# Riley v. Olin Corporation

> District Court, E.D. Missouri · June 21, 2022

URL: https://www.frixlaw.com/law-library/cases/10242168

## Case

- **Court:** District Court, E.D. Missouri
- **Decided:** June 21, 2022
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/10242168

## How later opinions describe it (automated extraction)

- holding that the district court does not abuse its discretion in denying leave to amend when plaintiff raises the issue “with a one-line request in his brief opposing defendants’ motion to dismiss”
- holding that allegations defendant offered a “mixed” lineup of funds—where both lower-cost, institutional shares and identical, higher-cost retail shares are available for plan participants—state a breach-of- fiduciary-duty claim
- concluding Meiners failed to plead a meaningful benchmark by alleging only “that cheaper alternative investments with some similarities exist”

## Opinion text

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
MALIKA RILEY, et al., )
)
Plaintiff(s), )
)
v. ) Case No. 4:21-cv-01328-SRC
)
OLIN CORPORATION, et al., )
)
Defendant(s). )
)

Memorandum and Order
The Employee Retirement Income Security Act of 1974 imposes a duty of loyalty on
fiduciaries of certain investment plans. Malika Riley and Takeeya Sharonte Reliford participated
in one such plan through their employer, Olin Corporation. Believing that Olin Corporation,
Olin’s board, and the plan’s investment committee breached their fiduciary duties, Riley and
Reliford filed this class-action lawsuit. The Defendants move to dismiss the complaint against
them, arguing that the complaint’s allegations, even if true, fail to state a claim. The Court
agrees and grants the motion.
I. Background
For purposes of the motion to dismiss, the Court accepts as true the following well
pleaded facts. See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007).
Created in 1964 by the Olin Corporation, the “Olin Corporation Contributing Employee
Ownership Plan,” an “individual account plan” or “defined contribution plan” under ERISA, 29
U.S.C. § 1002(34), establishes various investment accounts for participating Olin Corporation
employees. Doc. 1 at ¶¶ 52–54. Olin and its board appointed an investment committee to serve
as the plan’s named fiduciary regarding investment and management of plan assets, while a
separate administrative committee serves as the plan’s administrator and as a named fiduciary in
all matters other than investment and management of plan assets. Id. at ¶¶ 33–43, 56–58. Voya
International Trust Company serves as the plan’s trustee and custodian for most of the plan’s
investments, and Voya International Plan Services keeps records for the plan. Id. at ¶¶ 59–60.

At the end of 2019, the plan held over $930,000,000 in net assets and had over 7,000
participants. Id. at ¶¶ 9, 46.
Plaintiffs Malika Riley and Takeeya Sharonte Reliford both participated in the plan
during their employment with Olin. Id. at ¶¶ 17–19. The complaint alleges in count 1 that the
investment committee breached its fiduciary duty of prudence and in count 2 that Olin and its
board failed to adequately monitor the investment committee. Id. at ¶¶ 112–25. In support of
count 1, the complaint contends that the investment committee failed to adequately monitor the
plan’s recordkeeping expenses, id. at ¶¶ 76–89, failed to prudently select investment options
because of excessive investment fees, id. at ¶¶ 90–107, and retained at least one underperforming
fund in the plan, id. at ¶¶ 108–11. Thus, alleges the complaint, “the totality of circumstances

demonstrate that the plan fiduciaries failed to administer the plan in a prudent manner.” Id. at p.
17.
In support of their specific contention that the investment committee fails to control the
plan’s “recordkeeping expenses,” “a catchall term for the suite of administrative services
typically provided to a defined contribution plan by the plan’s ‘recordkeeper,’” Riley and
Reliford make several allegations. Id. at ¶ 76. According to the complaint, “[r]ecordkeeping
expenses can either be paid directly from plan assets, or indirectly by the plan’s investments in a
practice known as revenue sharing.” Id. at ¶ 77. They say that the revenue-sharing fee model
selected by the investment committee allowed recordkeeping fees to balloon. Id. at ¶ 79.
According to the complaint, the plan paid $79.61, $138.17, $151.66, $137.06, $59.85, and
$44.06 per plan participant, per year, from 2015 to 2020, respectively. Id. at ¶ 81. The
complaint compares these “astronomical” fees to a survey conducted by NEPC, an investment
consulting firm, of 121 defined contribution plans. Id. at ¶¶ 81–83; see also Doc. 20-3. That

