# Gardner-Keegan

> District Court, N.D. Illinois · January 26, 2026

URL: https://www.frixlaw.com/law-library/cases/11247713

## Case

- **Full name:** Adrianne Gardner-Keegan, Scott A. Norman, and Alison Dela Riva v. W.W. Grainger, Inc. and the W.W. Grainger Inc. Profit Sharing Investment Committee
- **Court:** District Court, N.D. Illinois
- **Decided:** January 26, 2026
- **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/11247713

## How later opinions describe it (automated extraction)

- explaining that Section 1106 is directed to “commercial bargains” such as leasing, sales, exchanges of property, money lending, credit extensions, and furnishing goods and services, which put plan funds at risk if they are not conducted at arm’s length

## Opinion text

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

GARDNER-KEEGAN, et al.,

Plaintiffs,
Case No. 1:25-cv-5233
v.
Judge Mary M. Rowland
W.W. GRAINGER, INC., et al.,

Defendants.

MEMORANDUM OPINION AND ORDER
Adrianne Gardner-Keegan, Scott A. Norman, and Alison Dela Riva
(“Plaintiffs”), individually and as representatives of a class of participants and
beneficiaries of the W.W. Grainger, Inc. Retirement Savings Plan (the “Plan”), bring
this six-count action against W.W. Grainger, Inc. (“Grainger”) and the W.W. Grainger
Inc. Profit Sharing Investment Committee (the “Plan Committee”) (collectively,
“Defendants”) alleging various violations of the Employee Retirement Income
Security Act of 1974 (“ERISA”). Defendants have moved to dismiss all of Plaintiffs’
claims. [11].
For the reasons stated herein, Defendants’ Motion to Dismiss [11] is granted
in part.
I. Background
The following factual allegations taken from the operative complaint [1] are
accepted as true for the purposes of the motion to dismiss. See Lax v. Mayorkas, 20
F.4th 1178, 1181 (7th Cir. 2021).
Grainger is an industrial supply company that serves more than 4.5 million
customers worldwide with products such as motors, lighting, material handling,
fasteners, plumbing, tools, and safety supplies, along with inventory management

services and technical support. [1] ¶ 10. Grainger sponsors the Plan, which is an
individual account, defined-contribution retirement benefit plan. Id. ¶ 41. The Plan
Committee administers the Plan and is a fiduciary for the Plan. Id. ¶ 15. Grainger
has authority to determine the number of members on the Plan Committee as well
as appoint and remove Plan Committee members. Id. ¶ 14. Plaintiffs are current and
former participants of the Plan. Id. ¶¶ 17–19, 40.

The Plan is funded through a combination of wage withholding contributions from
Plan participants and employer profit-sharing contributions from Grainger. Id. ¶ 37.
Grainger’s contributions to the Plan vest over time. Id. ¶ 42. As a result, if a Plan
participant’s employment ends before their vesting date, they forfeit Grainger’s
employer contributions. Id.¶ 43.
Section 8.4 (titled “Forfeitures”) of the governing Plan document (“Plan
Document”)1 sets forth how forfeited employer contributions (also referred to as

“forfeitures”) are to be used. Id.¶ 45. Section 8.4 contains the following provision:

1As explained by Defendants, there are two versions of the Plan Document: the “W.W.
Grainger, Inc. Employees Profit Sharing Plan” effective January 1, 2016 [13-1], and
the “W.W. Grainger, Inc. Retirement Savings Plan,” effective January 1, 2021 [13-2].
[12] at n.2. Neither of these documents were provided as part of the Complaint, but
the Court can nevertheless consider them. 188 LLC v. Trinity Indus., Inc., 300 F.3d
730, 735 (7th Cir. 2002) (“It is also well-settled in this circuit that documents attached
to a motion to dismiss are considered part of the pleadings if they are referred to in
the plaintiff’s complaint and are central to his claim.”)(cleaned up). Defendants
contend the 2016 and 2021 versions contain the same forfeiture and plan expense
Forfeiture Account amounts shall be utilized to pay reasonable
administrative expenses of the Plan and to restore Accounts for a Plan
Year, as directed by the Committee, and then (i) for Plan Years prior to
the 2016 Plan Year, to increase the amount allocated as Company Profit
Sharing Contributions for that Plan Year, (ii) beginning with the 2016
Plan Year, to offset Company Profit Sharing Contributions, and (iii)
beginning with the 2021 Plan Year, to offset Company Contributions
(aka Safe Harbor Company Contributions).

Id.¶ 45.

Plaintiffs contend that the language of this provision obligated the Plan
Committee to utilize forfeitures to pay reasonable administrative expenses (Step 1)
before offsetting Grainger’s contributions to the Plan (Step 2). Id. ¶¶ 46, 96.
Defendants disagree with this interpretation. [12] at 4–13.
From 2019 to 2023, the Plan Committee did not utilize forfeitures to pay
reasonable administrative expenses for the Plan but instead utilized forfeitures to
offset Grainger’s profit-sharing contributions to the Plan. [1] ¶¶ 48–57. In other
words, the Plan Committee skipped Step 1. Id.¶ 46. Plaintiffs allege that such actions
violated ERISA. Id. ¶¶ 93–133.
On May 12, 2025, Plaintiffs filed this instant action against Defendants as well as
the Board of Directors of W.W. Grainger, Inc. (the “Board”). [1]. Plaintiffs’ Complaint
alleges that the Plan Committee (1) failed to follow the Plan Document’s requirement
to prioritize paying reasonable administrative expenses before offsetting employer
contributions (Count I); (2) improperly utilized forfeitures to disloyally reduce future

provisions. [12] at n.2. Plaintiffs do not disagree. For the sake of simplicity and
because Complaint appears to rely on the 2021 version, the Court will cite to the 2021
version when making references to the Plan Document herein.
employer contributions by Grainger (Count II); (3) did not engage in a prudent process
when deciding to use forfeitures for Grainger’s benefit rather than to reduce Plan
expenses (Count III); (4) engaged in fiduciary prohibited transactions by favoring

their own accounts with forfeitures (Count IV); and (5) engaged in prohibited party-
in-interest fiduciary transactions by enriching themselves through forfeitures (Count
V). Id. ¶¶ 6, 93–126. The Complaint further alleges that Grainger and the Board
failed to monitor those responsible on the Plan Committee for allocation of forfeitures
(Count VI). Id. ¶¶ 6, 127–131.
On June 26, 2025, the parties filed a stipulation of dismissal as to the Board only.

