# DAVIS v. OLD DOMINION FREIGHT LINE, INC.

> District Court, M.D. North Carolina · September 6, 2023

URL: https://www.frixlaw.com/law-library/cases/10254379

## Case

- **Court:** District Court, M.D. North Carolina
- **Decided:** September 6, 2023
- **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/10254379

## How later opinions describe it (automated extraction)

- finding that the “provision does authorize recovery for fiduciary breaches that impair the value of plan assets in a participant’s individual account”
- holding that plaintiffs had standing to bring claims for surcharge, disgorgement, and declaratory and injunctive relief even in the absence of any aggregate financial loss, which would be necessary for standing to recover compensatory damages
- finding that plaintiff lacked standing in part because the claimed injuries to itself were raised “in its briefs, but not in its complaint”

## Opinion text

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF NORTH CAROLINA

HARVEY L. DAVIS, on behalf of )
The Old Dominion 401(k) Retirement )
Plan, individually, and on behalf )
Of all others similar situated, )
)
Plaintiff, )
) 1:22CV990
v. )
)
OLD DOMINION FREIGHT LINE, INC., )
)
Defendant. )

MEMORANDUM OPINION AND ORDER

THOMAS D. SCHROEDER, District Judge.
This dispute arises from alleged violations of the Employee
Retirement Income Security Act, 29 U.S.C. §§ 1001 et seq.
(“ERISA”). Before the court is a motion to dismiss pursuant to
Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6) filed by
Defendant Old Dominion Freight Line, Inc. (“Old Dominion”). (Doc.
14.) Plaintiff Harvey L. Davis responded in opposition (Doc. 20),
and Old Dominion replied (Doc. 21). For the reasons set forth
below, the court will grant Old Dominion’s motion to dismiss on
the ground that Davis lacks standing.
I. BACKGROUND
Davis brought this action against Old Dominion on behalf of
the Old Dominion 401(k) Retirement Plan on November 18, 2022.
(Doc. 1.) The facts set forth below are based on the well-pleaded
allegations of the complaint, which are accepted as true for the
purposes of this motion to dismiss and viewed in the light most
favorable to Davis as the non-moving party.
Davis is a former employee of Old Dominion (see id. ¶ 16;

Doc. 15 at 2) and is among a group of eligible current and former
employees who participate in Old Dominion’s 401(k) retirement plan
(the “Plan”) (Doc. 1 ¶¶ 13, 16). The Plan is a defined contribution
plan, where individual plan participants recoup value in
proportion to the amount they individually invest. (Id. ¶¶ 3,
15.) “[A]ll of [Old Dominion’s] employees who are at least 18
years old and who complete three months of eligible employment
service” may participate. (Id. ¶ 25.) As of December 23, 2021,
“the Plan had 24,033 participants and $1,950,898,737 in assets
under management.” (Id. ¶ 32.)
ERISA regulates the management of retirement plans such as
the Plan here. Davis alleges that Old Dominion is a fiduciary of

the Plan and is thus required by ERISA to fulfill certain fiduciary
obligations, including “a continuing duty to monitor trust
investments and remove imprudent ones.” (Id. ¶ 51 (quoting Tibble
v. Edison Int’l, 575 U.S. 523, 529); see id. ¶¶ 49-50, 52-54.)
Davis alleges that Old Dominion breached its fiduciary duties to
the Plan by pursuing “high priced investments when the identical
investments were available to the Plan at a fraction of the cost.”
(Id. ¶ 9; see id. ¶¶ 44, 55-62.) These more expensive share
classes offered the Plan no “additional services or benefits” such
that there was “no good-faith explanation for selecting and
retaining the higher-priced and poorly performing share classes.”
(Id. ¶ 60.) This imprudence in investment led to a loss of $3

