Huang v. TriNet HR III, Inc.

UNITED STATES DISTRICT COURT

MIDDLE DISTRICT OF FLORIDA

TAMPA DIVISION

SHIQIONG HUANG, CHRIS R.

STOKOWSKI, EVERETT UHL, and

MARK J. HEARON,

Plaintiffs,

v. Case No. 8:20-cv-2293-VMC-TGW

TRINET HR III, INC., et al.,

Defendants.

______________________________/

ORDER

This matter is before the Court on consideration of the

Motion for Summary Judgment (Doc. # 92), filed on November

18, 2022, and the Daubert Motion to exclude the testimony of

Plaintiffs’ expert (Doc. # 93), filed on November 21, 2022,

by Defendants TriNet HR III, Inc., TriNet HR IV, Inc., the

Board of Directors of TriNet III, Inc., the Board of Directors

of TriNet IV, Inc., the Investment Committee of TriNet Group,

Inc., and John Does 1-30. Plaintiffs responded to Defendants’

Motions on December 9, 2022, and December 12, 2022,

respectively. (Doc. ## 98, 100). Defendants replied on

December 23, 2022. (Doc. # 103). For the reasons that follow,

both Defendants’ Daubert Motion and Motion for Summary

Judgment are granted.

1

I. Background

This is a class action brought under the Employee

Retirement Security Act of 1974 (“ERISA”) by Plaintiffs

Shiqiong Huang, Chris R. Stokowski, Everett Uhl, and Mark J.

Hearon, participants in the TriNet Select 401(k) Plan

(“Plan”). Plaintiffs allege that the authorities responsible

for overseeing the Plan breached their fiduciary duties under

ERISA in two respects: (1) by selecting high-cost,

underperforming investment options and (2) by causing the

Plan participants to pay excessive recordkeeping fees. (Doc.

# 23 at ¶¶ 117-130). The Court previously certified the

following class to pursue these claims:

All persons, except Defendants and their immediate

family members, who were participants in or

beneficiaries of the TriNet IV Plan, at any time

between September 29, 2014 through the date of

judgment.

(Doc. # 85 at 30).

A. TriNet and the Retirement Committee

TriNet Group, Inc. (“TriNet”) provides human resources

services to small and medium-sized businesses and offers its

client-employers the opportunity to participate in one of two

defined contribution 401(k) plans: the TriNet 401(k) Plan

(“TriNet III”) and the Plan at issue. (Doc. # 23 at ¶¶ 24,

2

41). At the beginning of the Class Period, the Plan had 8,417

participants. The number of participants steadily climbed:

11,877 in 2017, 14,420 in 2018, 16,167 in 2019, and 18,200 in

2020. (Doc. # 92-19 at 145). The Plan is a multiple employer

plan (“MEP”) with more than 1,200 participating employers.

(Doc. # 92-2 at ¶ 3).

From September 29, 2014, to the present (“Class

Period”), the Retirement Committee (“RC”) was delegated

authority to administer the Plan, including retaining a

recordkeeper and selecting and monitoring the Plan’s

investment options. (Id. at ¶ 6). The RC comprised between

five and seven TriNet employees with expertise in different

subject areas, including in finance, human resources, and

law. (Id. at ¶ 7).

B. Plan Investment Options

The Plan’s Investment Policy Statement established

guidelines for the selection, monitoring, and removal of

investment options, including identifying qualitative and

quantitative factors to consider. (Id. at ¶ 9). The RC was

advised during the Class Period by two independent investment

advisors with significant investment expertise: NFP

Retirement (“NFP”) until February 2016, and DiMeo Schneider

3

(“DiMeo”) from 2016 onward. (Doc. # 92-15 at 107-18). Before

each RC meeting, the Plan’s investment consultant distributed

materials containing detailed information regarding the

Plan’s investments and potential alternatives. (Id. at 117-

18). The consultant’s investment reviews contained a

scorecard that evaluated the Plan’s funds relative to their

benchmarks and peer groups across numerous criteria, and

identified any funds for the RC to “watch” or “discuss” based

on those factors. (Doc. # 92-5 at 17-78; Doc. # 92-6 at 1-

291). The scorecards consistently indicated that the Plan’s

investments had below-average fees relative to peers. (Id.).

Throughout the Class Period, the Plan offered

participants a broad range of investment strategies with

differing management styles and risk-return characteristics.

(Doc. # 92-17 at 13-14).

C. Plan Recordkeeping Costs

In 2015, NFP assisted the RC in conducting a Request for

Proposal (“RFP”) for the Plan’s recordkeeping services. (Doc.

# 92-2 at ¶ 22). The 2015 RFP was issued to six recordkeepers

with experience with MEPs, and it consisted of hundreds of

questions examining, among other things, each vendor’s

relevant experience, structure and organization, systems,

4

capacity for growth, account management plan, technological

services, personnel, data security and risk management,

participant disclosures, and communications and education.

(Id. at ¶¶ 22-23; Doc. # 92-10 at 13-87). In addition to the

six to which it issued the 2015 RFP, the RC also approached

other large recordkeepers, including Fidelity and Vanguard;

however, they were not interested in submitting a response.

(Doc. # 92-2 at ¶ 22).

Three recordkeepers (MassMutual, Transamerica, and Voya)

responded to the 2015 RFP. (Id. at ¶¶ 23-24). The other three

recordkeepers declined because they were either unable to

meet the pre-established minimum bid requirements or had

capacity concerns. (Id. at ¶ 25). The RC chose MassMutual,

which submitted the lowest price quote of the three responding

recordkeepers, and negotiated a further price reduction

before retaining its services. (Id. at ¶¶ 25–26).

