/TNL), 2019 WL 2147062, at *5 (D. Minn. Apr. 18, 
2019), report and recommendation adopted, 2019 WL 2142499 (D. Minn. May 16, 2019). 
The excessive-recordkeeping-fees claim is better understood as falling in the latter 
category. 
Regarding the other claims as to which Plaintiffs have not plausibly alleged Article 
III injury, the jurisdictional character of this dismissal requires that it be without 
prejudice. List v. Cnty. of Carroll, 240 F. App'x 155, 156 (8th Cir. 2007) (per curiam) 

(noting that a dismissal for lack of subject-matter jurisdiction is effectively "a dismissal 
without prejudice"); Cnty. of Mille Lacs v. Benjamin, 361 F.3d 460, 464 (8th Cir. 2004) 
("A district court is generally barred from dismissing a case with prejudice if it concludes 
subject matter jurisdiction is absent."). Plainly, in this case's context, "judicial efficiency 
would be promoted by allowing leave to amend . . . rather than requiring [Plaintiffs] to 

commence a separate action." Lee v. Hennepin Cnty., No. 13-cv-1328 (PJS/AJB), 2013 
WL 6500159, at *4 (D. Minn. Dec. 11, 2013); see also Penrod v. K&N Eng'g, Inc., No. 
18-cv-02907 (ECT/LIB), 2019 WL 1958652, at *6 (D. Minn. May 2, 2019). 
Plaintiffs will be ordered to file any amended complaint within thirty days of the 
date of this order, or on or before January 11, 2023. If no amended complaint is filed by 

that deadline, the excessive-recordkeeping-fees claim will be dismissed with prejudice and 
on the merits, and the remainder of the case will be dismissed without prejudice for lack of 
subject-matter jurisdiction.6 
   
6 It is true that Plaintiffs did not comply with Local Rule 15.1(b) or attempt to show 
in some other way how an amended pleading might address the issues identified in 
Defendants' motion. Plaintiffs' request for leave to amend appears only in the second half 
of the final sentence of their opposition brief. Pls.' Mem. in Opp'n at 30 ("For the 
foregoing reasons, Plaintiffs respectfully request that the Court deny Defendants' Motion 
to Dismiss, or in the alternative, grant Plaintiffs leave to amend."). Raising the request in 
this passing way invites risk. See Far East Aluminum Works Co. Ltd. v. Viracon, Inc., 27 
F.4th 1361, 1367 (8th Cir. 2022). And because of how it was presented, Defendants 
justifiably objected to this request at the hearing. Though LR 15.1(b) serves important 
interests, including in the area of litigation efficiency, it makes better sense here to look 
 ORDER 
Based on the foregoing, and on all the files, records, and proceedings herein, IT IS 
ORDERED THAT: 

1. Defendants' Motion to Dismiss [ECF No. 21] is GRANTED. 
2. Plaintiffs' excessive-recordkeeping-fees claim is DISMISSED WITHOUT 
PREJUDICE pursuant to Federal Rule of Civil Procedure 12(b)(6). 
3. Plaintiffs' remaining claims are DISMISSED WITHOUT PREJUDICE 
for lack of subject-matter jurisdiction Pursuant to Federal Rule of Civil Procedure 12(b)(1). 

4. Within 30 days of the date of this Order, or on or before January 11, 2023, 
Plaintiffs may file an amended complaint. If no amended complaint is filed by that 
deadline, the excessive-recordkeeping-fees claim will be dismissed with prejudice and on 
the merits, and the remainder of the case will be dismissed without prejudice for lack of 
subject-matter jurisdiction. 

Dated: December 12, 2022 s/ Eric C. Tostrud 
 Eric C. Tostrud 
 United States District Court 

past this violation. The truth is that this result, and the way it was reached, was not 
contemplated or addressed specifically by the Parties when the motion was briefed and 
argued. And denying Plaintiffs the opportunity to amend risks putting the case in an odd 
posture: Plaintiffs would be compelled to appeal the Rule 12(b)(6) dismissal of the 
recordkeeping-fee claim to the Eighth Circuit. At the same time, Plaintiffs could appeal 
the jurisdictional ruling or perhaps might attempt to file a new case and complaint asserting 
the other theories supported by additional and more specific jurisdictional allegations. 
Especially considering the familiarity gained with the case in adjudicating Defendants' 
motion, better for me just to keep the case if Plaintiffs are intent on attempting to press 
ahead.