million to “the Plan and its participants” during “the relevant
time period.”1 (Id. ¶ 9; see id. ¶¶ 18-20 (alleging that “the Plan
suffered millions of dollars in losses caused by [Old Dominion’s]
fiduciary breaches” and that it “continues suffering economic
losses”).)
Further, Davis alleges that Old Dominion imprudently offered
“‘actively’ managed funds” rather than those “managed with [a]
‘blend’ of active [and] passive management techniques” even though
the actively managed funds charged more in fees and underperformed
the latter funds. (Id. ¶ 61.) Davis lists eleven specific share
classes he alleges Old Dominion offered as higher-priced,
actively-managed funds, comparing each with its lower-priced,

blended-management alternative. (Id. ¶ 56.) Old Dominion’s
“fail[ure] to undertake any analysis” before making its selections
led to these unwise choices and the Plan’s substantial economic
losses. (Id. ¶ 62.)
Davis likewise alleges that Old Dominion, as the “Plan
Sponsor,” breached its “obligation to monitor all other
fiduciaries for the Plan” (id. ¶ 133), causing the Plan and its

1 Davis alleges that injuries began on November 18, 2016, and extend to
the present. (Id. ¶ 33.)
participants millions of dollars in losses (id. ¶¶ 136-37).
As to his connection to these facts, Davis alleges that he
was injured by Old Dominion’s mismanagement of the Plan, “paying

excessive recordkeeping and administrative costs associated with
the Plan and investing in the imprudent investment options offered
by the Plan, which are the subject of this lawsuit.” (Id. ¶ 16.)
But he provides no factual allegation of what those costs and
investments were. Instead, on its face, the complaint contains no
factual support for the conclusory allegations that he personally
invested in any of the imprudent investment options, nor that he
suffered any other type of specific financial loss.
Davis brings two causes of action against Old Dominion,
relying on these allegations: the first for breach of fiduciary
duty of prudence (id. ¶¶ 63-67), and the second for failure to
adequately monitor other fiduciaries (id. at ¶¶ 132-138). He seeks

various types of relief, including reforms to the Plan,
compensatory damages for losses, attorney’s fees and costs, and
such “equitable and remedial relief as the Court deems
appropriate.” (Id. at 23-24.) Furthermore, he asserts these
claims for recovery on behalf of the Plan and its participants as
an entity, rather than as an individual. Davis accordingly
contends that this action is appropriate for class certification
because “joinder is impractical” given the number of possible
plaintiffs (id. ¶ 34), because his “claims are typical of the
claims of Class members” (id. ¶ 35), and because “there are
questions of law and fact common to the Class,
[which] . . . predominate over questions affecting only individual

Class members” (id. ¶ 36).
Old Dominion now moves to dismiss the complaint pursuant to
Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). (Doc.
14.) The motion is fully briefed and ready for decision.
II. ANALYSIS
Old Dominion’s motion urges two possible grounds for
dismissal: lack of subject matter jurisdiction pursuant to Rule
12(b)(1) or, in the alternative, failure to state a claim pursuant
to Rule 12(b)(6). (Doc. 14.) As the following analysis explains,
Davis has not demonstrated Article III standing to bring this case.
The court therefore lacks the requisite subject matter
jurisdiction to proceed and will dismiss the complaint without

prejudice on that ground.
A. Legal Standard
Federal district courts exercise limited jurisdiction. Exxon
Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546, 552 (2005).
“‘Article III gives federal courts jurisdiction only over cases
and controversies,’ and standing is ‘an integral component of the
case or controversy requirement.’” CGM, LLC v. BellSouth
Telecomms., Inc., 664 F.3d 46, 52 (4th Cir. 2011) (quoting Miller
v. Brown, 462 F.3d 312, 316 (4th Cir. 2006)). For a case or
controversy to be justiciable in federal court, a plaintiff must
allege “‘such a personal stake in the outcome of the controversy
as to warrant his invocation of federal court jurisdiction and to

justify exercise of the court’s remedial powers on his behalf.’”
White Tail Park, Inc. v. Stroube, 413 F.3d 451, 458 (4th Cir. 2005)
(quoting Planned Parenthood of S.C. v. Rose, 361 F.3d 786, 789
(4th Cir. 2004)). Given the importance of this requirement, “a
federal court can inquire into standing at any stage of a case,
and if it finds the plaintiff lacks standing, it may dismiss the
case.” Goldstein v. Costco Wholesale Corp., 278 F. Supp. 2d 766,
769 (E.D. Va. 2003) (citing Marcus Cable Assocs. V. City of
Bristol, 237 F. Supp. 2d 675, 677 n.2 (W.D. Va. 2002)).
The party seeking to invoke a federal court’s jurisdiction
has the burden of satisfying Article III’s standing requirement.
Miller, 462 F.3d at 316. To meet that burden, a plaintiff must