In 2018, DiMeo assisted the RC in issuing a Request for

Information (“RFI”) for the plan’s recordkeeping services to

the three prior responding vendors (MassMutual, Transamerica,

and Voya). (Id. at ¶ 27). DiMeo and the RC evaluated the

responses based on numerous criteria, including pricing. (Id.

at ¶ 28). Again, MassMutual provided the lowest price and the

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RC concluded that the existing structure with MassMutual as

the recordkeeper was “working well.” (Id. at ¶ 29).

In 2021, DiMeo once again assisted the RC in issuing an

RFP for the Plan’s recordkeeping services. (Id. at ¶ 30).

DiMeo issued the 2021 RFP to four recordkeepers: Empower

(which had acquired MassMutual’s recordkeeping business),

Transamerica, Voya, and Northwest Plan Services. (Id.). The

2021 RFP solicited information on each recordkeeper’s

organization, capabilities, services, and fees. (Id. at ¶ 31;

Doc. # 92-12 at 53-61). The two finalists, Empower and

Transamerica, provide nearly identical price quotes. (Doc. #

92-12 at 82). The results of the 2021 RFP were discussed at

the February, August, September, and October 2021 board

meetings. (Doc. # 96-2 at 29-31, 36-41).

As a result of the 2021 RFP, the RC consolidated the

recordkeeping services for TriNet III and the Plan, securing

Empower as the vendor for both. (Id. at 41). The consolidation

resulted in a fee reduction for the Plan. (Doc. # 92-2 at ¶¶

32–33).

In the intervals between the 2015 RFP, 2018 RFI, and

2021 RFP, DiMeo regularly reviewed the Plan’s recordkeeping

arrangement and presented the RC with information regarding

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the recordkeeping costs of other plans. (Id. at ¶ 34; Doc. #

92-13 at 1-39).

D. Expert Testimony

1. Defendants’ Experts

Defendants offer the testimony of three experts: Steven

Case, Dr. Jennifer Conrad, and Peter Swisher. Mr. Case is a

former investment consultant, who opined that the RC’s

processes for monitoring the Plan’s investment options and

recordkeeping expenses were “consistent with best fiduciary

practices.” (Doc. # 92-16 at 10). Dr. Conrad, a tenured

professor of finance at the Kenan-Flagler Business School,

University of North Carolina at Chapel Hill, explained that

(1) fees of index funds “are not meaningful benchmarks for

actively managed funds’ fees,” and (2) that it is appropriate

to include actively-managed options in retirement plans

because research indicates that active management produces

superior results in certain market conditions. (Doc. # 92-17

at 12-25).

Mr. Swisher, an expert in MEPs with nearly ten years’

experience administering and selecting recordkeepers for a

large MEP, opined that the RC followed best practices in

conducting competitive bidding through the 2015 RFP, 2018

7

RFI, and 2021 RFP. (Doc. # 92-18 at 11-13). He further noted

that recordkeeping fees for single-employer plans are not

comparable to those for MEPs. (Id. at 40, 52). Mr. Swisher

explained that the Plan includes well over 1,000 distinct

participating employers and most recordkeeping services for

an MEP must be performed on an employer-by-employer basis.

(Id. at 51-53). The process of onboarding new client employers

“is a substantial cost for MEP recordkeepers” and the Plan

onboards ten to twenty new employers per month. (Id. at 41-

42, 51-52; Doc. # 92-13 at 37). He added that IRS regulations

governing MEPs require each participating employer to be

treated separately for purposes of tests related to non-

discrimination, top-heaviness, participation and coverage,

and highly compensated employees. (Doc. # 92-18 at 15-17, 45-

47). Finally, Mr. Swisher determined that, based on the data

utilized by Plaintiffs’ expert, the TriNet Plans paid some of

the lowest recordkeeping fees of any MEP in the market, and

noted that all MEPs paid more than $30 per participant. (Id.

at 62-65).

2. Plaintiffs’ Expert

Plaintiffs offer the testimony of Frances Vitagliano as

to the reasonableness of the Plan’s recordkeeping fees. (Doc.

8

# 92-19 at 23:3–24:1). Mr. Vitagliano has “35 years of

experience in the record keeping and administration business

and the related asset management processing.” (Id. at 134).

In approximately 1980, he established an MEP, the National

Pension Group (“NPG”) and worked closely with his co-founder

“in the design, implementation and pricing of the record

keeping system used to record keep and administer the NPG

MEP.” (Id. at 137). NGP closed at some point in the 1980s.

(Id. at 77:15-17). While he has experience responding to RFPs

for vendor services from his role as Vice President of State

Street Bank and Trust in the late 1980s (Id. at 135), Mr.

Vitagliano admitted that he does not have experience issuing

RFPs or evaluating responsive bids. (Id. at 51:23–53:2).

In this case, he relied on his experience and considered

a (1) 1998 consultant study submitted to the Department of

Labor, (2) a survey of eight government plans for the State

of North Carolina, and (3) the recordkeeping expenses he

calculated for two single-employer plans: Federal Thrift

Savings Plan (5 million participants) and the Mallinckrodt

Pharmaceuticals Retirement Savings and Investment Plan (5,362

participants), and one multi-employer plan, Amalgamated

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Transit Union National 401(k) Pension Plan (17,000

participants). (Id. at 145-148).

Mr. Vitagliano reached the following conclusions:

(1) The Plan’s recordkeeping fees were

unreasonable because they exceeded $30 per

participant (plus $3 to $6 in additional

“administrative” fees), which is the

reasonable rate for both the TriNet III and

TriNet IV Plans.

(2) The RC and its consultants were “imprudent and

likely negligent” when they conducted the 2015

RFP for recordkeeping services.

(Id. at 138, 228). Mr. Vitagliano based his reasonable fee

conclusion on his review of the aforementioned documents.