[6]. The Court dismissed the Board without prejudice on June 30, 2025. [8].
On July 18, 2025, Defendants moved to dismiss Plaintiffs’ Complaint. [11].
II. Standard
“To survive a motion to dismiss under Rule 12(b)(6), the complaint must provide
enough factual information to state a claim to relief that is plausible on its face and
raise a right to relief above the speculative level.” Haywood v. Massage Envy
Franchising, LLC, 887 F.3d 329, 333 (7th Cir. 2018) (quoting Camasta v. Jos. A. Bank

Clothiers, Inc., 761 F.3d 732, 736 (7th Cir. 2014)); see also Fed. R. Civ. P. 8(a)(2)
(requiring a complaint to contain a “short and plain statement of the claim showing
that the pleader is entitled to relief”). A court deciding a Rule 12(b)(6) motion
“construe[s] the complaint in the light most favorable to the plaintiff, accept[s] all
well-pleaded facts as true, and draw[s] all reasonable inferences in the plaintiff’s
favor.” Lax, 20 F.4th at 1181. However, the court need not accept as true “statements
of law or unsupported conclusory factual allegations.” Id. (quoting Bilek v. Fed. Ins.
Co., 8 F.4th 581, 586 (7th Cir. 2021)). “While detailed factual allegations are not
necessary to survive a motion to dismiss, [the standard] does require ‘more than mere

labels and conclusions or a formulaic recitation of the elements of a cause of action to
be considered adequate.’” Sevugan v. Direct Energy Servs., LLC, 931 F.3d 610, 614
(7th Cir. 2019) (quoting Bell v. City of Chicago, 835 F.3d 736, 738 (7th Cir. 2016)).
Dismissal for failure to state a claim is proper “when the allegations in a
complaint, however true, could not raise a claim of entitlement to relief.” Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 558 (2007). Deciding the plausibility of the claim is

“a context-specific task that requires the reviewing court to draw on its judicial
experience and common sense.” McCauley v. City of Chicago, 671 F.3d 611, 616 (7th
Cir. 2011) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009)).
Additionally, where a defendant asserts a facial challenge to subject matter
jurisdiction and moves to dismiss for lack of standing pursuant to Rule 12(b)(1), the
Court applies Twombly-Iqbal’s “‘plausibility’ requirement.” Silha v. ACT, Inc., 807
F.3d 169, 174 (7th Cir. 2015). In assessing whether a plaintiff has established

standing, the Court accepts as true “all material allegations of the complaint, drawing
all reasonable inferences therefrom in the plaintiff's favor.” Bria Health Servs., LLC
v. Eagleson, 950 F.3d 378, 381–82 (7th Cir. 2020).
III. Analysis
Defendants bring a facial standing challenge under Rule 12(b)(1) and a failure to
state a claim challenge under Rule 12(b)(6). The Court addresses each in turn.
A. Standing
Defendants argue that Plaintiffs lack Article III standing to assert their claims.
[12] at 4–7; [19] at 2–4. To satisfy Article III standing requirements, a plaintiff must

show that (1) he suffered an injury in fact, (2) the injury was likely caused by the
defendant, and (3) the injury would likely be redressed by judicial relief. Lujan v.
Defenders of Wildlife, 504 U.S. 555, 560–61 (1992). At the pleading stage, the plaintiff
bears the burden of establishing these elements. Spokeo, Inc. v. Robins, 578 U.S. 330,
338 (2016).
As noted, Plaintiffs contend that under Section 8.4 of the Plan Document, the Plan

Committee was obligated to utilize forfeitures to pay reasonable administrative
expenses (Step 1) before offsetting Grainger’s contributions to the Plan (Step 2). [1] ¶
96. Plaintiffs maintain they were injured when the Plan Committee disregarded this
language and instead used forfeitures to reduce Grainger’s contributions (Step 2)
without first paying reasonable administrative expenses (Step 1). Id. ¶¶ 20, 47, 69–
72.
Defendants offer a competing view, urging that where an ERISA plan, like the one

here, requires plan participants to bear the costs of administrative expenses, the
participants lack Article III standing to assert a forfeiture claim based on the non-
allocation of forfeitures to those expenses. [12] at 7. They point to Section 6.4 and
Appendix B of the Plan Document in support of this position. The relevant portions
of Section 6.4 and Appendix B read as follows:
Account Maintenance: Account maintenance fees and expenses, may
include, but are not limited to, administrative, Trustee, government
annual report preparation, audit, legal, nondiscrimination testing and
fees for any other special services. Account maintenance fees shall be
charged to Participants on a per Participant basis provided that no fee
shall reduce a Participant’s Account balance below zero.

… As of the Effective Date, a breakdown of which Plan fees and expenses
shall generally be borne by the Trust (and charged to individual
Participants’ Accounts or charged at the Investment Fund level and
reflected in the net gain or loss of each Investment Fund) and those that
shall be paid by the Employer, directly or indirectly, shall be set forth in
Appendix B, which may be changed from time to time by the Committee
without the necessity of formally amending the Plan.

[13-2] § 6.4.

As of the Effective Date, payment of Plan fees and expenses shall be as
follows

… 2) Record-keeping Fees: These are paid by Participants and are
assessed monthly and billed/collected from Accounts quarterly.

…

4) Additional Fees Paid by Participants: Fees for audit expenses,
determination letter requests, postage, production costs for routine
communications and certain third-party legal fees shall be added to the
recordkeeping fees and assessed against Participants' Accounts, per 2)
above. Estimates of the fees shall be determined and reconciled, at least
annually.

Id. at Appendix B.

In view of this language, Defendants argue that Plaintiffs did not suffer an Article
III injury when the Plan Committee did not use forfeitures to pay reasonable
administrative expenses because Section 6.4 and Appendix B hold Plan participants
(like Plaintiffs) exclusively responsible for those expenses. [12] at 6–7. Plaintiffs
oppose this view, asserting that Defendants’ reading of Section 6.4 and Appendix B
“override[s]” Section 8.4. [17] at 7. Defendants, on the other hand, contend that
“Section 8.4 does not override the language of Section 6.4 (and Appendix B).” [12] at
6.
Given the nature of Defendants’ position, whether Plaintiffs have Article III

standing requires the Court to interpret the Plan Document. Because the Plan is an
ERISA-governed plan, the Court applies federal common law rules of contract
interpretation. Schultz v. Aviall, Inc. Long Term Disability Plan, 670 F.3d 834, 838
(7th Cir. 2012). Under these rules, the language of an ERISA plan must be “given its
plain and ordinary meaning, and the plan must be read as a whole, considering
separate provisions in light of one another and in the context of the entire agreement.”