demonstrate three elements: (1) that he has suffered an injury in
fact that is “concrete and particularized” and “actual or
imminent”; (2) that the injury is fairly traceable to the
challenged conduct; and (3) that a favorable decision is likely to
redress the injury. Lujan v. Defenders of Wildlife, 504 U.S. 555,
560-61 (1992). The Supreme Court “ha[s] consistently stressed
that a plaintiff’s complaint must establish that he has a ‘personal
stake’ in the alleged dispute, and that the alleged injury suffered
is particularized as to him.” Raines v. Byrd, 521 U.S. 811, 819
(1997) (citing Lujan, 504 U.S. at 560-61 and n.1).
In addition, “[w]hen a defendant raises standing as the basis
for a motion under Rule 12(b)(1) to dismiss for lack of subject

matter jurisdiction,” the court is not limited to considering only
allegations made in the well-pleaded complaint as it normally would
be on a motion to dismiss. White Tail Park, Inc., 413 F.3d at
459. Instead, “the district court ‘may consider evidence outside
the pleadings without converting the proceeding to one for summary
judgment.’” Id. (quoting Richmond, Fredericksburg & Potomac R.R.
Co. v. United States, 945 F.2d 765, 768 (4th Cir. 1991)); see Moore
v. Va. Cmty. Bankshares, Inc., No. 3:19-cv-45, 2023 WL 2714930, at
*3 (2023) (“[C]ourts may consider affidavits and other extrinsic
information to determine whether subject matter jurisdiction
exists.” (quoting Saval v. BL Ltd., 710 F.2d 1027, 1029 n.2 (4th
Cir. 1983))).

B. Standing
Old Dominion challenges the court’s subject matter
jurisdiction on the basis that Davis lacks standing to sue on
behalf of the class because he did not suffer an individual injury.
(Doc. 15 at 14-16.) It maintains that Davis’s complaint nowhere
alleges that he “sustained injury to his own account” because of
Old Dominion’s actions. (Id. at 16.) Old Dominion notes that
Davis fails to assert that he invested in “any of the eleven
challenged funds, or even in any actively managed funds.” (Id. at
15.) It further offers evidence that Davis did not invest in any
of these funds but rather “invested solely in the Plan’s stable
value funds” which are not the subject of his challenge. (Id.)

Old Dominion concludes that Davis’s individual account “will not
fluctuate one cent whether he wins or loses this case,” and so he
has “no concrete stake in this lawsuit.” (Id. at 16.)
In response, Davis argues that “participants in defined-
contribution plans suffer an injury-in-fact sufficient for Article
III standing when alleging that a fiduciary’s breach has negatively
impacted their accounts,” which he argues he has faced here. (Doc.
20 at 25 (citing In re Mut. Funds Inv. Litig., 529 F.3d 207, 216
(4th Cir. 2008)).) Davis points to a recent case in which a
district court found that plaintiffs had standing when they
“allege[d] injury to their individual 401(k) accounts in the form
of excessive record-keeping and administrative costs as well as an

expensive overall investment menu endured by each Plan
participant.” (Id. at 25-26 (quoting Jones v. Coca-Cola Consol.,
Inc., No. 3:20-cv-00654-FDW-DSC, 2021 WL 1226551, at *4 (W.D.N.C.
Mar. 31, 2021)).) There, the court found that “if the plaintiffs’
allegations are true, they suffered injury in that their retirement
accounts [are] worth less [than] they would have been absent the
breach[s].” (Id. at 26 (quoting Jones, 2021 WL 1226551, at *4
(some alterations added) (citations omitted)).) Davis accordingly
claims that his ”[c]omplaint is freighted with allegations” that
he suffered just such injuries and therefore has standing before
this court. (Id.)
In turn, Old Dominion responds that “nowhere does Davis allege