(Doc. # 92-19 at 145-48). With respect to the 2015 RFP, he

concluded that it was imprudent because it did not include

any “independent” or “unbundled” recordkeepers. (Id. at 16).

E. Procedural History

Plaintiffs initiated this action on September 29, 2020,

(Doc. # 1) and filed an amended complaint on August 20, 2021.

(Doc. # 23). Defendants filed their answer to the amended

complaint on January 24, 2022. (Doc. # 54).

Now, Defendants seeks final summary judgment in their

favor. (Doc. # 92). Additionally, Defendants filed a Daubert

motion to exclude the expert report and testimony of Mr.

Vitagliano. (Doc. # 93). Plaintiffs responded to both

10

Motions. (Doc. ## 98, 100). Defendants replied. (Doc. # 103).

The Motions are ripe for review.

II. Legal Standard

A. Daubert Motion

Federal Rule of Evidence 702 states:

A witness who is qualified as an expert by

knowledge, skill, experience, training, or

education may testify in the form of an opinion or

otherwise if: (a) the expert’s scientific,

technical, or other specialized knowledge will help

the trier of fact to understand the evidence or to

determine a fact in issue; (b) the testimony is

based on sufficient facts or data; (c) the

testimony is the product of reliable principles and

methods; and (d) the expert has reliably applied

the principles and methods to the facts of the case.

Fed. R. Evid. 702.

Implementing Rule 702, Daubert v. Merrell Dow

Pharmaceuticals, Inc., 509 U.S. 579 (1993), requires district

courts to ensure that any and all scientific testimony or

evidence admitted is both relevant and reliable. See Id. at

589–90. The Daubert analysis also applies to non-scientific

expert testimony. Kumho Tire Co. v. Carmichael, 526 U.S. 137,

147 (1999). District courts must conduct this gatekeeping

function “to ensure that speculative, unreliable expert

testimony does not reach the jury under the mantle of

reliability that accompanies the appellation ‘expert

11

testimony.’” Rink v. Cheminova, Inc., 400 F.3d 1286, 1291

(11th Cir. 2005). The Eleventh Circuit “requires trial courts

acting as gatekeepers to engage in a ‘rigorous three-part

inquiry.’” Hendrix v. Evenflo Co., 609 F.3d 1183, 1194 (11th

Cir. 2010).

The district court must assess whether:

(1) the expert is qualified to testify competently

regarding the matters he intends to address; (2)

the methodology by which the expert reaches his

conclusions is sufficiently reliable as determined

by the sort of inquiry mandated in Daubert; and (3)

the testimony assists the trier of fact, through

the application of scientific, technical, or

specialized expertise, to understand the evidence

or to determine a fact in issue.

Id. The proponent of the expert testimony bears the burden of

showing, by a preponderance of the evidence, that the

testimony satisfies each of these requirements. Id.

B. Summary Judgment

Summary judgment is appropriate “if the movant shows

that there is no genuine dispute as to any material fact and

the movant is entitled to judgment as a matter of law.” Fed.

R. Civ. P. 56(a). A factual dispute alone is not enough to

defeat a properly pled motion for summary judgment; only the

existence of a genuine issue of material fact will preclude

12

a grant of summary judgment. Anderson v. Liberty Lobby, Inc.,

477 U.S. 242, 247–48 (1986).

An issue is genuine if the evidence is such that a

reasonable jury could return a verdict for the non-moving

party. Mize v. Jefferson City Bd. of Educ., 93 F.3d 739, 742

(11th Cir. 1996)(citing Hairston v. Gainesville Sun Publ’g

Co., 9 F.3d 913, 918 (11th Cir. 1993)). A fact is material if

it may affect the outcome of the suit under the governing

law. Allen v. Tyson Foods, Inc., 121 F.3d 642, 646 (11th Cir.

1997). The moving party bears the initial burden of showing

the court, by reference to materials on file, that there are

no genuine issues of material fact that should be decided at

trial. Hickson Corp. v. N. Crossarm Co., 357 F.3d 1256, 1260

(11th Cir. 2004)(citing Celotex Corp. v. Catrett, 477 U.S.

317, 323 (1986)). “When a moving party has discharged its

burden, the non-moving party must then ‘go beyond the

pleadings,’ and by its own affidavits, or by ‘depositions,

answers to interrogatories, and admissions on file,’

designate specific facts showing that there is a genuine issue

for trial.” Jeffery v. Sarasota White Sox, Inc., 64 F.3d 590,

593–94 (11th Cir. 1995) (quoting Celotex, 477 U.S. at 324).

13

If there is a conflict between the parties’ allegations

or evidence, the non-moving party’s evidence is presumed to

be true and all reasonable inferences must be drawn in the

non-moving party’s favor. Shotz v. City of Plantation, 344

F.3d 1161, 1164 (11th Cir. 2003). If a reasonable fact finder

evaluating the evidence could draw more than one inference

from the facts, and if that inference introduces a genuine

issue of material fact, the court should not grant summary

judgment. Samples ex rel. Samples v. City of Atlanta, 846

F.2d 1328, 1330 (11th Cir. 1988). But, if the non-movant’s

response consists of nothing “more than a repetition of his

conclusional allegations,” summary judgment is not only

proper, but required. Morris v. Ross, 663 F.2d 1032, 1034

(11th Cir. 1981).

III. Analysis

A. Daubert Motion

Defendants seeks to exclude Mr. Vitagliano’s expert

testimony on the grounds that it meets neither the

qualification nor reliability requirements of Rule 702. (Doc.