Id. In interpreting an ERISA plan, the first task for the Court is to determine whether
the plan language at issue “is ambiguous or unambiguous.” Neuma, Inc. v. AMP, Inc.,
259 F.3d 864, 873 (7th Cir. 2001). “Contract language is ambiguous if it is susceptible
to more than one reasonable interpretation.” Id. Where the terms of an ERISA plan
document are unambiguous, a court “need not consider extrinsic evidence and should
proceed to declare the meaning of the provision.” Id. (internal quotations omitted).
The Court finds the Plan Document unambiguous as to this issue. Section 8.4

plainly states that “Forfeiture Account amounts shall be utilized to pay reasonable
administrative expenses of the Plan and to restore Accounts for a Plan Year, as
directed by the Committee.” [13-2] § 8.4. Regardless of whether the Plan Committee
was obligated by this language to pay reasonable administrative expenses or was
given discretion to do so (more on this later), Section 8.4 grants, at a minimum, a
contractual ability to allocate forfeitures to offset reasonable administrative
expenses. By alleging that the Plan Committee disregarded this language—resulting
in the Plan and its participants being stuck with the bill—Plaintiffs have sufficiently
alleged an Article III injury.

Section 6.4 and Appendix B do not change this conclusion. While Section 6.4
commands that “[a]ccount maintenance fees shall be charged to Participants on a per
Participant basis,” the definition of “Accounts maintenance fees” does not by default
encompass all administrative expenses, as Defendants contend. Rather, Section 6.4
makes clear that “Account maintenance fees and expenses may include, but are not
limited to, administrative, Trustee, government annual report preparation, [and]

audit” fees, among other possibilities. [13-2] § 6.4. (emphasis added). Similarly, the
Plan Document explicitly qualifies Appendix B by stating that “a breakdown of which
Plan fees and expenses shall generally be borne by the Trust [and] charged to
individual Participants’ Accounts … shall be set forth in Appendix B.” Id. (emphasis
added). So, while Section 6.4 charges Plan participants with “[a]ccount maintenance
fees,” such fees, by definition, do not automatically mean all administrative expenses.
As a result, Section 6.4 does not “override” Section 8.4’s contractual ability to assign

“reasonable administrative expenses” to be paid for by forfeitures.
Nor does Section 8.4 “override” Section 6.4 and Appendix B. The provisions,
rather, act in tandem. Forfeitures “shall be utilized” to pay “reasonable
administrative expenses” per Section 8.4’s instruction. Id. § 8.4. At the same time,
Plan participants “shall be charged” with “[a]ccount maintenance fees,” which “may
include” (or “generally” include) administrative expenses not offset by forfeitures
(e.g., if no forfeitures are present) or “may include” administrative expenses offset by
forfeitures pursuant to Section 8.4. Id. § 6.4. In other words, Section 8.4 operates first
in the payment waterfall, covering “reasonable administrative expenses,” while

Section 6.4 operates afterward, covering the remainder. By contrast, a reading that
Section 6.4 holds Plan participants exclusively responsible for administrative
expenses leads to an unreasonable result. Specifically, if Section 6.4’s directive that
administrative expenses “shall be charged to Participants” was interpreted to mean
Plan participants must bear 100% of administrative expenses without application of
forfeitures, Section 8.4’s mandate that forfeitures “shall be utilized to pay reasonable

administrative expenses” would be effectively nullified. Hess v. Hartford Life &
Accident Ins. Co., 274 F.3d 456, 462 (7th Cir.2001) (declining to interpret an ERISA
plan to render a word superfluous).
In sum, the only reasonable interpretation that honors the plain language and
structure of the Plan Document is one where Section 6.4 does not cause Plan
participants to automatically bear 100% of administrative expenses but instead that
administrative expenses charged to Plan participants under Section 6.4 can first be

subject to forfeiture offsets from Section 8.4. And because Plaintiffs allege that offsets
from Section 8.4 were never applied by the Plan Committee, they allege an Article III
injury.
For these reasons, Defendants’ Rule 12(b)(1) challenge is denied.
B. Failure to State a Claim
i. Counts I-III (Breach of Fiduciary Duty)
To state a breach of fiduciary duty claim against the Plan Committee, Plaintiffs
must plead facts plausibly alleging that (i) the Plan Committee was acting in a
fiduciary capacity, (ii) it breached a fiduciary duty, and (iii) the breach harmed the

Plan. Appvion, Inc. Ret. Sav. & Emp. Stock Ownership Plan ex rel. Lyon v. Buth, 99
F.4th 928, 942–943 (7th Cir. 2024). Defendants argue that the Complaint fails to meet
any of these elements. The Court disagrees.
1. The Plan Committee Was Acting in a Fiduciary
Capacity

Defendants first argue that Counts I-III do not implicate fiduciary functions. [12]
at 11–12. According to Defendants, Counts I-III are best characterized as challenges
to the Plan Document’s terms requiring participants to pay for the Plan’s
administrative expenses—not challenges the Plan Committee’s allocation of
forfeitures—and consequently implicate settlor functions. Id.
Fiduciary duties “consist of such actions as the administration of the plan’s
assets.” Hutchins v. HP, Inc., (“Hutchins I”) 737 F. Supp. 3d 851, 860 (N.D. Cal. 2024)
(quoting Hughes Aircraft Co. v. Jacobson, 525 U.S. 432, 444 (1999)). By contrast,
settlor duties include decisions “regarding the form or structure of the Plan such as
who is entitled to receive Plan benefits and in what amounts, or how such benefits
are calculated.” Id. (quoting Hughes Aircraft, 525 U.S. at 444).
The Court disagrees with Defendants’ characterization of Counts I-III. Plaintiffs

are not challenging decisions regarding the design of the Plan. Rather, they are
attacking the Plan Committee’s decision on how to apply forfeited Plan assets. [1] ¶
95 (“The Plan Committee violated its fiduciary duties … by failing to prioritize paying
Plan administrative expenses before using Plan forfeitures to offset or reduce their
own company profit-sharing or other employer contributions as required by the Plan
in Section 8.4 of the Plan document.”); see also id. ¶¶ 104, 111, 112. Put differently,

Plaintiffs challenge not the decision to include the language of Section 8.4 in the Plan
Document, but the Plan Committee’s implementation of that language. Attacks on
the implementation of an ERISA plan’s written provisions implicate fiduciary, not
settlor, functions. Herman v. Cent. States, Se. & Sw. Areas Pension Fund, 423 F.3d
684, 695 (7th Cir. 2005) (“The fiduciary duty of a plan administrator is to implement
faithfully the provisions of the plan as written.”) (internal quotations and citation

omitted); Dimou v. Thermo Fisher Scientific Inc. (“Dimou I”), No. 23-CV-1732, 2024
WL 4508450, at *8 (S.D. Cal. Sept. 19, 2024) (“[A]lthough the decision to include a
plan term setting forth various permissible uses for forfeitures is a settlor function,
implementing that decision is a fiduciary function.”) (citing Hutchins I, 737 F.Supp.
at 861).
Because Plaintiffs have plausibly pled that the Plan Committee’s actions
implicated fiduciary functions, the Court declines to dismiss Counts I-III on this

basis.
2. The Plan Committee Breached Its Fiduciary
Duties

Defendants next contend that Plaintiffs have failed to allege any breach of
fiduciary duty by the Plan Committee. [12] at 8–13; [19] at 5–10. As Defendants’
arguments differ slightly for each of Counts I, II, and III, the Court addresses each
in turn.
a. Count I (Failure to Follow the Plan)
ERISA requires fiduciaries to “discharge their duties ... in accordance with the
documents and instruments governing the plan.” Su v. Johnson, 68 F.4th 345, 352

