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Taylor v. United Tech. Corp.

United States Court of Appeals, Second Circuit
Dec 1, 2009
354 F. App'x 525 (2d Cir. 2009)

Summary

finding that the presence of a high concentration of mutual funds with revenue-sharing arrangements did not violate ERISA as a matter of law, despite expert evidence in support of the notion that "actively-managed mutual funds generally underperform passive index funds" and that "less-costly managed separate trust accounts outweigh the advantages of mutual funds," because "plaintiffs have not addressed the imprudence of selecting any particular actively-managed mutual funds"

Summary of this case from Rosen ex rel. Ferguson Enters., Inc. v. Prudential Ret. Ins. & Annuity Co.

Opinion

No. 09-1343-cv.

December 1, 2009.

Appeal from a March 3, 2009 order of the United States District Court for the District of Connecticut (Warren W. Eginton, Judge).

UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that the judgment of the District Court be AFFIRMED.

Michael A. Wolff, Schlichter Bogard Denton LLP, St. Louis, MO (Jerome J. Schlichter, Jason P. Kelly, Sean E. Soyars, Schlichter Bogard Denton LLP, St. Louis, MO, on the brief, Stuart B. Katz, Cohen and Wolf PC, Bridgeport, CT, of counsel), for Plaintiffs-Appellants.

Jeffrey G. Huvelle (Thomas L. Cubbage III, Peter A. Swanson, on the brief) Covington Burling, Washington, D.C., for Defendants-Appellees.

PRESENT: JOSÉ A. CABRANES, ROBERT D. SACK, Circuit Judges, PAUL A. CROTTY, District Judge.

The Honorable Paul A. Crotty, of the United States District Court for the Southern District of New York, sitting by designation.


SUMMARY ORDER

Plaintiffs-appellants David Taylor, Jim Conlin, and Karl Todd, individually, and as representatives of those similarly situated (collectively, "plaintiffs"), appeal from an order of the District Court granting summary judgment in favor of defendants-appellees United Technologies Corporation, United Technologies Corporation Pension Investment Committee, and United Technologies Corporation Pension and Administration Committee (jointly, "defendants"), in plaintiffs' action under the Employment Retirement Income Security Act of 1974 ("ERISA"). Specifically, plaintiffs allege that defendants breached their fiduciary duties pursuant to ERISA with respect to an employee benefit plan. We assume the parties' familiarity with the underlying facts, procedural history, and issues on appeal.

Plaintiffs allege that the District Court erred in concluding that there was no evidence on which plaintiffs could obtain a judgment in their favor. Specifically, plaintiffs maintain that their evidence showed that (1) defendants chose retail mutual funds as investment options for employees without considering the deficiencies of mutual funds for large retirement plans, as compared to alternatives more suited to large retirement plans; (2) defendants' mutual funds deducted from participant investments unreasonably high sub-transfer-agent fees for more than the amount due under contract; (3) defendants did not disclose full information about those sub-transfer-agent fees and failed to investigate or otherwise account for the allegedly excessive amount being paid; and (4) defendants operated the employee-stock fund imprudently, causing significant underperformance.

We review de novo the District Court's decision to grant summary judgment and, in the course of that review, we resolve ambiguities and draw all permissible factual inferences in favor of the non-moving party. See, e.g., Holcomb v. Iona College, 521 F.3d 130, 137 (2d Cir. 2008); Nationwide Life Ins. Co. v. Bankers Leasing Ass'n, 182 F.3d 157, 160 (2d Cir. 1999).

We have considered each of plaintiffs arguments on appeal and, substantially for the reasons stated in the District Court's thorough and well-reasoned memorandum of decision dated March 3, 2009, Taylor v. United Technologies Corp., No. 06-cv-1494, 2009 WL 535779 (D.Conn. 2009), we find them to be without merit.

CONCLUSION

Accordingly, we AFFIRM the judgment of the District Court.


Summaries of

Taylor v. United Tech. Corp.

United States Court of Appeals, Second Circuit
Dec 1, 2009
354 F. App'x 525 (2d Cir. 2009)

finding that the presence of a high concentration of mutual funds with revenue-sharing arrangements did not violate ERISA as a matter of law, despite expert evidence in support of the notion that "actively-managed mutual funds generally underperform passive index funds" and that "less-costly managed separate trust accounts outweigh the advantages of mutual funds," because "plaintiffs have not addressed the imprudence of selecting any particular actively-managed mutual funds"

Summary of this case from Rosen ex rel. Ferguson Enters., Inc. v. Prudential Ret. Ins. & Annuity Co.

rejecting the plaintiff's argument that the defendants breached their fiduciary duties where ten of the sixteen investment options offered by the plan were actively-managed and plaintiff claimed that actively-managed funds generally underperform passively-managed funds

Summary of this case from Terraza v. Safeway Inc.

dismissing ERISA claims based on revenue-sharing fees where "plaintiffs have failed to proffer evidence evincing that [defendant]'s receipt of its negotiated base fee and sub-transfer agent fees was materially unreasonable and beyond the market rate"

Summary of this case from Rosen ex rel. Ferguson Enters., Inc. v. Prudential Ret. Ins. & Annuity Co.
Case details for

Taylor v. United Tech. Corp.

Case Details

Full title:David S. TAYLOR, Jim Conlin, and Karl Todd, individually, and as…

Court:United States Court of Appeals, Second Circuit

Date published: Dec 1, 2009

Citations

354 F. App'x 525 (2d Cir. 2009)

Citing Cases

Rosen ex rel. Ferguson Enters., Inc. v. Prudential Ret. Ins. & Annuity Co.

oss the country have generally found that the practice of revenue-sharing does not, in principle, constitute…

Terraza v. Safeway Inc.

And courts have rejected the notion that offering a majority of actively-managed investment options…