Skip to main content

You are here


Kellogg’s Excessive Fee Case Crumbles


Snap, Crackle—and now, Pop! Another multi-billion 401(k) plan has won its case against allegations of excessive fees.

The victor this time—winning dismissal of a proposed class action with prejudice[i]—was Kellogg’s, and the fiduciaries of its $1.9 billion 401(k) plan. The suit had been filed about a year ago by one Bradley H. Fleming, a former accountant at Kellogg’s, who had sued his former employer, the Kellogg Co., its board of directors, its ERISA finance committee and its ERISA administrative committee - claiming that they didn’t properly monitor the account service fees. 

More specifically, the suit claimed that the defendants named above “breached the duty of prudence they owed to the Plan by requiring the Plan to “pay [ ] excessive recordkeeping fees [and managed account fees],” and by failing to timely remove their high-cost recordkeepers, Transamerica Retirement Solutions (“Transamerica”) (2016-2020), and Fidelity Investments (“Fidelity”) (2021-present).”

The suit claimed that those (in)actions cost participants nearly $10 million in unnecessary fees during the class period (2016-2020)—some $137/participant, rather than the $35/participant the plaintiff had argued was what plans of allegedly comparable sizes were charging.  Kellogg’s had responded that plan participants were charged $66 from 2016 to 2019, $45 from 2019 to 2020 and $36 in 2021.

The dismissal order (Fleming v. Kellogg Co. et al., case number 1:22-cv-00593, in the U.S. District Court for the Western District of Michigan) was signed last week by Judge Jane M. Beckering of the US District Court for the Western District of Michigan—but didn’t include an explanation/rationale for the dismissal, though it did reference a bench opinion filed the day before.

Kellogg had sought to dismiss the suit last September and reaffirmed its dismissal bid following an amended complaint filed by the plaintiff. Kellogg’s had argued that Fleming failed to state a claim and lacked standing to bring suit (as well as getting his facts wrong, as noted above). 

They also argued that Fleming’s claims were limited by a mandatory arbitration provision that had been added to the plan in January 2020. Fleming challenged that last part, citing recent district court rulings that invalidated such arbitration clauses in these type actions.

The plaintiff here was represented by Paul M. Secunda of Walcheske & Luzi LLC[ii] and Troy W. Haney of Haney Law Firm PC. 

  • Nevin E. Adams, JD

[i] “With prejudice” means that the plaintiffs can’t try again with an amended complaint.

[ii] A firm that has been involved in many such excessive fee lawsuits -