(7th Cir. 2023) (citing 29 U.S.C. § 1104(a)(1)(D)). The rule aims to ensure that “every
employee may, on examining the plan documents, determine exactly what his rights
and obligations are under the plan.” Young v. Verizon’s Bell Atl. Cash Balance Plan,
667 F. Supp. 2d 850, 894 (N.D. Ill. 2009) (quoting Curtiss-Wright Corp. v.
Schoonejongen, 514 U.S. 73, 83 (1995))
Defendants contend that Plaintiffs do not plausibly allege that the Plan

Committee failed to comply with the terms of the Plan Document. [12] at 12–13; [19]
at 5–6. In support, Defendants again rely on Section 6.4 and Appendix B to assert
that Plan participants are exclusively responsible for administrative expenses. Id.
For the reasons explained, the Court finds this position unpersuasive. Supra § III.A.
As an alternative, Defendants contend that the phrase “as directed by the
Committee” in Section 8.4 gives discretion to the Plan Committee to determine
whether to allocate forfeitures to pay reasonable administrative expenses. [19] at 6.

The Plan Committee, therefore, did not violate the language of the Plan Document
when it decided not to do so. Id. Plaintiffs disagree with Defendants’ interpretation.
[17] at 6, 9.
Defendants’ argument again requires the Court to interpret the Plan Document’s
terms. Like before, the Court applies federal common law rules of contract
interpretation. Schultz, 670 F.3d at 838. In doing so, the Court must read the Plan
Document as a whole, “considering separate provisions in light of one another and in
the context of the entire agreement.” Id. “If the plan document is unambiguous, it can
be construed as a matter of law.” Michael v. First Com. Bank, 69 F. App’x 801, 805

(7th Cir. 2003) (citation omitted).
The Court begins its interpretive task by discussing an entity that has not yet
been mentioned: the Trustee. The Trustee is the trustee of the trust established in
connection with the Plan. [13-2] § 1.56; 1.57. “All Plan assets” are “held by the Trustee
in trust for use in providing Plan benefits and paying Plan fees and expenses not paid
directly by the Employer.” Id. § 15.1. While the Trustee can sometimes act on its own

with respect to such assets, see e.g., id. § 15.2 (“The Trustee may establish reasonable
limits on the number of Investment Funds…”), the Plan Document regularly requires
the Plan Committee to direct2 the Trustee regarding the administration of assets. Id.
§ 3.4(c)(iv)(“the Committee shall direct the Trustee to distribute…”); id. § 4.2 (“The
Committee may instruct the Trustee to receive…”); id. § 14.8(c) (“[Committee
members may] give written direction to the Trustee in the performance of its duties.”);
id. § 15.5 (“The Committee may direct the Trustee to split an Investment Fund ...”);

id. § 15.7 (“The Committee shall instruct the Trustee…”). This includes directions for
the Trustee to distribute amounts from Forfeiture Accounts held by the Trustee. Id.
§ 6.6 (“the Committee may direct the Trustee to use amounts from the Forfeiture

2Directions from a fiduciary (here, the Plan Committee) to a trustee are contemplated
in ERISA. See e.g., 29 U.S.C § 1103(a)(1) (trustees can be “subject to proper directions
of [another] fiduciary which are made in accordance with the terms of the plan.”).
Account”); id. § 16.6 (“The Committee shall … direct the Trustee to pay the amount
from the Forfeiture Account.”).
With this context in mind, the meaning of “Forfeiture Account amounts shall be

utilized to pay reasonable administrative expenses of the Plan and to restore
Accounts for a Plan Year, as directed by the Committee” is clear. The term “shall be
utilized” establishes an obligation to “pay reasonable administrative expenses of the
Plan and to restore Accounts for a Plan Year.” The phrase “as directed by the
Committee,” on the other hand, establishes who must issue instructions to the
Trustee to make those payments—here, the Plan Committee. In other words, the Plan

Committee must “direct” the Trustee to “pay reasonable administrative expenses.”
This obligation is not discretionary. If it were, the “shall be utilized” language would
be rendered superfluous. That cannot be the case. Hess, 274 F.3d at 462.
In sum, the phrase “Forfeiture Account amounts shall be utilized to pay
reasonable administrative expenses of the Plan and to restore Accounts for a Plan
Year, as directed by the Committee” in Section 8.4 of the Plan Document mandates
the Plan Committee to first utilize forfeitures to pay reasonable administrative

expenses before offsetting Grainger’s employer contributions. Therefore, Plaintiffs’
allegation that the Plan Committee failed to do so, [1] ¶¶ 48–59, sufficiently alleges
a failure to follow the language of the Plan Document.
The final argument made by Defendants is that Section 14.5 of the Plan Document
gives the Plan Committee discretion to interpret the Plan. [19] at 6. And because
Defendants contend their interpretation of Section 8.4 is plausible, the Plan
Committee’s decision to skip Step 1 was not a breach of fiduciary duty. Id. As an
initial matter, this argument was not presented in Defendants’ opening brief and so
the Court cannot consider it. Eberhardt v. Walsh, 122 F.4th 681, 687 n.4 (7th Cir.