that [it] committed a plan-wide breach impacting his individual
account,” nor does he “allege that every fund in the Plan’s
investment menu . . . was in the wrong share class.” (Doc. 21 at
9.) It asserts that “[t]he only substantive allegation the
Complaint makes is that the Committee imprudently offered [certain
funds] in the R-5 share class instead of the R-6 share class” (id.
at 6) and that Davis “does not dispute that he never invested in
any of the eleven challenged funds” (id. at 7).
As a preliminary matter, the court must address the disparity
between the complaint filed with the court and the one Davis
appears to cite throughout his most recent briefing. As Old
Dominion notes, while Davis claims that the “[c]omplaint is 38

pages long and contains 138 separate paragraphs” (Doc. 20 at 11),
the complaint filed on the docket is only 25 pages long and
contains paragraphs numbered 1 through 67 and 132 through 138 (74
total paragraphs) (see Doc. 1). Old Dominion’s characterization
that Davis’s subsequent briefing refers to “phantom paragraphs” is
apt, as Davis’s response to the motion to dismiss oddly and
repeatedly cites to paragraphs that simply do not appear in the
complaint on the docket.
Davis chides Old Dominion for ignoring various of his
allegations (Doc. 20 at 11, 17, 19, 26, 27) and asserts that the
“[c]omplaint’s allegations are not limited to imprudence and
losses stemming from investments as Defendant argues” (id. at 26).

However, not only does the complaint not contain “detailed
allegations” regarding excessive compensation received by the
Plan’s recordkeeper as argued by Davis (id. at 17), the terms
“excessive compensation,” “float compensation,” “direct fee
compensation,” and “revenue sharing compensation” relied on by
Davis do not appear at any point in the complaint.2 Davis makes a
passing allegation that he “pa[id] excessive recordkeeping and
administrative costs associated with the Plan” (Doc. 1 ¶ 16), and
his prayer for relief includes a request to “[r]eform the Plan to
obtain bids for recordkeeping and to pay only reasonable
recordkeeping expenses” (id. at 23). Nowhere, however, does Davis
allege that Old Dominion “imprudently caused the Plan’s

recordkeeper . . . to receive millions of dollars of excessive
compensation from the Plan.” (Doc. 20 at 17.) Thus, the court
will confine its analysis of standing to the actual contents of
the complaint and Davis’s responsive arguments that pertain to the
complaint’s allegations concerning imprudent investments on the
Plan menu and excessive fees related to those investments. See

2 The word “compensation” appears once, in ERISA’s definition of
fiduciary, and the word “recordkeeper” appears only where the complaint
names the Plan’s recordkeeper. (Doc. 1 ¶¶ 26, 41.)
Raines, 521 U.S. at 818 (“One element of the case-or-controversy
requirement is that appellees, based on their complaint, must
establish that they have standing to sue.” (citing Lujan, 504 U.S.

at 561) (emphasis added)); see also W.R. Huff Asset Mgmt. Co., LLC
v. Deloitte & Touche LLP, 549 F.3d 100, 110-11 (2d Cir. 2008)
(finding that plaintiff lacked standing in part because the claimed
injuries to itself were raised “in its briefs, but not in its
complaint”).
Although ERISA, 88 Stat. 829 § 502(a)(2), 29 U.S.C.
§ 1132(a)(2), “does not provide a remedy for individual injuries
distinct from plan injuries,” it does authorize a participant to
bring a civil action seeking relief for breaches of fiduciary duty
as outlined in § 1109.3 LaRue v. DeWolff, Boberg & Assocs., Inc.,
552 U.S. 248, 256 (2008) (finding that the “provision does
authorize recovery for fiduciary breaches that impair the value of

plan assets in a participant’s individual account”). Davis asserts
that he has standing to sue on behalf of the Plan to seek redress
for the injury Old Dominion has caused it in the form of “millions
of dollars in losses caused by Defendant’s fiduciary breach” and
ongoing “expos[ure] to harm and continued losses.” (Doc. 1 ¶ 20.)
Davis further states he has shown an individual injury “because he

3 Old Dominion does not dispute that Davis has statutory standing, as a
participant in the Plan, to bring this action pursuant to § 1132(a)(2).
participated in the Plan and was injured and continues to be
injured by Defendant’s unlawful conduct.” (Id. ¶ 21.)
“There is no ERISA exception to Article III.” Thole v. U.S.

