Judge Denies Kimberly-Clark Corp.’s Motion to Dismiss

A federal judge in Texas has ruled that breach of fiduciary duty arguments brought against the Kimberly-Clark Corp. as a plan sponsor can proceed. Headquartered in Irving, Texas, Kimberley-Clark manufacturers medical equipment, as well as paper products such as Kleenex and Kotex.

The court denied the company’s motion to dismiss Seidner v. Kimberly-Clark Corp., stating that the arguments of the plaintiffs, former workers at Kimberly-Clark, supported the fiduciary breaches of the duty of prudence and the duty to monitor plan investments and service providers.

“The court determines that plaintiffs have standing to sue for the ERISA violations alleged, and that plaintiffs have alleged sufficient facts regarding their breach of fiduciary duty claims to survive dismissal at the pleading stage of this litigation” wrote U.S. District Judge Sam A. Lindsay in U.S. District Court for the Northern District of Texas, Dallas Division, in the ruling.

The class action lawsuit is an amended version of a suit filed in 2021. The amended complaint corrected for deficiencies noted by the court, wrote Lindsay.

“Plaintiffs’ Amended Complaint includes allegations that the named Plaintiffs, Ms. Seidner and Mr. Mackrory, personally suffered financial harm during the Class Period in the form of lower retirement account balances as a result of the excessive recordkeeping fees paid by the Plan,” wrote Lindsay. “Thus, the court determines that Plaintiffs’ allegations are sufficient to show that their alleged injuries are particularized in an individual way, as well as concrete in nature.”

The amended complaint asked that the court require the defendants to make good to the plan all losses resulting from their alleged breaches of fiduciary duty.

“Kimberly-Clark is disappointed with the decision but intends to continue to vigorously defend its 401(k) Plan, which has provided valuable retirement benefits for its employees, in this lawsuit,” wrote Karl Nelson, a partner at the law firm Gibson, Dunn and Crutcher LLP, in an email.

The initial complaint was brought in 2021. The plan had more than 16,000 participants and assets of approximately $4 billion, according to the original complaint.

The plaintiffs are represented by attorneys from the law offices of Walcheske and Luzi LLC, based in Brookfield, Wisconsin, and by attorney Joe Kendall, of the Kendall Law Group, based in Dallas.

The defendants are represented by attorneys with Dallas-based Gibson, Dunn and Crutcher LLP.