2024). In addition, it is unpersuasive. A court should defer to a plan administrator’s
interpretation of “plan’s governing instruments unless arbitrary and capricious.”
Bator v. Dist. Council 4, 972 F.3d 924, 929 (7th Cir. 2020). An interpretation is not
“arbitrary and capricious if it falls within the range of reasonable interpretations” or
if it is “compatible with the language and the structure of the plan document.” Id.
(citations omitted). An interpretation that defies a plan’s “plain language,” however,

is arbitrary and capricious. Id. Here, the “plain language” of the Plan Document does
not permit the Plan Committee to skip Step 1. The Plan Committee’s decision to do
so, therefore, cannot be given deference.
b. Count II (Duty of Loyalty)
The duty of loyalty “requires a plan fiduciary to ‘discharge his duties with respect
to a plan solely in the interest of the participants and beneficiaries,’ with ‘the
exclusive purpose’ of ‘providing benefits to participants and their beneficiaries’ and

‘defraying reasonable expenses of administering the plan.’” Albert v. Oshkosh Corp.,
47 F.4th 570, 582 (7th Cir. 2022) (quoting 29 U.S.C. § 1104(a)(1)(A)). “Among other
things, the duty of loyalty requires the fiduciary to deal fairly and honestly with
beneficiaries … so as to ensure that a plan receives all funds to which it is entitled.”
Cunningham v. Cornell Univ., 604 U.S. 693, 696 (2025) (internal citations and
quotations omitted).
Defendants assert that Plaintiffs do not plausibly allege that the Plan Committee
breached its duty of loyalty. [12] at 8–11; [19] at 6–9. Defendants’ argument relies
heavily on a growing number of district court decisions3 rejecting forfeiture fiduciary

breach claims. Id. Those decisions—which primarily hinge on the reasoning from
Hutchins I and II—were all based on plan document language that gave the
defendant fiduciaries discretion as to how to allocate forfeitures. See e.g., Hutchins II,
767 F. Supp. 3d at 922 (“the company retains discretion over whether to pay Plan

3Defendants cite McWashington v. Nordstrom, Inc., No. C24-1230 TSZ, 2025 WL
1736765 (W.D. Wash. June 23, 2025); Matula v. Wells Fargo & Co., No. CV 24-3703
(JRT/DJF), 2025 WL 1707878 (D. Minn. June 18, 2025); Wright v. JPMorgan Chase
& Co, No. 2:25-CV-00525-JLS-JC, 2025 WL 1683642 (C.D. Cal. June 13, 2025); Steen
v. Sonoco Prods. Co., No. 4:24-CV-03105-JD, 2025 WL 2420725 (D.S.C. June 4, 2025);
Bozzini v. Ferguson Enters. LLC, No. 22-CV-05667-AMO, 2025 WL 1547617 (N.D.
Cal. May 29, 2025); Madrigal v. Kaiser Found. Health Plan, Inc., No. 2:24-CV-05191-
MRA-JC, 2025 WL 1299002 (C.D. Cal. May 2, 2025); Sievert v. Knight-Swift
Transportation Holdings, Inc., 780 F. Supp. 3d 870, 876 (D. Ariz. 2025); Barragan v.
Honeywell Int’l Inc., No. 24CV4529 (EP) (JRA), 2024 WL 5165330 (D.N.J. Dec. 19,
2024); Dimou I; Hutchins v. HP Inc. (“Hutchins II”), 767 F. Supp. 3d 912 (N.D. Cal.
2025); and Naylor v. BAE Sys., Inc., No. 1:24-CV-00536 (AJT/WEF), 2024 WL
4112322 (E.D. Va. Sept. 5, 2024) in their briefing. [12] at n.5.

Defendants’ notices of supplemental authority [22], [23], and [28] cite Dimou v.
Thermo Fisher Sci. Inc. (“Dimou II”), 2025 WL 2611240 (S.D. Cal. Sept. 9, 2025);
Estay v. Ochsner Clinic Found., No. CV 25-507, 2025 WL 2644782 (E.D. La. Sept. 15,
2025); Armenta v. WillScot Mobile Mini Holdings Corp., No. CV-25-00407-PHX-MTL,
2025 WL 2645518 (D. Ariz. Sept. 15, 2025); Polanco v. WPP Grp. USA, Inc., No. 24-
CV-9548 (JGK), 2025 WL 3003060 (S.D.N.Y. Oct. 27, 2025); Del Bosque v. Coca-Cola
Sw. Beverages LLC, No. 3:25-CV-01270-X, 2025 WL 3171326 (N.D. Tex. Nov. 13,
2025); Hernandez v. AT&T Servs., Inc., No. 2:25-CV-00676-ODW (PVCX), 2025 WL
3208360 (C.D. Cal. Nov. 14, 2025); Brown v. Peco Foods, Inc., No. 3:25-CV-491-TSL-
RPM, 2025 WL 3210857 (S.D. Miss. Nov. 14, 2025); Garner v. Northrop Grumman
Corp., No. 1:25-CV-00439 (AJT/WEF), 2025 WL 3488657 (E.D. Va. Dec. 4, 2025);
Brewer v. All. Coal, LLC, No. 24-CV-0406-CVE-SH, 2025 WL 3527171 (N.D. Okla.
Dec. 9, 2025); and Donelson v. Meijer Inc., No. 1:25-CV-1156, 2025 WL 3754241 (W.D.
Mich. Dec. 29, 2025).
expenses out of the Plan trust”); Dimou II, 2025 WL 2611240, at *6 (the “Plan
documents themselves … state that the company retains discretion over how to
utilize forfeitures.”). In view of this discretion, those district courts held that a

fiduciary does not breach its duty of loyalty by discretionarily choosing to apply
forfeitures to employer contributions rather than to pay administrative costs. See e.g.,
Polanco, 2025 WL 3003060, at *7 (“a fiduciary does not breach the duty of loyalty
merely by exercising discretion expressly granted to it by the Plan document to deny
participants a gratuity that the Plan document does not guarantee.”). Holding
otherwise, the district courts reasoned, would “stretch the fiduciary duties of loyalty

and prudence beyond the law and to create benefits beyond what was promised in the
Plan itself,” Hutchins II, 767 F. Supp. 3d at 923, and “would impose categorical
liability any time a fiduciary chooses to [discretionarily] use forfeitures to reduce its
own contributions.” Peco Foods, 2025 WL 3210857, at *7 (citation omitted). This
“broad reach” made the plaintiffs’ theories in those cases implausible. Hutchins I, 737
F. Supp. 3d at 862.
These considerations are not present here. Unlike the cases cited by Defendants,

Section 8.4 of the Plan Document does not give discretion as to how the Plan
Committee can allocate forfeitures. It instead mandates the Plan Committee to utilize
forfeitures to pay reasonable administrative expenses (Step 1) before offsetting
employer contributions (Step 2). See Wright, 2025 WL 1683642, at *5 (noting the
theory advanced in “Hutchins and its progeny” is “meaningfully different” from cases
where plaintiffs “alleged that the defendants’ use of forfeitures violated the express
terms of the plans at issue.”). The duty of loyalty, therefore, is not being “stretched”
to create an additional benefit. Rather, the Plan Document is structured to guarantee
Plan participants the benefit of covering administrative expenses via forfeitures in

the first instance. Put differently, present here is a promised benefit to Plan
participants. In view of this “context,” Hutchins I, 737 F. Supp. 3d at 862, Plaintiffs’
allegation that the Plan Committee skipped Step 1 and went straight to Step 2
plausibly alleges that the Plan Committee did not in fact act “for the exclusive
purpose of … providing benefits to participants and their beneficiaries” but instead
put Grainger’s interests first. 29 U.S.C. § 1104(a)(1). This is sufficient to allege a

breach of the duty of loyalty. Hutchins II, 767 F. Supp. 3d at 922 (“an ERISA
fiduciary’s duty is to ensure that all participants have received the full benefit
guaranteed to them by the plan documents.”); Lockheed Corp. v. Spink, 517 U.S. 882,
887 (“ERISA ... seek[s] to ensure that employees will not be left empty-handed once
employers have guaranteed them certain benefits.”).
Defendants nevertheless maintain that a long history of Treasury Department
regulations—including 26 C.F.R. § 1.401-7(a) and Use of Forfeitures in Qualified

