Having repeatedly come up short, the plaintiffs in an excessive fee case have just come up short – again.
The plaintiffs in this case have been at it since February 2016, when they, represented by the St. Louis-based litigation powerhouse Schlichter, Bogard & Denton, first challenged the $19 billion Chevron plan’s decision to offer the Vanguard Prime Money Market Fund, rather than a lower-cost and better-performing stable value fund.
The plaintiffs had asked the full (en banc) Ninth Circuit to consider their case, arguing that the three-judge panel improperly held their claims to a strict pleading standard that conflicted with other decisions from the Ninth Circuit and other appeals courts.
The plaintiffs had argued that their case “…presents a question of exceptional importance over a rule of national application for which there is an overriding need for national uniformity, namely, the proper pleading standards to apply to a fiduciary breach claim under the Employee Retirement Income Security Act (ERISA),” specifically, is it sufficient for an ERISA plaintiff to allege indirectly that a fiduciary process was tainted by lack of effort, competence, or loyalty? The plaintiffs argue that the Seventh and Eighth Circuits hold it is, and that the Fifth Circuit and the Ninth “agree with the principles underlying those decisions” – and thus that the previous Chevron decision is in conflict, not only with those decisions, but with decisions in the Ninth Circuit itself. “The panel imposed the wrong standard, an impermissibly strict standard, which the Court en banc should correct,” they argue.
However, that argument proved to be unpersuasive. In a short statement, it was noted that “Judge Hurwitz has voted to deny the petition for rehearing en banc, and Judges Hawkins and Eaton so recommend. The full court has been advised of the petition for rehearing en banc, and no judge has requested a vote on whether to rehear the matter en banc.”
All of which means, of course, that the Ninth Circuit’s rejection of the plaintiffs’ case stands – basically a finding that the participants’ assertion that Chevron acted in its own interests and Vanguard’s interests rather than the participants’ interests was “entirely speculative” and “unsupported by any facts.”
The case is White et al. v. Chevron Corp. et al., case number 17-16208, in the U.S. Court of Appeals for the Ninth Circuit.