Humphries v. Mitsubishi Chemical America, Inc.

Background

Robert Humphries brought a proposed class action under the Employee Retirement Income Security Act (ERISA) concerning the Mitsubishi Chemical America Employees’ Savings Plan. He alleged that the defendants breached their fiduciary duties by failing to monitor: (1) whether the Plan used lower-cost mutual-fund share classes; (2) the Plan’s Prudential Guaranteed Interest Account, a stable-value fund; and (3) the Plan’s administrative fees and expenses.

The defendants moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), arguing that the complaint did not state valid claims. They also argued that Humphries lacked constitutional standing—the required personal injury needed to invoke federal-court jurisdiction—for the investment-related claims.

Standing for the Investment Claims

The court held that Humphries lacked standing to pursue the share-class and stable-value-fund claims. Because this was a defined-contribution plan, participants’ benefits depended on their individual accounts and investment choices. Humphries did not allege that he invested in any of the seven mutual funds involved in the share-class claim. The court therefore dismissed that claim without prejudice for lack of standing.

The complaint also did not allege whether Humphries personally invested in the Prudential Guaranteed Interest Account. His lawyer stated at oral argument that Humphries had invested in the fund, but the court found that statement, without supporting factual allegations or evidence, insufficient to establish standing. The court therefore dismissed the stable-value-fund claim without prejudice.

The court found that Humphries did have standing to challenge the Plan’s administrative fees because he alleged that all participants personally paid those fees. The court rejected the argument that his injury from paying administrative fees gave him standing to pursue the separate investment claims on behalf of the proposed class, because those claims involved different conduct and evidence.

Administrative-Fees Claim

The court then considered the merits of the administrative-fees claim. Humphries alleged that participants paid between $175 and $375 per year in administrative fees from 2017 through 2021, while surveys and other retirement plans reflected lower amounts.

The court held that these comparisons did not plausibly show that the fees were excessive in relation to the services the Plan received. The complaint relied on total administrative-fee amounts but did not adequately describe the services provided to the Plan or establish that the comparison plans provided substantially similar services. The court also found that the survey figures primarily concerned recordkeeping, trust, and custody costs, which were only part of the Plan’s overall administrative expenses. The administrative-fees claim was dismissed without prejudice.

Kitty Antwine

The defendants separately sought dismissal of the claims against Kitty Antwine. The complaint alleged that Antwine signed the Plan’s annual reports as the person signing as plan administrator. The court held that signing those reports, without allegations that Antwine exercised or was authorized to exercise discretionary control over the Plan or its assets, did not establish that she was an ERISA fiduciary. The court dismissed the claims against Antwine without prejudice.

Leave to Amend and Disposition

The court granted Humphries leave to file an amended complaint because he had not previously amended the complaint and the court could not conclude that amendment would necessarily be futile. The amended complaint, if filed, was due within 30 days of the opinion and order.

The court granted Defendants’ motion to dismiss. The share-class, stable-value-fund, and administrative-fees claims, as well as the claims against Kitty Antwine, were dismissed without prejudice. The Clerk was directed to terminate the motion.