John Meiners, on behalf of a class of all persons similarly situated, and on behalf of the Wells Fargo & Company 401(k) Plan Plaintiff- Appellant
Wells Fargo & Company; Human Resources Committee of the Wells Fargo Board of Directors; Wells Fargo Employee Benefits Review Committee; Hope Hardison; Justin Thornton; Patricia Callahan; Michael Heid; Timothy Sloan; Lloyd Dean; John Chen; Susan Engel; Donald James; Stephen Sanger Defendants - Appellees Securities Industry and Financial Markets Association; American Benefits Council; Chamber of Commerce of the United States of America; ERISA Industry Committee Amid on Behalf of Appellees
Submitted: June 13, 2018
from United States District Court for the District of
GRUENDER, ERICKSON, and GRASZ, Circuit Judges.
Meiners ("Meiners") appeals from the district
court's order dismissing his Complaint for failure
to state a claim pursuant to Fed.R.Civ.P. 12(b)(6). Meiners
claimed that his former employer, Wells Fargo & Company
("Wells Fargo"), and an assortment of Wells Fargo
executives and entities (collectively, the "Wells Fargo
Defendants") breached their fiduciary duty under the
Employment Retirement Income Security Act
("ERISA"). He alleged two breaches: (1) retaining
Wells Fargo's proprietary investment funds as options for
Wells Fargo employees' 401(k) retirement plan (the
"Plan"), and (2) defaulting to these proprietary
investment funds for Plan participants who did not elect
sued the Wells Fargo Defendants for breach of fiduciary duty
under ERISA on behalf of the Plan and on behalf of a
purported class of similarly situated Plan participants.
During the relevant time period, the Plan allegedly offered
more than two dozen investment options, twelve of which were
Wells Fargo Dow Jones Target Date Funds ("Wells Fargo
TDFs"). These Wells Fargo funds were allegedly more
expensive (due to higher fees) than comparable Vanguard and
Fidelity funds and also underperformed the Vanguard funds.
Complaint, Meiners pled three counts against the Wells Fargo
Defendants: (I) Breach of Duty of Loyalty and Prudence
Against the Benefit Committee; (II) Breach of Co-Fiduciary
Duty Against Defendants Human Resources Committee, Hardison,
and Thornton; and (III) Knowing Participation in Breach of
Fiduciary Duty Against Wells Fargo. All three counts relied
on Meiners's claim that the Wells Fargo Defendants
breached their fiduciary duties when they failed to remove
their inordinately expensive and underperforming funds from
the Plan's options. Meiners further alleged that the
breach occurred because the Wells Fargo Defendants were
maximizing their own profits, selecting their funds as a
default out of improper financial motives to generate fees
and "seed" (provide financial support for) the
Wells Fargo Defendants moved to dismiss the Complaint under
Fed.R.Civ.P. 12(b)(6), and the district court granted the
motion. Meiners timely appealed. We affirm.
Standard of Review
review de novo a grant of a motion to dismiss under
Fed R. Civ. P. 12(b)(6). Adams v. Am. Family Mut. Ins.
Co., 813 F.3d 1151, 1154 (8th Cir. 2016). We accept the
well-pled allegations in the complaint as true and draw all
reasonable inferences in the plaintiff's favor.
Schriener v. Quicken Loans, Inc., 774 F.3d 442, 444
(8th Cir. 2014). "To survive a motion to dismiss, a
complaint must contain sufficient factual matter, accepted as
true, to 'state a claim to relief that is plausible on
its face.'" Id. (quoting Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009)). "A claim has
facial plausibility when the plaintiff pleads factual content
that allows the court to draw the reasonable inference that
the defendant is liable for the misconduct alleged."
Iqbal, 556 U.S. at 678. If the pled facts are merely
consistent with liable acts, the complaint "stops short
of the line between possibility and plausibility."
Id. (quoting Bell Atl. Corp. v. Twombly,
550 U.S. 544, 557 (2007)). In deciding or reviewing motions
to dismiss, courts may also consider those materials that are
necessarily embraced by the pleadings. See
Schriener, 774 F.3d at 444.
imposes two primary duties on fiduciaries: loyalty and
prudence. Braden v. Wal-Mart Stores, Inc., 588 F.3d
585, 595 (8th Cir. 2009). "[A] fiduciary shall discharge
his duties with respect to a plan solely in the interest of
the participants and beneficiaries . . . ." 29 U.S.C.
§ 1104(a)(1). The fiduciary shall also discharge its
duties "with the care, skill, prudence, and diligence
under the circumstances then prevailing that a prudent man
acting in a like capacity and familiar with such matters
would use in the conduct of an enterprise of a like character
and with like aims." Id. To state a claim for
breach of fiduciary duty, "a plaintiff must make a prima
facie showing that the defendant acted as a fiduciary,
breached its fiduciary duties, and thereby caused a loss to
the Plan." Braden, 588 F.3d at 594.
See 29 U.S.C. § 1109.
plaintiffs claiming a breach of fiduciary duty have a
challenging pleading burden because of their different levels
of knowledge regarding what investment choices a
plan fiduciary made as compared to how a plan
fiduciary made those choices. See Pension Benefit Guar.
Corp. ex rel. St. Vincent Catholic Med. Centers Ret. Plan v.
Morgan Stanley Inv. Mgmt. Inc., 712 F.3d 705, 718-19 (2d
Cir. 2013). ERISA plaintiffs typically have extensive
information regarding the selected funds because of
ERISA's disclosure requirements. See id. at
719-20. In contrast, they typically lack extensive
information regarding the fiduciary's "methods and
actual knowledge" because those details "tend to be
'in the sole possession of [that fiduciary].'"
Id. at 719 (alteration in original) (quoting
Braden, 588 F.3d at 598). As a result, the challenge
for ERISA plaintiffs is to use the data about ...