Santomenno v. John Hancock Life Ins. Co. - PLANSPONSOR.com

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Case 2:10-cv-01655-WJM-MF Document 84 Filed 07/24/13 Page 4 of 10 PageID: 4185the light most favorable to the plaintiff. See Warth v. Seldin, 422 U.S. 490, 501 (1975);Trump Hotels & Casino Resorts, Inc. v. Mirage Resorts Inc., 140 F.3d 478, 483 (3d Cir.1998).Although a complaint need not contain detailed factual allegations, “a plaintiff’sobligation to provide the ‘grounds’ of his ‘entitlement to relief’ requires more than labelsand conclusions, and a formulaic recitation of the elements of a cause of action will notdo.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). Thus, the factual allegationsmust be sufficient to raise a plaintiff’s right to relief above a speculative level, such that itis “plausible on its face.” See id. at 570; see also Umland v. PLANCO Fin. Serv., Inc.,542 F.3d 59, 64 (3d Cir. 2008). A claim has “facial plausibility when the plaintiff pleadsfactual content that allows the court to draw the reasonable inference that the defendant isliable for the misconduct alleged.” Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009) (citingTwombly, 550 U.S. at 556). While “[t]he plausibility standard is not akin to a‘probability requirement’ . . . it asks for more than a sheer possibility.” Iqbal, 129 S.Ct.at 1949 (2009).III.DISCUSSIONIn the Second Amended Complaint, Plaintiffs assert breach of fiduciary dutyclaims under ERISA § 404(a) in connection with the following practices:(1) Count 1: Charging Excessive Sales and Service Fees for John Hancock Funds;(2) Count 2: Charging Excessive Sales and Service Fees for Independent Funds;(3) Count 3: Charging 12b-1 Fees for John Hancock Funds;(4) Count 4: Charging 12b-1 Fees for Independent Funds;(5) Count 5: Charging Excessive Investment Advisor Fees;(6) Count 6: Receiving Revenue-Sharing Payments; and(7) Count 7: Selecting the JHT-Money Market Trust as an Investment Option.In Counts 1, 2, 3, 5, and 6, Plaintiffs also assert prohibited transaction claims underERISA § 406.Defendants move to dismiss on nine grounds, arguing that: (1) Plaintiffs failed toexhaust their administrative remedies; (2) Plaintiffs’ claims are time-barred; (3) Plaintiffslack standing to sue for certain investment options; (4) the John Hancock affiliates shouldbe dismissed; (5) Counts 3, 4, 5, and 6 duplicate the dismissed ICA claims; (6) Counts 1,2, and 7 are not plausible claims; (7) Plaintiffs failed to plead loss causation; (8) Plaintiffsfailed to plead their prohibited transaction claims; and (9) John Hancock is not an ERISAfiduciary.The Court finds that John Hancock is not an ERISA fiduciary for the purpose ofany of the claims asserted in this case. Because this requires a complete dismissal of all4
Case 2:10-cv-01655-WJM-MF Document 84 Filed 07/24/13 Page 5 of 10 PageID: 4186of Plaintiff’s claims, the Court does not reach the parties’ other arguments. 2 The Courtwill address (1) the law governing ERISA fiduciary status, generally; (2) the lawgoverning ERISA fiduciary status in 401(k) fee cases; and (3) why John Hancock is notan ERISA fiduciary in this case.A. ERISA Fiduciary Status, GenerallyERISA requires each plan to have one or more named fiduciaries that are grantedthe authority to manage the operation and administration of the plan. 3 29 U.S.C. §1102(a)(1). In addition, an entity that is not a named fiduciary may be considered anERISA fiduciary in certain circumstances. ERISA provides that:a person is a fiduciary with respect to a plan to the extent(i) he exercises any discretionary authority or discretionary controlrespecting management of such plan or exercises any authority orcontrol respecting management or disposition of its assets,(ii) he renders investment advice for a fee or other compensation,direct or indirect, with respect to any moneys or other property ofsuch plan, or has any authority or responsibility to do so, or(iii) he has any discretionary authority or discretionary responsibilityin the administration of such plan.29 U.S.C. § 1002(21)(A) (emphasis added).Because an entity is only a fiduciary “to the extent” that it possesses authority orcontrol over the plan, id., “fiduciary status is not an all or nothing concept.” Moench v.Robertson, 62 F.3d 553, 561 (3d Cir. 1995) (quotations omitted). Instead, courts “mustask whether [the entity] is a fiduciary with respect to the particular activity in question.”Srein v. Frankford Trust Co., 323 F.3d 214, 221 (3d Cir. 2003) (quotations omitted). “Inevery case charging breach of ERISA fiduciary duty, then, the threshold question is . . .whether [the entity] was acting as a fiduciary . . . when taking the action subject tocomplaint.” Pegram v. Herdrich, 530 U.S. 211, 226 (2000).2 In their renewed motion to dismiss, Defendants raise arguments that they raised in their firstmotion, and also raise new arguments that they never asserted before. Plaintiffs argue thatDefendants are barred from raising new arguments by Federal Rule of Civil Procedure 12(g)(2)(“a party that makes a motion under this rule must not make another motion under this ruleraising a defense or objection that was available to the party but omitted from its earliermotion”). Because Defendants previously argued that John Hancock is not an ERISA fiduciary,and the Court decides the motion on that ground, it is unnecessary to decide the Rule 12(g)(2)issue.3 In this case, the Trustees are the named fiduciaries.5
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