Facing these allegations, defendants moved to dismiss Lorenz’s complaint on grounds that his claims are untimely and fail to state a claim for breach of fiduciary duty, “because the expense ratios of the JP Morgan Smartretirement Passiveblend funds were reasonable as a matter of law and Great-West was not compensated through a revenue-sharing agreement, but rather through a per-participant fee.” SafeWay also argues that plaintiff “failed to state a prohibited transaction claim because the transaction was exempt under ERISA; even if Lorenz has stated a prohibited transaction claim, he lacks constitutional standing to bring such claim.” Finally, the defense argues the plaintiff “may not seek monetary damages against Great-West because it is a party in interest, not a fiduciary.”
The court applies ERISA rules 12(b)(1) and 12(b)(6) to reach its conclusions on whether these matters can be litigated—along with a laundry list of precedent-setting cases, such as Cetacean Cmty. v. Bush; Safe Air for Everyone v. Meyer; Wolfe v. Strankman; Savage v. Glendale Union High Sch., Dist. No. 205, Maricopa, Cty.; Bell Atl. Corp. v. Twombly; Ashcroft v. Iqbal; Knievel v. ESPN; and numerous others.
Applying principles from these cases to the matter hand, the court “finds that Lorenz has adequately alleged a concrete injury sufficient to establish Article III standing. Lorenz alleges that he invested in the JP Morgan target date funds, that a portion of the amount he invested was used to compensate Great-West, that the compensation was excessive, and that, as a result, he received lower investment returns … Regardless of whether Lorenz has advanced a plausible theory that Great-West did in fact receive excessive compensation, the court assumes the merits of his legal claim for purposes of the standing analysis. Therefore, Lorenz does not allege a mere technical violation of ERISA; he alleges that the prohibited transaction between the Safeway Defendants and Great-West caused him to suffer real financial injury … The cases that Great-West cites are inapposite.”
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