# 93 at 1-4).

During his deposition, Mr. Vitagliano made several

statements that Defendants contend undermined his

14

qualifications, methodology, and final conclusions. First, he

admitted that he did not compare the Plan’s fees to those of

any other MEP. (Id. at 111:14–20). Mr. Vitagliano

acknowledged that most of the plans he considered in deriving

his reasonable recordkeeping fee were not similar in size or

structure to the Plan. See (Doc. # 92-19 at 228:10–230:6,

236:4–237:4, 239:14–243:5, 246:18–248:18) (admitting that the

Thrift Savings Plan, Amalgamated plan, and Mallinckrodt plans

were not comparable to the Plan). He also stated that he did

not consider the size or type of plans when he chose to

include in his report the North Carolina plans and that he

did not know how many participants each plan had. (Id. at

236:4–237:4, 239:14–243:5).

He further agreed that an MEP would have higher

recordkeeping costs than a single-employer plan of the same

size, (Id. at 192:14–25), because there are significant

differences in the administrative costs incurred by a

recordkeeper and plan administrator in administering a

single-employer plan, as opposed to a multiple employer plan.

(Id. at 243:15–21, 191:24–193:8, 204:9–206:25). He also

explained that multiemployer plans, such as the Amalgamated

plan, differ from MEPs because multiemployer plans are union

15

plans subject to less burdensome regulations than MEPs and,

thus, he “would expect the cost of recordkeeping and

administration for [the Plan] to be greater than the [cost]

of the Amalgamated [plan].” (Id. at 235:12–237:4, 241:14–18).

Second, Mr. Vitagliano recognized that he “did not

undertake an analysis of the costs incurred by . . .

MassMutual in servicing [the Plan].” (Id. at 224:4-10). He

acknowledged that an MEP recordkeeper undertakes “quite a bit

of work” to onboard and terminate employers, but he did not

attempt to calculate MassMutual’s onboarding or termination

costs. (Id. at 122:20–127:8, 146:25–150:12, 153:2–157:24,

181:2–182:4).

Third, Mr. Vitagliano conceded that, with regard to the

2015 RFP, the Defendants solicited bids from at least one

unbundled recordkeeper and acknowledged that TriNet was “not

at all” at fault for the “very reasonable and rational”

decision of that vendor not to bid. (Id. at 258:4-20, 268:2–

13). He further did not identify any other recordkeepers to

which the Defendants should have sent the RFP. (Id. at 258:13-

20). Indeed, Mr. Vitagliano admitted that he himself was not

“up on” the current recordkeeper market and instead would

“depend upon the . . . expertise in that area” of a

16

specialized recordkeeping consultant, Siegel company. (Id. at

260:21-261:1). He went on to state the following:

Q. So you don’t know whether there were more than

three vendors in the marketplace that could have

even responded to the RFP, correct?

A. That is correct. I would leave that up to the

experts who spent their entire lives just in the

recordkeeping field for multiple and multiemployer

plans.

Q. And that’s not within your area of expertise,

correct?

A. I’m on the providing of services rather than

surveying other competitors of them.

(Id. at 263:10–264:3) (emphasis added).

1. Qualifications

The first question under Daubert is whether Mr.

Vitagliano is qualified to testify competently regarding the

matters he intends to address. City of Tuscaloosa v. Harcros

Chems., Inc., 158 F.3d 548, 563 (11th Cir. 1998). An expert

may be qualified “by knowledge, skill, experience, training,

or education.” Fed. R. Evid. 702. “Determining whether a

witness is qualified to testify as an expert ‘requires the

trial court to examine the credentials of the proposed expert

in light of the subject matter of the proposed testimony.’”

Clena Invs., Inc. v. XL Specialty Ins. Co., 280 F.R.D. 653,

661 (S.D. Fla. 2012) (quoting Jack v. Glaxo Wellcome, Inc.,

239 F. Supp. 2d 1308, 1314–16 (N.D. Ga. 2002)).

17

“This inquiry is not stringent, and so long as the expert

is minimally qualified, objections to the level of the

expert’s expertise [go] to credibility and weight, not

admissibility.” Id. (citations and internal quotation marks

omitted). The Court is aware that its “gatekeeper role under

Daubert ‘is not intended to supplant the adversary system or

the role of the jury.’” Maiz v. Virani, 253 F.3d 641, 666

(11th Cir. 2001) (quoting Allison v. McGhan, 184 F.3d 1300,

1311 (11th Cir. 1999)). “Courts must also be mindful that

‘[e]xpertise in one field does not qualify a witness to

testify about others.’” Easterwood v. Husqvarna Pro. Prod.,

Inc., 576 F. Supp. 3d 950, 958 (M.D. Ala. 2021) (quoting

Lebron v. Sec’y of Fla. Dep’t of Children & Families, 772

F.3d 1352, 1368 (11th Cir. 2014)).

Defendants contend that Mr. Vitagliano is not qualified

to opine on the 2015 RFP process because he does not have the

necessary knowledge or experience. (Doc. # 93 at 20-21).

Defendants note that Mr. Vitagliano stated during his

deposition that he would ask a consultant that was “intimately

knowledgeable about multi and multiple employer plans” to

determine which recordkeepers should have received the 2015

RFP. (Id. at 21) (quoting Doc. # 92-19 at 258:21–259:12,

18

260:21–261:1). They also point to his statement that he “would

leave that up to the experts” when asked whether there were

any other recordkeepers that could have responded to the RFP.

(Doc. # 93 at 21) (quoting Doc. # 92-19 at 263:10–264:3).

In response, Plaintiffs argue that Mr. Vitagliano is

qualified to opine that NFP, the consultant on which

Defendants relied for the 2015 RFP process, was unqualified.