survey found that in 2018 “no plans with between 5,000 and 10,000 participants paid more than
$100 in per participant recordkeeping, trust and custody fees.” Id. at ¶ 84. The 121-plan sample
consisted of 71% corporate plans, 20% healthcare plans, and 9% not-for-profit and other plans,
with an average $1.1 billion in assets and 12,437 participants and with a median $512 million in
assets and 5,440 participants. Id. at ¶ 83. The complaint also claims that “some authorities”
recognize $35 per participant as the average amount large plans should pay in recordkeeping
fees. Id. at ¶ 85 & n.8. The complaint faults the investment committee for failing to conduct
regular requests for proposal to identify more economical recordkeepers and for failing to
leverage the plan’s significant assets to negotiate a better deal on recordkeeping costs. Id. at ¶¶
86–89.

Further supporting count 1, Riley and Reliford allege that many of the plan’s funds
charge excessive investment-management fees as, based on “the ICI median and ICI averages,”
“many of the [p]lan’s investments were significantly more expensive than comparable funds
found in similarly sized plans.” Id. at ¶¶ 90–92, 103–06. The complaint also alleges that “the
Defendants could not have engaged in a prudent process” because the plan maintained several T.
Rowe Price mutual funds despite the availability of cheaper, collective trust versions of the funds
(which the plan eventually switched to). Id. at ¶ 103.
Riley and Reliford also claim that from 2014 to 2020 the investment committee
imprudently retained at least one underperforming fund in the plan, the Eaton Vance Small/Mid
Cap fund. Id. at ¶ 108. To demonstrate this, Riley and Reliford compare the Eaton Vance
Small/Mid Cap fund’s expense ratio and average annual return with another fund, the NCTWX
Nicholas II I fund. Id. at ¶¶ 109–11. The comparison shows that the Eaton Vance fund had an
expense ratio of 0.82% compared to the Nicholas II I fund’s 0.60%. Id. at ¶ 109. As of June 30,

2020, the Eaton Vance fund’s one-year, three-year, and five-year average annual returns were
43.02%, 15.62%, and 16.10%, with benchmark relative performance of -0.60%, -6.51%, and -
4.16%, respectively. Id. On the other hand, as of June 30, 2020, the Nicholas II I fund’s one-
year, three-year, and five-year average annual returns were 37.56%, 17.34%, and 17.21%, with
benchmark relative performance of -6.06%, -4.79%, and -3.05%, respectively. Id.
In support of count 2, the complaint points both to the investment committee’s alleged
failures, as well as to Olin and its board’s obligation to monitor the investment committee. Id. at
¶¶ 119–125. Collectively, Riley and Reliford estimate that the Defendants’ alleged, unlawful
conduct has cost the plan millions of dollars. Id. at ¶ 12. The Defendants now move to dismiss
the complaint in its entirety, arguing that Riley and Reliford do not allege “meaningful

benchmarks” against which to evaluate the Defendant’s fiduciary process and do not allege facts
supporting an inference that the Defendants breached their fiduciary duties.
II. Standard
Under Rule 12(b)(6) of the Federal Rules of Civil Procedure, a party may move to
dismiss a claim for “failure to state a claim upon which relief can be granted.” The notice
pleading standard of Rule 8(a)(2) of the Federal Rules of Civil Procedure requires the plaintiffs
to give “a short and plain statement of the claim showing that the pleader is entitled to relief.”
To meet this standard and to survive a Rule 12(b)(6) 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.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal quotations and citation omitted).
This requirement of facial plausibility means the factual content of the plaintiffs’ allegations
must “allow[] the court to draw the reasonable inference that the defendant is liable for the
misconduct alleged.” Park Irmat Drug Corp. v. Express Scripts Holding Co., 911 F.3d 505, 512

