A recent excessive fee lawsuit has been withdrawn before the defendants could even respond.
Less than a month after filing, plaintiffs in the case of Damberg v. LaMettry’s Collision, Inc., D. Minn., No. 0:16-cv-01335, filed for a voluntary dismissal of their lawsuit. The participant-plaintiffs were part of a 114-participant plan that had (in 2014) less than $10 million in plan assets.
The case – which some held out as a harbinger of this type litigation moving down market – stood out in an environment where for a decade the vast majority of the so-called “excessive fee” revenue-sharing lawsuits have been filed against multi-billion dollar 401(k) plans. Little wonder since, as bank robber Willy Sutton once opined, “That’s where the money is” — in this case, the assets and fees make for multi-million dollar contingency fees for plaintiff’s lawyers.
This complaint, as with others before it, argued that the share classes made available to participants in the plan were more expensive than otherwise identical funds associated with lower-priced share classes of which the plan was eligible to take advantage, challenged the use of an asset-based fee for recordkeeping charges, and also invoked concerns that “defendants also failed to consider how lower-cost institutional funds could be used to avoid excessive fees for the Pooled Separate Accounts.”
A copy of the notice of dismissal was provided by DeWitt Mackall Crounse & Moore, who represented the defendants in this action. They noted that the dismissal was filed before the defendants could file their answer formally refuting the allegations made in the complaint as being without merit.
