District Court dismisses 401(k) fiduciary breach lawsuit against Chevron

A lawsuit against Chevron Corp. over alleged 401(k) fiduciary breaches has been dismissed by a U.S. District Court judge in Oakland, Calif. Judge Phyllis J. Hamilton on Monday granted defendants' motion to dismiss the complaint brought by participants in the roughly $19 billion Chevron Employee Savings Investment Plan, San Ramon, Calif., in February. The plaintiffs argued that Chevron and members of the 401(k) plan's investment committee breached their fiduciary duties by offering high-cost and underperforming funds, providing a money market fund instead of a stable value fund and paying excessive record-keeping fees to Vanguard Group, among other wrongdoings. Ms. Hamilton wrote Monday that plaintiffs did not raise a “plausible inference that defendants breached their fiduciary duties and/or duties of loyalty and prudence,” and have until Sept. 30 to file an amended complaint. Specifically, regarding record-keeping fees, Ms. Hamilton wrote that plaintiffs argued record-keeping fees were excessive but did not show what Vanguard charged and failed to show they were excessive for the services rendered. Regarding the plan's investment management fees, Ms. Hamilton wrote that “the breadth of investments and range of fees the plan offered participants fits well within the spectrum that other courts have held to be reasonable as a matter of law.” A Chevron spokeswoman declined to comment. The plaintiffs are represented by law firm Schlichter, Bogard & Denton, which filed similar complaints against several top universities earlier this month. Jerome J. Schlichter, founding and managing partner at the law firm, could not immediately be reached for comment. Meaghan Kilroy is a reporter with InvestmentNews' sister publication, Pensions & Investments.