(8th Cir. 2018) (quoting Iqbal, 556 U.S. at 678). The Court must grant all reasonable inferences
in favor of the nonmoving party. Lustgraaf v. Behrens, 619 F.3d 867, 872–73 (8th Cir. 2010).
Ordinarily, only the facts alleged in the complaint are considered for purposes of a motion to
dismiss; however, materials attached to the complaint may also be considered in construing its
sufficiency. Reynolds v. Dormire, 636 F.3d 976, 979 (8th Cir. 2011).
When ruling on a motion to dismiss, a court “must liberally construe a complaint in favor
of the plaintiff . . . .” Huggins v. FedEx Ground Package Sys., Inc., 592 F.3d 853, 862 (8th Cir.
2010). However, if a claim fails to allege one of the elements necessary to recover on a legal
theory, the Court must dismiss that claim for failure to state a claim upon which relief can be
granted. Crest Const. II, Inc. v. Doe, 660 F.3d 346, 355 (8th Cir. 2011). Threadbare recitals of a

cause of action, supported by mere conclusory statements, do not suffice. Iqbal, 556 U.S. at 678;
Twombly, 550 U.S. at 555. Although courts must accept all factual allegations as true, they are
not bound to take as true a legal conclusion couched as a factual allegation. Twombly, 550 U.S.
at 555 (citation omitted); Iqbal, 556 U.S. at 677–78.
III. Discussion
The Defendants move to dismiss the entirety of Riley and Reliford’s complaint for failure
to state a claim. Against Riley and Reliford’s count 1, Defendants argue that none of Riley and
Reliford’s three proffered theories—that the investment committee imprudently allowed
excessive recordkeeping fees, allowed excessive investment-management fees, and maintained
an underperforming fund—can support a breach-of-fiduciary-duty claim. Following this, the
Defendants then argue that count 2 fails by implication. The Court addresses these arguments in
turn.
A. Breach-of-fiduciary-duty claim

ERISA imposes a duty of prudence on plan fiduciaries like Olin’s investment committee.
The committee must act “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.” 29 U.S.C.
§ 1104(a)(1)(B). “This statutory duty of prudence establishes ‘an objective standard’ that
focuses on ‘the process by which’ decisions are made, ‘rather than the results of those decisions.’
A prudently made decision is not actionable, in other words, even if it leads to a bad outcome.”
Davis v. Washington Univ. in St. Louis, 960 F.3d 478, 482 (8th Cir. 2020) (quoting Braden v.
Wal-Mart Stores, Inc., 588 F.3d 585, 595 (8th Cir. 2009)).
At the motion-to-dismiss stage, the complaint suffices if the Court can “infer from what

is alleged that the process was flawed;” the complaint need not “directly address[] the process by
which the [p]lan was managed.” Braden, 588 F.3d at 596. In this “context-specific inquiry,”
Hughes v. Nw. Univ., 142 S. Ct. 737, 740 (2022), “‘[c]ircumstantial allegations about the
fiduciary’s methods’ based on the ‘investment choices a plan fiduciary made’ can be enough.”
Davis, 960 F.3d at 483 (quoting Meiners v. Wells Fargo & Co., 898 F.3d 820, 822 (8th Cir.
2018)). However, plaintiffs alleging a breach of fiduciary duty with circumstantial allegations
must “provide a sound basis for comparison—a meaningful benchmark” to show that a prudent
fiduciary in like circumstances would have acted differently. Meiners, 898 F.3d at 822.
1. Recordkeeping fees
As previously described, the complaint alleges that the revenue-sharing fee model
selected by the investment committee allowed recordkeeping fees to balloon. Doc. 1 at ¶ 79.
The complaint compares the plan’s “astronomical” recordkeeping fees to a survey conducted by