(Doc. # 100 at 17) (citing Doc. # 92-19 at 259:2-8). They

further contend that Mr. Vitagliano opined that the 2018 RFI

and the 2021 RFP were also deficient. (Id. at 7-8). According

to Plaintiffs, he also alternatively concluded that the 2015

RFP process was flawed because NFP was an unqualified

consultant. (Id. at 17).

First, though Plaintiffs contend otherwise, Mr.

Vitagliano stated specifically that he did not offer an

opinion as to the 2018 RFI or 2021 RFP. (Doc. # 92-19 at

252:7–10). He also expressly stated during his deposition

that he was not offering an opinion on NFP’s qualifications:

Q. So are you expressing an opinion that NFP was

not qualified to run this RFP process?

A. I’m expressing an opinion that NFP’s strength

lay in investment management, that NFP itself paid

significantly less for its own recordkeeping fees,

and I didn’t find any of their publicly presented

individuals and experts having any extensive

background in recordkeeping itself.

19

Q. But what’s the answer to my question? Are you

expressing an opinion that they were unqualified to

run this RFP process, yes or no?

A. I’m not in a position to make that final decision

on that. I have not interviewed them, I have not

gone into them, and before I’d make a statement

like that I’d like to go into dramatically more

detail with them and meet them individually.

(Id. at 253:13-254:3).

Second, as to the 2015 RFP process, the Court finds that

Mr. Vitagliano is not qualified to testify competently. Mr.

Vitagliano himself readily admitted that he would have to

rely on the expertise of a consultant to determine how the

Defendants could have improved the RFP process. He further

stated that his experience was in the “providing of services”

— not in conducting an RFP process. (Doc. # 92-19 at 263:10–

264:3). Plaintiffs’ response attempts to evade the underlying

issue of his qualifications. Instead they argue that “he has

experience with RFPs and he is more than qualified to offer

this opinion” on the consultant, NFP. (Doc. # 100 at 17). The

Court, however, is not persuaded by this argument, as Mr.

Vitagliano expressly disclaimed any opinion on the

qualifications of NFP to conduct the RFP process. (Doc. # 92-

19 at 253:21-254:13).

The bottom line is that, despite his experience in other

areas within this field, Mr. Vitagliano has never conducted

20

an RFP, has not responded to an RFP in nearly forty years,

and acknowledged that he would need to rely on a consultant

to determine the best way to conduct the process. See Griffin

v. Coffee Cnty., 608 F. Supp. 3d 1363, 1370 (S.D. Ga. 2022)

(finding forensic pathologist unqualified to opine on

treatment of methamphetamine overdose because expert had not

treated emergent patients in forty years and acknowledged he

would defer to an emergency room physician regarding the

course of treatment); Parc at Duluth, LLC v. Cintas Corp. No.

2, No. 1:10-CV-2752-RWS, 2012 WL 113650, at *3 (N.D. Ga. Jan.

13, 2012) (barring fire-protection engineer from opining on

the standards of an annual sprinkler system inspection

because expert had not performed such an inspection). Because

Mr. Vitagliano’s qualifications do not fit with the topic of

his opinion, his testimony with respect to the 2015 RFP is

barred.

2. Reliability

The Court must also assess whether the expert’s

methodology is reliable. “Exactly how reliability is

evaluated may vary from case to case, but what remains

constant is the requirement that the trial judge evaluate the

reliability of the testimony before allowing its admission at

21

trial.” Frazier, 387 F.3d 1244, 1262 (11th Cir. 2004) (citing

Fed. R. Evid. 702, Advisory Committee Notes (2000)). There

are four recognized, yet non-exhaustive, factors a district

court may consider in evaluating reliability:

(1) whether the expert’s methodology has been

tested or is capable of being tested; (2) whether

the technique has been subjected to peer review and

publication; (3) the known and potential error rate

of the methodology; and (4) whether the technique

has been generally accepted in the proper

scientific community.

Seamon v. Remington Arms Co., 813 F.3d 983, 988 (11th Cir.

2016) (citations omitted). A district court can take other

relevant factors into account as well. Id. (citations

omitted).

“If the [expert] witness is relying solely or primarily

on experience, then,” in establishing reliability, “the

witness must explain how that experience leads to the

conclusion reached, why that experience is a sufficient basis

for the opinion, and how that experience is reliably applied

to the facts.” Frazier, 387 F.3d at 1261 (citation and

internal quotation marks omitted). “[A] trial court may

exclude expert testimony . . . whose factual basis is not

adequately explained.” Cook ex rel. Est. of Tessier v. Sheriff

of Monroe Cnty., Fla., 402 F.3d 1092, 1111 (11th Cir. 2005).

22

Expert opinions must have “a traceable, analytical basis

in objective fact.” Bragdon v. Abbott, 524 U.S. 624, 653

(1998). “[N]othing in either Daubert or the Federal Rules of

Evidence requires a district court to admit opinion evidence

that is connected to existing data only by the ipse dixit of

the expert. A court may conclude that there is simply too

great an analytical gap between the data and the opinion

proffered.” Gen. Elec. Co. v. Joiner, 522 U.S. 136, 146

(1997).

Defendants argue that Mr. Vitagliano’s opinion as to the

reasonableness of the Plan’s recordkeeping fees is not based

on any methodology or, at the very least, not on a reliable

one. (Doc. # 93 at 10-15). Specifically, Defendants contend

that he has not articulated his method for how he arrived at

his reasonable recordkeeping fee of $30 per participant (with

$3-6 in administrative fees). (Id. at 10-11). They also argue

that the comparator plans referenced in Mr. Vitagliano’s

report are not, in fact, comparable to the Plan and that Mr.

Vitagliano admitted as much during his deposition. (Id. at

11-13).