Retirement Plans, 88 FR 12282-01 (proposed Feb. 27, 2023)—permitting the use of
forfeitures to offset company contributions make Plaintiffs’ claim for breach of the
duty of loyalty implausible. [12] at 8–9. Those Treasury Department regulations,
however, are not binding on this matter. Hutchins I, 737 F. Supp. 3d at 859
(explaining that 26 C.F.R. § 1.401-7 “do[es] not extend to profit-sharing and stock
bonus plans”)4 (citing Rev. Rul. 71-313, 1971-2 C.B. 203 (1971)); Perez-Cruet v.
Qualcomm Inc., No. 23-CV-1890-BEN (MMP), 2024 WL 2702207, at *7 (S.D. Cal. May
24, 2024) (the proposed February 27, 2023 Treasury Department regulation “has no

force of law.”)5. Nor are they incompatible with Plaintiffs’ claim. As explained by the
Hutchins I court, “[t]he Treasury Department and Congress have long understood
that forfeitures in defined contribution plans ‘could be reallocated to the remaining
participants under a nondiscriminatory formula, used to reduce future employer
contributions, or used to offset administrative expenses of the plan.’” 737 F. Supp. 3d
at 863 (quoting Use of Forfeitures in Qualified Retirement Plans, 88 Fed. Reg. at

12283). The use of “or” indicates not all options need to be pursued. As such, a plan
document that restricts a fiduciary to one of the three options (or, like here, requires
a fiduciary to pursue one option before pursuing another) does not conflict with this
understanding.
To be sure, the Court recognizes Defendants’ point that, in some situations,
allocating forfeitures to offset Grainger’s employer contributions instead of paying
reasonable administrative expenses (i.e., skipping Step 1) is in the best interests of

4The Plan Document states that “The Plan is intended to constitute a qualified profit
sharing plan.” [13-2] at Preamble.

5Plaintiffs’ response brief also references Definitions of Qualified Matching
Contributions and Qualified Nonelective Contributions, 83 Fed. Reg. 34469 (July 20,
2018) (“in the common case of a plan that provides that forfeitures will be used to pay
plan expenses incurred during a plan year and that any remaining forfeitures in the
plan at the end of the plan year will be allocated pursuant to a specified formula…”).
[17] at 11. It is unclear to the Court why Plaintiffs mention this regulation, as it does
not appear to be referenced in Defendants’ opening brief. Regardless, this Treasury
regulation relates only to qualified matching contributions (“QMACs”) and qualified
nonelective contributions (“QNECs”), neither of which are at issue here.
Plan participants (and thus not a breach of the duty of loyalty). [12] at 11; see also
[13-3] at 21 (the Department of Labor noting the same). Plaintiffs recognize this
possibility too. [17] at 12. Such a decision would, of course, violate Section 8.4 of the

Plan Document. But if the decision was truly in the best interests of the Plan and its
participants, it would trump those obligations. Urlaub v. CITGO Petroleum Corp.,
750 F. Supp. 3d 863, 876 (N.D. Ill. 2024) (“when an ERISA fiduciary’s duty … conflicts
with the terms of a plan document, ‘the duty [] trumps the instructions of a plan
document.’”) (quoting Fifth Third Bancorp v. Dudenhoeffer, 573 U.S. 409, 421 (2014)).
Whether this situation occurred in the present case, however, is unfit for

resolution at this stage in the proceedings. “Only obvious alternative explanations
must be overcome at the pleadings stage.” Hughes v. Nw. Univ., 63 F.4th 615, 629
(7th Cir. 2023). “[W]hether a claim survives dismissal necessarily depends on the
strength or obviousness of the alternative explanation that the defendant provides.”
Id. The only alternative explanation offered by Defendants for the Plan Committee’s
conduct is that “requiring the Committee to use the forfeitures to pay for the Plan’s
administrative expenses would have potentially jeopardized the participants’

contractually promised benefits.” [12] at 11 (internal quotations omitted). While this
alternative explanation warrants further inquiry during discovery, it is not obvious
at this point. Nor is it clear what “contractually promised benefits” were “jeopardized”
or why prioritization of those benefits over the contractual benefits conferred on Plan
participants by Section 8.4 was in the best interests of Plan participants.
In short, a finding that the Plan Committee’s decision to allocate forfeitures to
offset Grainger’s employer contributions was in the best interests of Plan and its
participants necessarily involves a factual investigation. On a motion to dismiss, a

court “must draw all reasonable inferences in the plaintiff's favor.” Virnich v.
Vorwald, 664 F.3d 206, 212 (7th Cir. 2011). And the reasonable inference drawn here
is that the Plan Committee’s decision to ignore Section 8.4’s contractual promise to
offset reasonable administrative expenses via forfeitures was not in the best interests
of the Plan and its participants. Defendants, of course, are free to challenge this after
further factual development. But at this stage, this is enough to allege a plausible

claim for breach of the duty of loyalty.
c. Count III (Duty of Prudence)