NEPC, an investment consulting firm, of 121 defined contribution plans. Id. at ¶¶ 81–83. That
survey found that in 2018 “no plans with between 5,000 and 10,000 participants paid more than
$100 in per participant recordkeeping, trust and custody fees.” Id. at ¶ 84. The complaint also
claims that “some authorities” recognize $35 per participant as the average amount large plans
should pay in recordkeeping fees. Id. at ¶ 85 & n.8. The complaint also faults the investment
committee for failing to conduct regular requests for proposal to identify more economical
recordkeepers and for failing to leverage the plan’s significant assets to negotiate a better deal on
recordkeeping costs. Id. at ¶¶ 86–89.
The investment committee argues that these allegations fail to state a breach-of-fiduciary-
duty claim. First, the committee argues that revenue sharing does not imply imprudence, Doc.

20 at pp. 5–6, and second, that the NEPC survey data is not a meaningful benchmark, id. at pp.
6–8. Third, the committee argues that the authorities on which Riley and Reliford rely to
establish a $35 recordkeeping-fee average likewise fail as an apt comparison. Id. at pp. 8–9.
And finally, the committee urges the Court to reject as the basis for a claim Riley and Reliford’s
“speculation” that the committee fails to conduct periodic requests for proposal. Id. at pp. 9–10.
Ultimately, the investment committee says that Riley and Reliford fail to identify any flaw in
Olin’s decision-making process that would allow the Court to infer misconduct. Id. at p. 10.
The Court agrees with the investment committee. First, Riley and Reliford acknowledge
that “a revenue sharing approach is not imprudent per se.” Doc. 1 at ¶ 78. In fact, revenue
sharing, a “common and acceptable investment industry practice[e],” “frequently inure[s] to the
benefit of ERISA plans.” Tussey v. ABB, Inc., 746 F.3d 327, 336 (8th Cir. 2014) (internal
quotation marks omitted).
Second, courts throughout the country routinely reject the 2019 NEPC survey—among

others—as a sound basis for comparison because it lacks in detail. See, e.g., Perkins v. United
Surgical Partners Int’l Inc., No. 3:21-cv-00973, 2022 WL 824839, at *6 (N.D. Tex. Mar. 18,
2022); Parmer v. Land O’Lakes, Inc., 518 F. Supp. 3d 1293, 1303–04 (D. Minn. 2021); Mator v.
Wesco Distribution, Inc., No. 2:21-cv-403, 2022 WL 1046439, at *7 (W.D. Pa. Apr. 7, 2022).
To plead a meaningful benchmark, “the plaintiff must ‘plead that the administrative fees are
excessive in relation to the specific services the recordkeeper provided to the specific plan at
issue.’” Perkins, 2022 WL 824839, at *6 (quoting Wehner v. Genentech, Inc., No. 20-cv-6894,
2021 WL 2417098, at *5 (N.D. Cal. June 14, 2021)). “[T]he 2019 NEPC survey does not
contain any information about the services provided to the surveyed plans. Thus, the Amended
Complaint [contains] an incongruent comparison.” Mator, 2022 WL 1046439, at *7.

Riley and Reliford respond that, at the motion-to-dismiss stage, the Court cannot
determine whether the 2019 NEPC survey suffices as a benchmark. Doc. 23 at p. 14. Not so.
At this stage, the Court accepts as true the survey’s findings as alleged. The survey considered
the recordkeeping, trust, and custody fees charged by a limited sample of investment plans of
various types and sizes without spelling out, in any degree of detail, the services the plans
received in return. For this reason the Court need not accept as true Riley and Reliford’s legal
conclusion that the survey serves as a meaningful benchmark against which to weigh the
investment committee’s actions. Twombly, 550 U.S. at 555; Iqbal, 556 U.S. at 677–78. Because
the survey provides information only at a high level of generality, the Court cannot accept it as a
meaningful benchmark. Meiners, 898 F.3d at 823 (concluding Meiners failed to plead a
meaningful benchmark by alleging only “that cheaper alternative investments with some
similarities exist”); see also Davis, 960 F.3d at 484–87 (conducting a detailed claim-by-claim
analysis to determine whether Davis had identified meaningful benchmarks).

