Fidelity won a huge case.
Schlichter, Bogard & Denton brought a lawsuit on behalf of four participants in Shell Oil Co.’s 401(k) plan. While the case focused on excessive fees, it alleged that the use of participant data by Fidelity, the recordkeeper to solicit non-plan-related services was wrong. The complaint alleged that Shell and Fidelity caused the Plan to engage in transactions that constituted a plan asset.
U.S. District Judge Jeffery Vincent Brown of the District Court for the Southern District of Texas, Galveston Division granted Fidelity’s motion to dismiss those claims.
The Judge threw out the participant data as plan records because regulations promulgated under ERISA don’t consider participant data as a plan asset. Also, the complaint tried to imply that Fidelity was a fiduciary and they certainly weren’t.
Expect more litigation from a federal district court near you.
