Krueger v. Ameriprise Financial, Inc. - Blog

CASE 0:11-cv-02781-SRN-JSM Document 67 Filed 11/20/12 Page 22 of 44
Defendants at the expense of Plaintiffs. If these allegations are substantiated, then the
process by which Defendants selected and managed the funds in the Plan would have
been tainted “by failure of effort, competence, or loyalty.” Braden, 588 F.3d at 596.
Plaintiffs’ allegations are similar to Braden and Gipson where the plaintiffs claimed their
fiduciaries retained underperforming affiliated investments for the benefits that they
provided to them.
Defendants attempt to distinguish Braden factually, primarily based on specific
aspects of the plan in that case. They argue that the plan in Braden was “static,” while
the Investment Committee in this case “continuously revisited and revised the Plan’s core
lineup since the formation.” (Defs.’ Mem. at pp. 18–19) (emphasis omitted.) Defendants
also contend that, unlike the plan in Braden, they did not charge 12b-1 fees, from which
plan participants derived no benefit. (Id. at pp. 19–20.) Finally, Defendants assert that,
unlike Braden, Plaintiffs do not allege a “revenue sharing” arrangement in which the
trustee received kickbacks for including certain investments in the plan lineup. (Id. at pp.
17–23.) Defendants also argue that Gipson is distinguishable because the plaintiffs in
that case alleged the plan could have invested in cheaper and higher-return share classes
of the same funds, while plaintiffs here do not make such an allegation. (Defs.’ Reply
Mem. at p. 6 n.2.)
The Court disagrees. The Eighth Circuit in Braden explicitly stated that the
“gravamen” of the plaintiffs’ complaint was that the defendants “failed adequately to
evaluate the investment options included in the Plan” and as a result chose affiliated
investment options that charged excessive fees. 588 F.3d at 589–90. That is exactly
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