Third, Riley and Reliford fail to explain how their footnoted argument—that the plan’s
recordkeeping costs are “clearly unreasonable” based on “some authorities” opining that large
plans typically charge $35 per participant in recordkeeping fees—provides a meaningful
comparison. As Defendants point out, Riley and Reliford’s authorities consist of “expert
opinions proffered by plaintiffs in other cases, an unspecified declaration, and the terms of a
settlement agreement reached in another unrelated case.” Doc. 20 at p. 13 (citing Doc. 1 at ¶ 85
n.8). The Court agrees that “[p]arty opinions and negotiated settlements concerning different and
entirely unrelated plans say nothing about the reasonableness of the Plan’s recordkeeping fees
here,” id. (emphasis added), because to hold otherwise would “permit[] plaintiffs to dodge the
requirement for a meaningful benchmark . . . in exactly the way [the Eighth Circuit] warned

against,” Meiners, 898 F.3d at 823 (“[In Braden,] [w]e found that different shares of the same
fund were a meaningful benchmark, but Meiners does not match that benchmark by alleging that
cheaper alternative investments with some similarities exist in the marketplace.”); id. at 823–24
(holding that the existence of “cheaper” alternatives does not, by itself, state a claim).
Finally, Riley and Reliford’s assertions that the investment committee failed to conduct
periodic requests for proposal and to renegotiate also do not cause the Court to draw an inference
that the investment committee acted imprudently. For starters, “the allegation that the Plan
fiduciaries were required to solicit competitive bids on a regular basis has no legal foundation.”
White v. Chevron Corp., No. 16-cv-793, 2016 WL 4502808, at *14 (N.D. Cal. Aug. 29, 2016).
While fiduciaries may need to utilize the request for proposal process under certain
circumstances, the case on which Riley and Reliford rely on for support, Allison v. L Brands,
Inc., provides an inapt comparison. No. 2:20-cv-6018, 2021 WL 4224729, at *9 (S.D. Ohio
Sept. 16, 2021). As Riley and Reliford themselves point out, the district court in that case denied

the defendant’s motion to dismiss because the plaintiff successfully “alleged that Plan
participants paid recordkeeping fees significantly in excess of competitive terms for a period of
at least six years, when information was available to Plan fiduciaries that could have mitigated or
avoided these losses.” Id.; Doc. 23 at p. 16.
As the Court explained above, the allegations in the complaint do not establish that the
investment committee allowed Riley, Reliford, and the other plan participants to pay excessive
fees. Thus, having considered the complaint in its totality, the Court concludes that Riley and
Reliford do not state a breach-of-fiduciary-duty claim under an excessive-recordkeeping-fees
theory.
2. Investment-management fees

As mentioned, Riley and Reliford allege that many of the plan’s funds charge excessive
investment-management fees and that “many of the [p]lan’s investments were significantly more
expensive than comparable funds found in similarly sized plans.” Doc. 1 at ¶¶ 90–92. In
support of these allegations, the complaint notes that many of the funds in the plan had expense
ratios “significantly greater than the ICI median and ICI averages.” Id. at ¶¶ 103–06. The
complaint also alleges that “the Defendants could not have engaged in a prudent process”
because the plan maintained several T. Rowe Price mutual funds despite the availability of
cheaper, collective trust versions of the funds (which the plan eventually switched to). Id. at
¶ 103.
Riley and Reliford rely on the ICI median and ICI averages to support this claim. But “a
complaint cannot simply make a bare allegation that costs are too high, or returns are too low.
Rather, it ‘must provide a sound basis for comparison—a meaningful benchmark.’” Davis, 960
F.3d at 478 (quoting Meiners, 898 F.3d at 822). The ICI data fails as such a benchmark. The

