A class action alleging that BlackRock entities favored their own proprietary funds when selecting investment options for BlackRock’s 401(k) Plan is headed for trial after Judge Haywood S. Gilliam, Jr. denied both parties’ motions for summary judgment on January 12, 2021. Baird v. BlackRock Inst’l. Trust Co., No. 17-1892 (N.D. Cal. Jan. 12, 2021).

BlackRock sought summary judgment on Plaintiffs’ claims for breaches of fiduciary duty. The court denied the motion for several reasons. First, the court held that summary judgment was precluded because a genuine dispute of a material fact existed as to whether BlackRock complied with the Plan’s Investment Policy Statement. Next, the court held that Defendants’ “loss causation” arguments involved weighing the parties’ respective experts and their methodologies, “a task which is inappropriate at the summary judgment stage.”

The court then turned to whether certain of Plaintiffs’ prohibited transaction claims were time-barred because they were not brought within six years after “the date of the last action which constituted a part of the breach or violation.” 29 U.S.C. § 1113(1). BlackRock argued the only relevant transaction for claims based on including a fund in a plan line up is the date the fund is initially added. The court rejected the argument, reasoning that (1) the case law did not support such a broad proposition, and (2) Plaintiffs’ claims were not based solely on including the challenged funds, but also involved the fees paid to BlackRock affiliates.

Finally, the court found that summary judgment was inappropriate on the merits of Plaintiffs’ prohibited transaction claims, maintaining the prohibited transaction exemptions required examination of the reasonableness of compensation received by the Defendants, which required resolution of disputed issues of fact.

The court likewise denied Plaintiffs’ motion for partial summary judgment as to liability. Trial is scheduled to begin on March 1, 2021.

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Photo of Stacey C.S. Cerrone Stacey C.S. Cerrone

Stacey C.S. Cerrone is a principal and office litigation manager of the New Orleans, Louisiana office of Jackson Lewis P.C. and a core member of the Employee Benefits and the ERISA Complex Litigation practice teams. Her nationwide practice focuses on the defense of…

Stacey C.S. Cerrone is a principal and office litigation manager of the New Orleans, Louisiana office of Jackson Lewis P.C. and a core member of the Employee Benefits and the ERISA Complex Litigation practice teams. Her nationwide practice focuses on the defense of complex ERISA class actions filed against public and private single employer ERISA plan sponsors and fiduciaries, as well as multi-employer plans and fiduciaries and ERISA plan services providers. Stacey litigates a wide variety of class action claims, including 401(k) fee claims, stock drop claims, “church plan” and “government plan” claims, health and welfare plan claims, and ERISA Section 510 claims.  She also litigates ERISA benefit claims and claims involving non-ERISA plans.

Photo of René E. Thorne René E. Thorne

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Her national practice…

René E. Thorne is co-leader of the firm’s ERISA Complex Litigation group, and is a principal in the New Orleans, Louisiana, office of Jackson Lewis P.C. René started the New Orleans office and was the managing principal for ten years.

Her national practice covers the full range of complex benefit litigation matters, including representation of employers, plans, plan fiduciaries, third party administrators, and trustees. In that regard, she has handled numerous ERISA class actions alleging breach of fiduciary duty; breach of the duty of loyalty; prohibited transactions; 401(k) plan asset performance, fees, and expense issues; defined benefit plan asset issues, accrual issues, and cut-back issues; cash balance plan issues; ESOP litigation; fiduciary misrepresentation claims; sophisticated preemption issues; executive compensation litigation, both pension and welfare claims; retiree rights litigation; severance plan claims; Section 510 cases; and complex benefit claim cases.

Photo of Howard Shapiro Howard Shapiro

Howard Shapiro is a principal in the New Orleans, Louisiana, office of Jackson Lewis P.C., and is co-leader of the firm’s ERISA Complex Litigation group. Howard focuses his practice on the defense of large, sophisticated ERISA class actions.

Howard defends “bet-the-company” litigation where…

Howard Shapiro is a principal in the New Orleans, Louisiana, office of Jackson Lewis P.C., and is co-leader of the firm’s ERISA Complex Litigation group. Howard focuses his practice on the defense of large, sophisticated ERISA class actions.

Howard defends “bet-the-company” litigation where damages are potentially material. His cases involve the defense of Defined Benefit plans, 401(k) Plans, and 403(b) Plans. He also defends litigation involving health and welfare plan issues. His practice is nationwide, and throughout his career, Howard has appeared as counsel across the entire country.