Bank N.A., 140 S. Ct. 1615, 1622 (2020). The Supreme Court “has
rejected the argument that ‘a plaintiff automatically satisfies
the injury-in-fact requirement whenever a statute grants a person
a statutory right and purports to authorize that person to sue to
vindicate that right.” Id. at 1620. Likewise, “Article III
standing requires a concrete injury even in the context of a
statutory violation.” Id. at 1620-21 (quoting Spokeo, Inc. v.
Robins, 136 S. Ct. 1540, 1549 (2016)).
The Supreme Court and appellate courts have drawn a
distinction between defined benefit plans and defined contribution
plans in the context of finding an individual injury that satisfies
Article III standing pursuant to ERISA. With defined benefit

plans, the Supreme Court has held that plan participants do not
have standing to sue for plan-wide fiduciary mismanagement unless
“the mismanagement of the plan was so egregious that it
substantially increased the risk that the plan . . . would fail”
entirely since “retirees receive a fixed payment each month” that
“do[es] not fluctuate . . . because of the plan fiduciaries’ good
or bad investment decisions.” Id. at 1621, 1618. The same
limitation does not apply to defined contribution plans, where
“fiduciary misconduct need not threaten the solvency of the entire
plan to reduce benefits below the amount that participants would
otherwise receive.” LaRue, 552 U.S. at 255-56 (emphasis added).
Instead, participants in defined contribution plans retain an

individual equitable interest in the plan and may sue for
enforcement of that interest. See Thole, 140 S. Ct. at 1619-20
(citing LaRue, 552 U.S. at 254-56) (suggesting that participants
in defined contribution plans are somewhat akin to beneficiaries
of private trusts). Thus, while ERISA “does not provide a remedy
for individual injuries distinct from plan injuries, [it] does
authorize recovery for fiduciary breaches that impair the value of
plan assets in a participant’s individual account.” LaRue, 552
U.S. at 256.
Similarly, the Fourth Circuit has held that participants in
a defined contribution plan have standing pursuant to ERISA to
“seek to recover amounts that they claim should have been in their

accounts had it not been for alleged fiduciary impropriety,” even
when those participants had “cashed out” their benefits. Mut.
Funds Inv. Litig., 529 F.3d at 210. While the court’s analysis
focused on plaintiffs’ statutory standing, it determined that
plaintiffs also needed to have personally “suffered an injury that
could be redressed by the court” in order to have constitutional
standing to bring their ERISA claims. Id. at 219. According to
the court, the plaintiffs had constitutional standing because “the
defendants breached fiduciary obligations imposed by ERISA . . .
and those breaches had an adverse impact on the value of the plan
assets in the plaintiffs’ individual accounts.” Id. It was only
by virtue of the individual injuries plaintiffs’ accounts

sustained due to the alleged breach of fiduciary duties, however,
that the court was able to proceed. See id. at 215 (“[I]f the
plaintiff colorably claims that under the plan and ERISA he was
entitled to more than he received on the day he cashed out, then
he . . . must be accorded participant standing.” (citation
omitted)).4
Here, Old Dominion has met its burden of showing that Davis
was not individually harmed and therefore lacks standing on the
face of the complaint to proceed in this case. A review of the
records offered by Old Dominion, which may be considered at this
stage given the jurisdictional nature of this issue, supports its
claim that Davis did not, in fact, invest in any of the challenged

funds. Old Dominion has attached Davis’s account statements from
the years at issue (Docs. 15-2, 15-3, 15-4, 15-5, 15-6, 15-7, 15-