ICI data on which Riley and Reliford rely apparently considers the plan size and the high-level
“investment style” of each fund (for example, a target date fund, a domestic equity fund, or an
index fund), but this does not suffice. The Eighth Circuit requires the Court to thoroughly
compare challenged funds and putative benchmark funds with regard to fund holdings,
investment style, and strategy—and neither the Plaintiffs nor the ICI data provide any of this
required information. Davis, 960 F.3d at 484–87. For this reason, courts consistently conclude
that the ICI data cannot serve as a “meaningful benchmark,” and this Court agrees. See, e.g.,
Perkins, 2022 WL 824839, at *6 (noting before agreeing that “several courts have rejected the
Brightscope/ICI study median as a meaningful benchmark . . . because the ICI study does not
distinguish between actively and passively managed accounts”); Parmer, 518 F. Supp. 3d at

1303 (“The court agrees with defendants and finds that the ICI Study median expense ratios are
not meaningful benchmarks.”); Rosenkranz v. Altru Health Sys., No. 3:20-cv-168, 2021 WL
5868960, at *10 (D.N.D. Dec. 10, 2021) (“Accordingly, Plaintiffs have not sufficiently pleaded
that the Committee breached the fiduciary duty of prudence by retaining the Challenged Funds
when they had higher investment management fees than those listed in the ICI Median Report.”).
Riley and Reliford respond that determining whether the ICI data suffices as a benchmark
impermissibly drags the Court “into the factual weeds.” Doc. 23 at pp. 17–18. Once more, the
Court rejects this argument. Just like the Court’s consideration of the NEPC survey above, at
this stage the Court accepts as true the ICI’s findings as alleged, yet need not accept as true Riley
and Reliford’s legal conclusion that the survey serves as a meaningful benchmark against which
to weigh the investment committee’s actions. See Twombly, 550 U.S. at 555; Iqbal, 556 U.S. at
677–78.
Riley and Reliford come closer, but ultimately fail to successfully allege that “the

Defendants could not have engaged in a prudent process” with their bare allegation that the plan
maintained several T. Rowe Price mutual funds despite the availability of cheaper, collective
trust versions of the funds (which the plan eventually switched to). Id. at ¶ 103. Without more,
courts “routinely” find that collective trusts are not meaningful comparators to mutual funds
because “collective trusts are subject to unique regulatory and transparency features that make a
meaningful comparison impossible.” Parmer, 518 F. Supp. 3d at 1305–06 (collecting cases).
On the other hand, the Ninth Circuit recently reversed a district court that had dismissed a
breach-of-fiduciary-duty claim that alleged that the defendants imprudently failed to select
lower-cost collective investment trusts with identical underlying assets as the challenged mutual
funds. Davis v. Salesforce.com, Inc., No. 21-15867, 2022 WL 1055557 (9th Cir. Apr. 8, 2022)

(unpublished). However, in that case, the plaintiffs alleged that the challenged mutual fund and
the collective investment trust had “the same underlying investments and asset allocations as
their mutual fund counterparts but had better annual returns and a lower net expense ratio.” Id.
at *2 (internal quotation marks omitted); see Davis, 960 F.3d at 483 (holding that allegations
defendant offered a “mixed” lineup of funds—where both lower-cost, institutional shares and
identical, higher-cost retail shares are available for plan participants—state a breach-of-
fiduciary-duty claim). Riley and Reliford’s complaint lacks any comparative allegations
regarding plan investments, asset allocations, and the like—merely contending that the T. Rowe
Price target-date collective investment trust had a lower expense ratio than the T. Rowe Price
target-date mutual funds. Without more, these allegations do not state a claim. Thus, having
considered the complaint in its totality, the Court concludes that Riley and Reliford do not state a
breach-of-fiduciary-duty claim under an excessive-investment-fees theory.
3. The one, underperforming fund