Plaintiffs respond that Mr. Vitagliano did articulate

his method of generating his reasonable fee: he relied on his

23

experience and considered the comparator plans referenced in

his report. (Doc. # 100 at 11-12). Further, they contend that

Mr. Vitagliano chose his referenced comparator plans based on

the size of those plans and “factor[ed] in the different sizes

of these mega plans to calculate how much the Plans’

recordkeeping fees would have cost if they also used per-

participant fees[.]” (Id. at 12). Plaintiffs contend that

size was the most important factor he relied on in determining

the reasonable recordkeeping fees for a given plan. See (Id.

at 12) (“[I]t’s clear from Vitagliano’s report that he

purposely chose mega sized plans like TriNets’ Plans to

calculate how plans of similar sizes used per participant

fees and economy of scale to negotiate lower fees.”).

The Court agrees with Defendants: Mr. Vitagliano has not

satisfactorily explained his methodology. Mr. Vitagliano does

not detail how his knowledge and experience led him to

calculate the fees for the relevant time period, or why those

numbers are reasonable in light of any features of the Plan.

Without more, this conclusory statement of applied knowledge

of the industry’s practices is insufficient under Rule 702

because “‘general references’ to an expert’s ‘experience’ do

not provide a reliable basis for his proposed testimony.”

24

Cunningham v. Cornell Univ., No. 16-CV-6525 (PKC), 2019 WL

4735876, at *9 (S.D.N.Y. Sept. 27, 2019); see also, Hughes v.

Kia Motors Corp., 766 F.3d 1317, 1329 (11th Cir. 2014)

(affirming district court’s decision to bar expert’s

testimony where expert “had based his opinion on experience”

but “never explained how his experience or the relevant texts

supported his opinion”). “The trial court’s gatekeeping

function requires more than simply taking the expert’s word

for it.” Fed. R. Evid. 702, advisory committee’s note, 2000

amendment (internal quotation marks omitted).

The Court finds persuasive the reasoning articulated in

Cunningham. In Cunningham, the court found unreliable an

expert witness’s method of determining the reasonable

recordkeeping fees a pension plan could have secured. Id. The

expert testified that he generated the fee estimate by relying

on his “experience . . . in the marketplace” working for a

firm that generated RFPs and his evaluation of the relevant

case documents. Id. The court found that this generalized

reference to his experience did not provide a reliable basis

for his proposed testimony. Id.

Like the expert in Cunningham, Mr. Vitagliano has not

sufficiently explained his methodology beyond general

25

references to his experience and his review of several

studies. Mr. Vitagliano’s experience alone is insufficient to

support his opinion. “[I]f an expert is relying solely on or

primarily on his experience, then he must explain how that

experience leads to the conclusion reached, why that

experience is a sufficient basis for the opinion, and how

that experience is reliably applied to the facts.” Frazier,

387 F.3d at 1261. Here, Mr. Vitagliano does not indicate a

single plan in his experience with $30 per participant fees

for similar services, he does not explain how his experience

helped him determine a reasonable fee, and he has very little

experience setting recordkeeping prices in the first place.

See Ramos v. Banner Health, 461 F. Supp. 3d 1067, 1134 (D.

Colo. 2020) (“The Court declines to rely on [plaintiffs’

expert]’s testimony as to the reasonable annual ranges of

recordkeeping fees because his opinion is based on vague and

insufficient references to his experience in the 401(k) plan

industry.”), aff’d, 1 F.4th 769 (10th Cir. 2021); Sacerdote

v. N.Y. Univ., 328 F. Supp. 3d 273, 283 n.19 (S.D.N.Y. 2018)

(concluding plaintiffs’ expert “lacked the particular

expertise necessary to provide useful opinions to the Court”

26

because he had “virtually no experience with” the type of

retirement plans at issue).

Further, the comparator plans included in Mr.

Vitagliano’s report cannot support his conclusion. As in

Cunningham, he offers no rationale in his report for why or

how the comparator plans were selected. In fact, he

acknowledged that at least one of the plans was not even meant

to be a comparator, but instead was intended to show the low

end of possible recordkeeping fees. See (Doc. # 92-19 at

228:23-229:1) (“I put the Federal Thrift Savings Plan in

purely to show the absolute lower bounds that one would not

ever expect a plan to go below for expenses and what have

you.”). He offers no explanation for how he arrived at his

$30 reasonable fee or how he decided to tack on $3-6 in

administrative fees, and he makes no attempt to tie these

numbers to the fees for the comparator plans listed in his

report.

Plaintiffs’ post hoc reasoning for Mr. Vitagliano’s

chosen comparator plans is also unavailing. Plaintiffs state

that Mr. Vitagliano chose plans of similar size as comparators

and “factor[ed] in the different sizes” between the plans to

generate his fee estimate. (Doc. # 100 at 12). The Court is

27

not persuaded that Plaintiffs’ explanation indicates a

reliable methodology.

First, Mr. Vitagliano did not explain in either his

report or deposition why he picked these comparator plans. To

the contrary, he acknowledged during his deposition that many

of the plans listed in his report are not comparable in size

or type to the Plan. See (Doc. # 92-19 at 228:10–230:6, 236:4–

237:4, 239:14–243:5, 246:18–248:18) (admitting that the

Thrift Savings Plan, Amalgamated plan, and Mallinckrodt plans

were not comparable to the Plan); see also (Id. at 236:4–

237:4, 239:14–243:5) (acknowledging that he did not consider

the size or type of plans when he chose to include in his

report the North Carolina plans).