The duty of prudence requires a fiduciary to act “with the care, skill, prudence,
and diligence under the circumstances then prevailing that a prudent person 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.” Allen v. GreatBanc Tr. Co., 835
F.3d 670, 678 (7th Cir. 2016) (citing 29 U.S.C. § 1104(a)(1)(B)). “To plead a breach of
the duty of prudence under ERISA, a plaintiff must plausibly allege fiduciary
decisions outside a range of reasonableness,” which will “depend on the circumstances
prevailing at the time the fiduciary acts.” Hughes, 63 F.4th at 630 (cleaned up).
Defendants assert that Plaintiffs do not plausibly allege that the Plan Committee
breached its duty of prudence. [12] at 8–11; [19] at 6–10. In support, Defendants again
rely on the same Treasury Department regulation and “stretching” of fiduciary duty
arguments asserted with respect to the duty of loyalty. Id. For the reasons explained,
the Court finds those arguments unpersuasive. Supra § III.B.i.2.b.
Defendants make two additional arguments. They first contend that Plaintiffs are

essentially alleging that it was per se imprudent for the Plan Committee to use
forfeitures to offset company contributions and therefore ignore the “context specific
considerations” required during a prudence inquiry. [12] at 10; [19] at 9. Plaintiffs’
allegations, however, do give context: the Plan Document mandates that forfeitures
must first be applied toward reasonable administrative expenses before being used
to reduce Grainger’s employer contributions. [1] ¶¶ 58, 64 72, 79. By failing to

consider the effect of this benefit when deciding to allocate forfeitures to offset
Grainger’s contributions, the Plan Committee was imprudent. Id. ¶¶ 39, 112, 113.
And while Defendants propose alternative, prudent explanations for the Plan
Committee’s conduct, including concerns about timely receipt of contributions and
reliance on widely-adopted Treasury regulations permitting allocation of forfeitures
to company contributions, [19] at 9–10, none of these are sufficiently “obvious” to
compel the Court at this stage to conclude that the Plan Committee acted prudently.

Hughes, 63 F.4th at 629. Rather, the only obvious alternative explanation for the Plan
Committee’s conduct would be if Grainger had an inability to satisfy its matching
contributions. [1] ¶¶ 66, 67. But Plaintiffs allege that this was not the case. Id.
Defendants also contend that Plaintiffs’ prudence allegations are conclusory and
do not raise a reasonable inference that the Plan Committee is liable for the
misconduct alleged. [12] at 9; [19] at 10. The Court disagrees. Within the context
alleged, Plaintiffs have raised a plausible inference that the Plan Committee used an
imprudent and flawed process in determining how forfeitures would be allocated. [1]
¶¶ 39, 72, 79, 112, 113. While additional details about the Plan Committee’s process

would be better, “an ERISA plaintiff alleging breach of fiduciary duty does not need
to plead details to which she has no access, as long as the facts alleged tell a plausible
story.” Allen, 835 F.3d at 678. And here there is a plausible story that the Plan
Committee’s actions violated the duty of prudence.
Because Plaintiffs have plausibly pled that the Plan Committee’s actions breached
their fiduciary duties, the Court declines to dismiss Counts I-III on this basis.

3. The Plan Committee’s Breach Harmed the Plan
Defendants finally argue that Plaintiffs have not plausibly alleged any loss to the
Plan. [12] at 11; [19] at 11. Plaintiffs do not address this point in their response brief,
[17], so Defendants contend that Plaintiffs waived any argument to the contrary. [19]
at 11. Defendants, however, cannot simply rely on waiver to prevail. Defendants still
bear the burden on a motion to dismiss and must persuasively demonstrate that
Plaintiffs have failed to state a claim. Cline v. FitzMark Chicago, Inc., No. 21 CV

04253, 2023 WL 2711615, at *8 (N.D. Ill. Mar. 30, 2023); Marcure v. Lynn, 992 F.3d
625, 631 (7th Cir. 2021).
Defendants base their position on two interrelated points. They first argue that
Plaintiffs do not allege that they ever received less in contributions than provided for
by the Plan. [12] at 11. Defendants then assert that ERISA does not require a
company to make additional contributions each time an employee separates and
forfeits unvested benefits. Id. Viewed together, Defendants essentially contend that
no harm flowed from the Plan Committee’s decision not to prioritize paying
reasonable administrative expenses because Grainger made all its required employer

contributions to the Plan between 2019 to 2023. This argument misconstrues
Plaintiffs’ Complaint. Plaintiffs do not allege a right to receive additional employer
contributions from Grainger. They instead allege that the “deduction of Plan expenses
from the participants’ accounts reduces the funds available to participants for
distribution and/or investing” thereby “depriv[ing] the Plan of funds that otherwise
would have been earned on the amounts deducted.” [1] ¶ 70. In other words, Plaintiffs

challenge not Grainger’s contribution levels but a decrease in funds held by the Plan
due to administrative expense payments. And this decrease, Plaintiffs allege, flowed
directly from the Plan Committee’s failure to follow Section 8.4 of the Plan Document.
Id. ¶¶ 58–59.
An example might work best here. Say the Plan held $100 of non-forfeited funds
and $20 in forfeitures in 2019. And say that in 2019, Grainger was required to make
$50 in employer contributions and there was $10 in reasonable administrative

expenses. If the Plan Committee utilized forfeitures to pay reasonable administrative
expenses before offsetting Grainger’s contributions, the result would be $150 in non-
forfeited funds left over ($20 - $10 = $10. $100 + $10 + $(50-10) = $150). But if the
Plan Committee just utilized forfeitures to offset Grainger’s contributions, the result
would be $140 in non-forfeited funds left over ($100 - $10 = $90. $90 + $20 + $(50-20)
= $140). A $50 “net” contribution occurs in both scenarios, yet the Plan is left with
$10 less in the latter. Whether this is characterized as a decrease in Plan funds ($140
versus $150) or a reduction in Grainger’s portion of the net contributions ($(50-20 =
30) versus $(50-10 = 40)) is semantic. Mathematically, the Plan loses in the second

scenario.
Because Plaintiffs have plausibly pled that the Plan Committee’s actions harmed
the Plan, the Court declines to dismiss Counts I-III on this basis.
ii. Counts IV and V (Prohibited Transactions)
In Counts IV and V, Plaintiffs allege that the Plan Committee engaged in
prohibited transactions under 29 U.S.C. § 1106(a) (between a plan and a party in

interest) and 1106(b) (between a plan and a fiduciary). ERISA regulates the conduct
of plan fiduciaries, “placing certain transactions outside the scope of their lawful
authority.” Spink, 517 U.S. at 888. To sufficiently allege a violation of 29 U.S.C. §
1106, an ERISA plaintiff must identify a “transaction.” 29 U.S.C. § 1106; Spink, 517
U.S. at 888.
Defendants argue that Plaintiffs fail to allege a violation of 29 U.S.C. § 1106(a)
and 1106(b) because they have not identified any “transaction” within the meaning

of 29 U.S.C. § 1106.6 [12] at 13–14. The Court agrees. The reasoning in Buescher v.
N. Am. Lighting, Inc., 791 F. Supp. 3d 873 (C.D. Ill. 2025) is particularly helpful on
this issue. As the Buescher court explained, “[t]he prohibited transaction rules focus

6Defendants also contend that allocating forfeitures to participants through
contributions is not “prohibited.” [12] at 14–15. Because the Court finds that Counts
IV and V fail to allege a “transaction” within the meaning of 29 U.S.C. § 1106, the
Court does not address this argument.
primarily on the relationship between the benefit plan and other parties to a
transaction, and the section prohibits transactions where those dealing with the plan
may have conflicting interests which could lead to self-dealing.” Id. at 897 (quoting

