Ohio Judge Dismisses ERISA Lawsuit Against Grocery Chain

Fiduciary breach allegations against grocery store chain Kroger were halted after a federal judge in Ohio ruled in favor of the defendant’s motions to dismiss.  

U.S. District Judge Timothy S. Black, of the U.S. District Court for the District of Ohio, Western Division, last week ruled in favor of the defendants and dismissed the fiduciary breach lawsuit Lisa Sigetich et al. v. the Kroger Co. et al, over Kroger not negotiating lower fees.

Black found arguments from the plaintiffs insufficient, agreed with the defendants and granted the motions to dismiss. The plaintiffs had alleged fiduciary breach of prudence to participants in the Kroger Co. 401(k) Savings Account Plan and alleged failure to monitor other fiduciaries.

Black was unconvinced.

For an alleged fiduciary breach claim based on imprudent recordkeeping fees to survive the motion to dismiss, a plaintiff must plead facts which would allow a plausible inference that the recordkeeping fees were excessive relative to the services rendered, the order states.

“Plaintiff fails to allege that the Kroger plan’s recordkeeping fees were excessive when compared to services rendered,” Black stated. “Plaintiff fails to give any context to the services rendered to the Kroger plan or to the services rendered to her comparable plans which may lead to the inference that the Kroger Plan’s recordkeeping fees were excessive relative to the services rendered.”

In 2019, the Kroger Plan had about $5.9 billion in retirement assets for 92,210 participants, according to the original complaint.

Black dismissed the second ERISA count—for failure to monitor—based on precedent and relevant case law in Peck v. Munson Healthcare, adjudicated in the U.S. District Court for the Western District of Michigan, the order shows.

Quoting from the Peck ruling, “‘The sufficiency of these claims depends on the sufficiency of Plaintiff’s breach of prudence claims,’” Black stated. “Accordingly, the motion to dismiss Count II is granted.”

Sigetich was a customer representative at Kroger in Wisconsin who is now on disability leave. She has been a participant in the plan since November 2015.

The plaintiff was represented in court by Strauss Troy Attorneys at Law, based in Cincinnati, and the law offices of Walcheske & Luzi LLC, headquartered in Brookfield, Wisconsin.

The defendant was represented by Morgan, Lewis & Bockius LLC, based in Philadelphia.  

The initial complaint was brought before the Ohio court in 2021. Kroger representatives did not return a request for comment on the litigation.