Second, if the Court accepted that Mr. Vitagliano simply

“considered” these comparator plans to generate his

reasonable fee estimate, this explanation alone is

insufficient to constitute a reliable methodology. Other

courts in this circuit have excluded experts under similar

circumstances to the ones present here. See generally Pledger

v. Reliance Tr. Co., No. 1:15-CV-4444-MHC, 2019 WL 4439606,

(N.D. Ga. Feb. 25, 2019). In Pledger, the court barred the

testimony of the plaintiffs’ expert, who opined on the

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reasonableness of the recordkeeping fee charged by the

retirement plan at issue. Id. at *15. There, the court found

that the expert, who had decades of experience in the

recordkeeping industry, had not utilized a reliable

methodology in determining a reasonable fee for the plan. Id.

at *16. The expert did not “use any pricing model from any

recordkeepers when performing his analysis” and did not rely

on pricing databases or “any objective source of pricing

information from a third party.” Id. Instead he relied on a

fifteen-year-old table noting the fees for plans a fraction

of the size of the plan at issue and the data from several

Form 5500s with fees that did not support his fee estimate.

Id. at 18.

Here, the Court faces a nearly identical scenario. Mr.

Vitagliano purports to have “considered” the recordkeeping

fees of several plans incomparable in size and structure to

the Plan and relied on his experience to determine what a

reasonable fee should have been. Such a methodology is

insufficient to support his opinion. See Id. (“The Court

agrees with Defendants that in short, [the expert] contends

that he is a walking benchmark and is able to conjure the

29

exact dollar figures the Plan allegedly should have paid. .

. . This evidence is inadmissible.”).

Finally, Mr. Vitagliano did not compare the Plan to any

other MEPs, instead relying on single and multiemployer plans

as comparators – despite recognizing that such plans are not,

in fact, comparable to MEPs. Mr. Vitagliano stated that there

are “significant differences in the administrative costs

incurred by a recordkeeper and plan administrator in

administering a single employer plan, as opposed to a multiple

employer plan.” (Doc. # 92-19 at 243:15–21). He also admitted

that a single employer of comparable size to an MEP would

have lower recordkeeping fees – undercutting Plaintiffs’

contention that the size of the plans is the only relevant

variable. See (Id. at 192:14-25) (“Q. And you would also

expect a multiple employer plan with a certain number of

participating employers to have higher recordkeeping and

administrative fees than a single employer plan; is that

correct? A. Single employer plan of the same number of

participants, yes.”). According to Mr. Vitagliano,

multiemployer plans should also have lower fees than MEPs.

(Id. at 235:12–237:4, 241:14–18).

30

Mr. Vitagliano has not demonstrated that his methodology

is reliable, and his testimony is excluded. Therefore,

Defendants’ Daubert Motion is granted.

B. Defendants’ Motion for Summary Judgment

In their amended complaint, Plaintiffs base their claims

for breach of fiduciary duty on two theories: (1) that

Defendants imprudently selected underperforming, high-cost

investment options and (2) that Defendants caused the Plan

participants to pay excessive recordkeeping fees. The Court

will address each theory in turn.

1. Plaintiffs’ Recordkeeping Fee Theories

First, Defendants seek summary judgment as to

Plaintiffs’ recordkeeping fee theories. (Doc. # 92 at 20-25).

They argue that they have demonstrated that the RC diligently

monitored the Plan’s recordkeeping costs and that Plaintiffs

cannot meet their burden of demonstrating that the Plan’s

recordkeeping costs were excessive. (Id.). In their response,

Plaintiffs rely solely on Mr. Vitagliano’s report to

demonstrate that the 2015 RFP, 2018 RFI, and 2021 RFP

processes were flawed and that the recordkeeping costs were

excessive. (Doc. # 98).

31

Under ERISA, a plan fiduciary is required to meet a

standard of “prudence” in administering the plan holding the

participant’s retirement assets in a defined contribution

plan. 29 U.S.C. § 1104(a)(1)(B) (requiring fiduciaries to

discharge their 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”).

“An ERISA fiduciary’s duty is derived from the common

law of trusts.” Tibble v. Edison Int’l, 575 U.S. 523, 528

(2015). Fiduciaries must prudently select third-party service

providers and can be subject to liability if they do not

reasonably monitor the fees charged and such fees are

excessive. Pizarro v. Home Depot, Inc., --- F. Supp. 3d ---,

2022 WL 4687096, at *14 (N.D. Ga. Sept. 30, 2022) (citation

omitted). ERISA empowers a plan participant or beneficiary to

sue plan fiduciaries for breach of fiduciary duties. 29 U.S.C.

§ 1132(a)(2).

To succeed on their claims for breach of fiduciary duty

under ERISA, Plaintiffs must prove that (1) Defendants acted

as fiduciaries, (2) Defendants breached their fiduciary

32

duties, and (3) the breaches proximately caused a loss to the

Plan. Solis v. Seibert, No. 8:09-cv-1726-VMC-AEP, 2011 WL

398023, at *4 (M.D. Fla. Feb. 4, 2011), aff’d, 464 F. App’x

820 (11th Cir. 2012). Because of the proximate causation

requirement, fiduciaries are not liable under ERISA where

their actions — “although a breach of [their] fiduciary duty

— did not cause the loss to the Fund.” Perez v. DSI

Contracting, Inc., No. 1:14-CV-282-LMM, 2015 WL 12618779, at

*5 (N.D. Ga. July 24, 2015) (quoting Ironworkers Local No.

272 v. Bowen, 695 F.2d 531, 536 (11th Cir. 1983)). The only

elements at issue here are breach and loss causation.