Leigh v. Engle, 727 F.2d 113, 123 (7th Cir. 1984)). “Thus, as most commonly
understood, transactions tend to involve multiple parties and some sort of exchange
between them.” Id. (citing Transaction, Merriam Webster Dictionary,
https://www.merriam-webster.com/dictionary/transaction).
Plaintiffs do not allege any facts indicating that forfeitures were exchanged with
another party. Instead, the Complaint establishes that forfeitures remained in the

Plan and were simply shifted to other employees in the form of contributions. [1] ¶¶
20, 37–39, 63, 77, 118, 124. Movement of funds within a plan “does not fit neatly
within the plain meaning of ‘transaction.’” Buescher, 791 F. Supp. 3d at 897. Nor does
movement of funds inside a plan clearly fall within the types of “transactions”
prohibited by 29 U.S.C. § 1106. Spink, 517 U.S. at 892-93 (explaining that Section
1106 is directed to “commercial bargains” such as leasing, sales, exchanges of
property, money lending, credit extensions, and furnishing goods and services, which

put plan funds at risk if they are not conducted at arm’s length). See also
McWashington, 2025 WL 1736765, at *16 (“When, as here, the forfeited funds have
not been withdrawn from the Plan, but rather redistributed among participants’
accounts, the type of self-dealing transaction that animated the enactment of ERISA
§ 406(b)(1) is not present.”).
Finally, though not by itself decisive, the Court notes that Plaintiffs’ prohibited
transaction theory yields absurd implications. Plaintiffs acknowledge that once
reasonable administrative expenses are paid, the Plan Committee can use forfeitures

to offset Grainger’s employer contributions. [1] ¶ 46. Yet Counts IV and V would
characterize this conduct as a prohibited transaction. Id. ¶¶ 118, 123. In fact,
Plaintiffs’ theory seems to classify any intra-plan transfer of funds to offset employer
contributions—even if expressly permitted in a plan—as a violation of 29 U.S.C. §
1106. The broad reach of Plaintiffs’ theory is untenable. O’Kane v. Apfel, 224 F.3d
686, 691 (7th Cir. 2000) (“When construing statutes, courts should ‘avoid absurd and

unjust consequences.’”) (quoting Grebe v. Wheeler Catering Co. (In re Andrews), 172
F.2d 996, 999 (7th Cir.1949)); see also Buescher, 791 F. Supp. 3d at 897 (noting that
“[a] broader view of ‘transactions,’ under which any moving of funds within a plan
qualifies, would no longer ‘supplement,’ but fully subsume the fiduciary duties”
contemplated under 29 U.S.C. § 1104).
For the reasons above, the Court dismisses Plaintiffs’ prohibited transaction
claims. Because the problem with Counts IV and V is legal, and not factual, in nature,

the Court concludes that amendment would be futile. Thus, dismissal of Counts IV
and V is with prejudice.
iii. Count VI (Failure to Monitor)
In Count VI, Plaintiffs allege that Grainger failed to adequately monitor the
individuals responsible for the allocation of forfeitures on the Plan Committee to
ensure that they were adequately performing their fiduciary obligations. [1] ¶¶ 127–
133. “Individuals who appoint ERISA fiduciaries have a duty to monitor those
fiduciaries’ actions and to provide them with the information necessary to carry out
their responsibilities.” Bartnett v. Abbott Lab’ys, No. 20-CV-02127, 2021 WL 428820,

at *5 (N.D. Ill. Feb. 8, 2021) (quoting Brieger v. Tellabs, Inc., 629 F. Supp. 2d 848, 867
(N.D. Ill. 2009)). This duty requires, according to the Department of Labor, reviewing
“the performance of trustees and other fiduciaries” at “reasonable intervals” and “in
such [a] manner as may be reasonably expected to ensure that their performance has
been in compliance with the terms of the plan and the statutory standards, and
satisfied the needs of the plan.” Id. (quoting 29 C.F.R. § 2509.75–8 at FR–17

(Department of Labor questions and answers)).
Defendants bring two challenges to Count VI. They first note that failure to
monitor claims are derivative and therefore must be dismissed where the underlying
fiduciary duty claims fail. [12] at 15. While Defendants are correct on the law, Albert,
47 F.4th at 583, this argument is inapplicable here as the underlying fiduciary breach
claims have survived dismissal.
Defendants alternatively argue that Plaintiffs’ failure to monitor claim should be

dismissed because the Complaint lacks any factual allegations plausibly
demonstrating a failure to monitor. [12] at 15. Plaintiffs do not address this point in
their response to Defendants’ motion to dismiss, [17] at 15, so Defendants contend
that Plaintiffs have waived any argument to the contrary. [19] at 12. Again,
Defendants cannot just rely on waiver to prevail and still bear the burden to
demonstrate the Complaint’s insufficiency. Cline, 2023 WL 2711615, at *8; Marcure,
992 F.3d at 631. Like before, Defendants fail to meet this burden. The Complaint
alleges that Grainger “fail[ed] to monitor and evaluate the performance of individuals
responsible for allocation of Plan forfeitures on the Plan Committee or have a system

in place for doing so,” “fail[ed] to investigate the proper use of Plan forfeitures,” and
“fail[ed] to remove individuals responsible for Plan forfeitures on the Plan Committee
whose performance was inadequate.” [1] ¶ 131. Contrary to Defendants’ assertions,
these allegations are not conclusory but factually descriptive and plausibly allege that
Grainger failed to use their supervisory authority over the Plan Committee to stop
the Plan Committee from using forfeitures to offset Grainger’s employer

contributions in violation of Section 8.4. True, additional specifics regarding
Grainger’s monitoring process would have been better. But the Court cannot fault
Plaintiffs for not pleading information that they do not have. Allen, 835 F.3d at 678.
At this stage, these allegations are sufficient to state a failure to monitor claim.
Lucero v. Credit Union Ret. Plan Ass’n, No. 22-CV-208-JDP, 2023 WL 2424787, at *5
(W.D. Wis. Mar. 9, 2023) (finding similar allegations sufficient to survive dismissal).
Because Plaintiffs plausibly allege that Grainger failed to monitor the Plan

Committee, the Court declines to dismiss Count VI on this basis.
IV. Conclusion
For the stated reasons, Defendants’ Motion to Dismiss [11] is granted in part.
Counts IV and V are dismissed with prejudice. Counts I, II, III, and VI survive. In
person status set for February 4, 2026 at 9:30 AM.
ENTER:

/4f
Dated: January 26, 2026 Mug Vf bt L/
MARY M. ROWLAND
United States District Judge

31

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/11247713. Public record. Not legal advice.