Finally, according to the complaint, the investment committee should have replaced one
of the funds in the plan, the Eaton Vance Small/Mid Cap fund, because it underperformed. As
mentioned, in “an investment-by-investment challenge like this one, a complaint cannot simply
make a bare allegation that costs are too high, or returns are too low. Rather, it ‘must provide a
sound basis for comparison—a meaningful benchmark.’” Davis, 960 F.3d at 478 (quoting
Meiners, 898 F.3d at 822).
Riley and Reliford attempt to do so by comparing the Eaton Vance Small/Mid Cap fund’s
expense ratio and average annual return with another fund, the NCTWX Nicholas II I fund. The
complaint’s comparison shows that the Eaton Vance fund had an expense ratio of 0.82%
compared to the Nicholas II I fund’s 0.60%. As of June 30, 2020, the Eaton Vance fund’s one-

year, three-year, and five-year average annual returns were 43.02%, 15.62%, and 16.10%, with
benchmark relative performance of -0.60%, -6.51%, and -4.16%, respectively. On the other
hand, as of June 30, 2020, the Nicholas II I fund’s one-year, three-year, and five-year average
annual returns were 37.56%, 17.34%, and 17.21%, with benchmark relative performance of -
6.06%, -4.79%, and -3.05%, respectively.
This comparison at most establishes that Riley and Reliford’s marginally cheaper,
comparator fund performed better than Olin’s selected fund at the three- and five-year marks.
But, of course, allegations “that costs are too high, or returns are too low” fail to support an
inference of misconduct. Moreover, “[a] prudently made decision is not actionable . . . even if it
leads to a bad outcome.” Davis, 960 F.3d at 482. For circumstantial allegations to support a
breach-of-fiduciary-duty claim, the Eighth Circuit requires the Court to thoroughly compare the
challenged fund with the putative benchmark fund, paying special attention to each fund’s
holdings, investment style, and strategy. Davis, 960 F.3d at 484–87. Here, Riley and Reliford

fail to explain how their comparator, the Nicholas II I fund, provides a sound basis for
comparison to the Eaton Vance Small/Mid Cap fund. In fact, Riley and Reliford provide none of
the information courts regularly consider when determining whether a plaintiff states an ERISA
breach-of-fiduciary-duty claim, like fund prospectuses, cf. id. at 484 n.3 (“Like the district court,
we consider the relevant fund prospectuses . . . .”); instead, Riley and Reliford allege only that
the two funds are “in the same category,” Doc. 1 at ¶ 108.
Riley and Reliford’s sparse allegations do not provide a meaningful benchmark against
which the Court can evaluate their claim. Thus, having considered the complaint in its totality,
the Court concludes that Riley and Reliford do not state a breach-of-fiduciary-duty claim under
the theory that Olin retained an underperforming fund.

B. Failure-to-monitor claim
Lastly, Olin and its board move to dismiss Riley and Reliford’s derivative failure-to-
monitor claim. Riley and Reliford’s only argument against dismissal presumes that they state a
breach-of-fiduciary-duty claim against the investment committee. Doc. 23 at p. 20. Because
they fail to state such a claim, the Court grants Olin and its board’s motion to dismiss Riley and
Reliford’s failure-to-monitor claim. See Brown v. Medtronic, 628 F.3d 451, 461 (8th Cir. 2010)
(“[N]either of these [derivative] claims can survive without a sufficiently pled theory of an
underlying breach.”).
IV. Conclusion
For the foregoing reasons, the complaint fails to state a claam. Thus, the Court grants the
Defendants’ [19] motion to dismiss, dismisses the complaint without prejudice, and denies Riley
and Reliford’s informal request for leave to amend their complaint. See Misischia v. St. John’s
Mercy Health Sys., 457 F.3d 800, 805 (8th Cir. 2006) (holding that the district court does not
abuse its discretion in denying leave to amend when plaintiff raises the issue “with a one-line
request in his brief opposing defendants’ motion to dismiss”); see also Judge’s Requirements at
p. 3. A separate order of dismissal accompanies this memorandum and order.
So Ordered this 21st day of June 2022.

=
EPHEN R. CLARK Es
UNITED STATES DISTRICT JUDGE

15

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10242168. Public record. Not legal advice.