Plaintiffs have not put forth any evidence demonstrating

that Defendants breached their fiduciary duties. In fact, the

undisputed record evidence shows the opposite. The RC

monitored the Plan’s recordkeeping fees, conducting three

competitive searches for recordkeepers during the Class

Period and conducting regular benchmarking exercises in the

interim. (Doc. # 92-2 at ¶¶ 22, 27, 30, 34). The 2015 RFP and

the 2021 RFP resulted in price negotiations that reduced the

per participant recordkeeping fees. (Id. at ¶¶ 25-26, 32-33);

see also Johnson v. PNC Fin. Servs. Grp., Inc., 2021 WL

3417843, at *4 (W.D. Pa. Aug. 3, 2021) (“[T]he fact that the

33

Plan’s recordkeeping fees trend downward for the period at

issue points in the direction of prudence rather than

imprudence.”). This Court joins the refrain of other district

courts that have found evidence of regular, competitive

searches compelling evidence that there was no breach of

fiduciary duty. See, e.g., Marshall v. Northrop Grumman

Corp., 2019 WL 4058583, at *11 (C.D. Cal. Aug. 14, 2019)

(granting summary judgment to defendants on recordkeeping

fees claim where defendants engaged in RFP); Ramos, 461 F.

Supp. 3d at 1101 (finding fiduciary committee prudently

managed its recordkeepers because it ran regular RFP

processes); Sacerdote v. N.Y. Univ., 328 F. Supp. 3d 273, 293

(S.D.N.Y. 2018) (same); Cryer v. Franklin Res., Inc., 2018 WL

6267856, at *10–11 (N.D. Cal. Nov. 16, 2018) (same).

Even if Plaintiffs had adduced evidence of a breach of

fiduciary duty, they have no evidence of loss causation.

Plaintiffs have not offered specific facts showing that the

Plan’s recordkeeping costs were excessive. Again, the only

evidence to which they cite is Mr. Vitagliano’s report, which

the Court will not consider. Indeed, the only evidence

regarding the reasonableness of the recordkeeping fees comes

from Defendants’ expert, Mr. Swisher, who concludes that the

34

Plan paid some of the lowest recordkeeping fees of any MEP in

the market, and noted that all MEPs paid more than $30 per

participant. (Doc. # 92-18 at 62-65).

Even if the Court did consider Mr. Vitagliano’s report,

it still would reach the same conclusion, as Mr. Vitagliano

did not analyze the specific services provided by MassMutual

– an element of the loss causation analysis that courts have

found necessary in cases such as this. See Albert v. Oshkosh

Corp., 47 F.4th 570, 580 (7th Cir. 2022) (holding that an

ERISA plaintiff failed to state a claim where the complaint

“failed to allege that the [recordkeeping] fees were

excessive relative to the services rendered”); Smith v.

CommonSpirit Health, 37 F.4th 1160, 1169 (6th Cir. 2022)

(same); Young v. General Motors Inv. Mgmt. Corp., 325 F. App’x

31, 33 (2d Cir. 2009) (same); Ramos, 461 F. Supp. 3d at 1132

(“A high fee alone does not mandate a conclusion that

recordkeeping fees are excessive; rather, fees must be

evaluated relative to the services rendered.”). At best,

Plaintiffs have demonstrated that a different type of

retirement plan could have paid lower recordkeeping fees for

a different package of services. This showing is insufficient

to avoid summary judgment.

35

Summary judgment is therefore granted to Defendants on

Plaintiffs’ recordkeeping fee theories.

2. Plaintiffs’ Investment Options Theories

Defendants also seek summary judgment on Plaintiffs’

claim that the RC employed an imprudent process in selecting

and monitoring the Plan’s investments, arguing that

Plaintiffs have adduced no evidence to that effect. (Doc. #

92 at 16-20). In their response, Plaintiffs “acknowledge that

they never submitted an expert report to calculate damages

with respect to its investment-related theories” and state

that they are not seeking damages with respect to their

investment-related theories. (Doc. # 98 at 20).

Plaintiffs have not met their burden to avoid summary

judgment on their investment-related claims. First, while

they “maintain Defendants did not follow a prudent process

for selecting and monitoring the Plan’s investment options,”

they did not cite to any facts that specifically controvert

those Defendants included in their statement of material

facts related to the investment selection process. (Id.).

Thus, the Court deems admitted all such facts. See (Doc. # 42

at 3) (“In deciding a motion for summary judgment, the Court

will deem admitted any fact in the statement of material facts

36

that the opposing party does not specifically controvert,

provided record evidence supports the moving party’s

statement.”).

Second, there is substantial evidence that Defendants

prudently monitored the Plan during the class period. The RC

regularly met, received detailed reports regarding the

performance of Plan investments, and discussed which funds

should be included in the Plan. (Doc. # 92-5 at 17-78; Doc.

# 92-6 at 1-291). Again, even if the evidence was not

indicative of prudence, Plaintiffs’ failure to present

evidence of a loss stemming from such alleged imprudence is

fatal to their claims. See Pizarro, 2022 WL 4687096, at *24

(granting summary judgment in favor of defendants where “even

assuming an imprudent monitoring process, Plaintiffs . . .

failed to marshal evidence of loss causation”). Likely for

this reason, Plaintiffs acknowledge they are not seeking

damages related to their investment claims.

Therefore, the Court grants summary judgment in favor of

Defendants as to Plaintiffs’ investment option theories.

37

Accordingly, it is now

ORDERED, ADJUDGED, and DECREED:

(1) Defendants’ Daubert Motion (Doc. # 93) 1s GRANTED. The

Court excludes Mr. Vitagliano’s testimony.

(2) Defendants’ Motion for Summary Judgment (Doc. # 92) is

GRANTED.

(3) The Clerk is directed to enter judgment in favor of

Defendants and against Plaintiffs.

(4) Thereafter, the Clerk is directed to terminate all

pending motions and deadlines and CLOSE the case.

DONE and ORDERED in Chambers in Tampa, Florida, this

25th day of April, 2023.

VIRGINIA M. HERNANDEZ’COVINGTON

UNITED STATES DISTRICT JUDGE

38