4 The Fourth Circuit has held that when pursuing certain forms of
equitable relief, plaintiffs may not need to allege specific financial
loss. See Peters v. Aetna Inc., 2 F.4th 199, 219-21 (2021) (holding
that plaintiffs had standing to bring claims for surcharge, disgorgement,
and declaratory and injunctive relief even in the absence of any
aggregate financial loss, which would be necessary for standing to
recover compensatory damages). But even in such instances, plaintiffs
must have another cognizable individual injury to have standing. Namely,
plaintiffs must show that the defendants either breached a fiduciary
duty toward them individually or that defendants were unjustly enriched
by plaintiffs’ activities. See id.
8) which show that Davis invested in only three funds,5 none of
which was included in the complaint’s list of eleven challenged
funds.

Nor does Davis ever dispute Old Dominion’s showing on this
issue. Davis acknowledges that he must allege an individual injury
in order to bring this action, reciting the Fourth Circuit holding
that “participants in defined-contribution plans suffer an injury-
in-fact sufficient for Article III standing when alleging that a
fiduciary’s breach has negatively impacted their accounts.” (Doc.
20 at 25 (citing Mut. Funds Inv. Litig., 529 F.3d at 216) (emphasis
added).) And his complaint asserts that he “participated in the
Plan, paying excessive recordkeeping and administrative costs
associated with the Plan and investing in the imprudent investment
options offered by the Plan, which are the subject of this
lawsuit.” (Doc. 1 ¶ 16.) But there is no factual reference to

Davis’s own investment choices or the fees he was paying, focusing
rather on allegations of generalized injury to the Plan as a basis
for individual standing. (See, e.g., id. ¶ 21 (“Plaintiff has
standing to bring this action on behalf of the Plan because he
participated in the Plan and was injured and continues to be
injured by Defendant’s unlawful conduct.”).) Indeed, neither the

5 The records show that from 2016 through 2022, Davis selected JPMCB
Stable Asset Income Fund-G (Doc. 15-2 at 1-2), Great-West Select
Guaranteed Fund (Docs. 15-3 at 1-2, 15-4 at 1-2, 15-5 at 1-2, 15-6 at
1-2, 15-7 at 1-2), and E I Fixed Account – Series Class V (Doc. 15-8 at
1-2).
complaint nor Davis’s response brief further asserts that he
invested in the challenged funds, and he neither demonstrates nor
even claims that his own retirement account was harmed by the

alleged imprudent investment options. The only injury on which
Davis appears to hang his individual standing claim, “allowing
Empower Financial to collect excessive compensation from
Plaintiff,” is not alleged in the complaint. (Doc. 20 at 27.)
His complaint also lacks allegations that might indicate unjust
compensation resulting from various fee structures attendant to
the alleged Plan mismanagement, leaving him with no individual
injury on which to rest his claim.
Davis concedes that Old Dominion’s argument as to standing
“might have merit if Plaintiff had brought a specific count of
imprudence pertaining to investments only.” (Id.) Davis asserts
that “such a count does not exist” (id.), but that is precisely

what his complaint alleges (Doc. 1 ¶ 63-67 (“First Claim for
Relief”) (alleging that “Defendant breached its fiduciary duties
by selecting and retaining imprudent share classes and investments
for the Plan” (emphasis added))). Without any plausible
allegations indicating that Davis’s own retirement account was
injured by Old Dominion’s alleged breach of fiduciary duty of
prudence and failure to adequately monitor other fiduciaries,
Davis has not met his burden of showing that he has suffered an
injury-in-fact. Thus, he lacks Article III standing to pursue his
claim.
Having found it lacks subject matter jurisdiction over
Davis’s claim, the court need not consider Old Dominion’s motion

to dismiss pursuant to Rule 12(b)(6).
III. CONCLUSION
For the reasons stated,
IT IS THEREFORE ORDERED that Old Dominion’s motion to dismiss
for lack of subject matter jurisdiction (Doc. 14) is GRANTED and
the complaint is DISMISSED WITHOUT PREJUDICE.

/s/ Thomas D. Schroeder
United States District Judge

September 6, 2023

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10254379. Public record. Not legal advice.