Estay

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF LOUISIANA

MEGAN ESTAY ET AL. CIVIL ACTION

VERSUS NO: 25-507

OCHSNER CLINIC FOUNDATION ET AL. SECTION “H”

ORDER AND REASONS

Before the Court is Defendants’ Second Motion to Dismiss (Doc. 46). For

the following reasons, the Motion is GRANTED.

BACKGROUND

Plaintiffs Megan Estay and Francesca Messore, long-time employees of

Defendant Ochsner Clinic Foundation (“Ochsner”), bring this action on behalf

of a class of current and former Ochsner employees who participated in its

retirement 401k Plan (“the Plan”). Plaintiffs allege that Defendant Ochsner,

the Plan sponsor, and Defendant Retirement Benefits Committee, the Plan

administrator, breached their duties under ERISA when they used Plan

forfeitures to reduce Ochsner’s matching contribution obligation rather than

defray the administrative expenses of the Plan.

Plaintiffs allege that, under the terms of the Plan, Ochsner makes

matching contributions to the Plan based on each participant’s contributions.

If a participant’s employment is terminated before he becomes vested in those

amounts, those contributions are forfeited to the Plan (“the Forfeitures”).

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According to the Plan, Defendants, as the Plan’s fiduciaries, have discretion to

use the Forfeitures to either pay administrative expenses of the Plan or reduce

future employer matching contributions. While allocating the Forfeitures to

defray administrative expenses is in the Plan participants’ best interest

because it reduces the administrative expenses deducted from their accounts,

using it to reduce employer contributions is in the employer’s best interest

because it saves the employer money. Plaintiffs allege that Defendants always

chose to use the Forfeitures to reduce Ochsner’s matching contributions.

Accordingly, Plaintiffs bring claims under ERISA for breach of the duty of

loyalty, breach of the duty of prudence, prohibited transactions under §

1106(a)(1) and (b)(1), and failure to monitor other fiduciaries.

On May 19, 2025, Defendants moved to dismiss all of Plaintiffs’ claims,

arguing that they failed to state a claim upon which relief can be granted. This

Court agreed. In reliance on the recent opinions of several other district courts,

the Court held that Plaintiffs could not state a claim where Defendants had

acted in compliance with the terms of the Plan and ERISA in making a

discretionary choice to allocate Forfeitures to elective contributing employer

matches. The Court, noting that ERISA requires only that participants receive

their promised benefits, found that Plaintiffs had not alleged that they did not

receive the benefits promised under the Plan, that Defendants acted in

violation of the Plan, or that the fiduciaries had actually engaged in imprudent

conduct. Finally, the Court found Plaintiffs had not alleged a transaction and

therefore had not stated a claim for a prohibited transaction under either

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section of § 1106. The Court allowed Plaintiffs the opportunity to amend their

Complaint to the extent that they could remedy these deficiencies.

Plaintiffs filed their First Amended Complaint on October 21, 2025. On

November 21, 2025, Defendants again moved to dismiss Plaintiffs’ claims.

Defendants argue that Plaintiffs’ Amended Complaint fails to address the

deficiencies identified by this Court in its prior Order and Reasons. Plaintiffs

oppose.

LEGAL STANDARD

To survive a Rule 12(b)(6) motion to dismiss, a plaintiff must plead

enough facts “to state a claim for relief that is plausible on its face.”1 A claim is

“plausible on its face” when the pleaded facts allow the court to “draw the

reasonable inference that the defendant is liable for the misconduct alleged.”2

A court must accept the complaint’s factual allegations as true and must “draw

all reasonable inferences in the plaintiff’s favor.”3 The court need not, however,

accept as true legal conclusions couched as factual allegations.4 To be legally

sufficient, a complaint must establish more than a “sheer possibility” that the

plaintiff’s claims are true.5 If it is apparent from the face of the complaint that

an insurmountable bar to relief exists and the plaintiff is not entitled to relief,

the court must dismiss the claim.6 The court’s review is limited to the

1 Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550

U.S. 544, 547 (2007)).

2 Id.

3 Lormand v. U.S. Unwired, Inc., 565 F.3d 228, 232 (5th Cir. 2009).

4 Iqbal, 556 U.S. at 678.

5 Id.

6 Lormand, 565 F.3d at 255–57.

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complaint and any documents attached to the motion to dismiss that are

central to the claim and referenced by the complaint.7

LAW AND ANALYSIS

Defendants have moved to dismiss each of Plaintiffs’ claims. This Court

will consider each in turn.

I. Breach of the Duty of Loyalty

First, Defendants argue that Plaintiffs have not alleged a claim for

breach of the duty of loyalty under ERISA. “To state a claim for breach of a

fiduciary duty under ERISA, a plaintiff must establish three elements: (1) the

plan is governed by ERISA, (2) the defendant is a fiduciary of the plan, and (3)

the defendant breached its fiduciary duties under ERISA, resulting in losses

to the plan’s participants.”8 In accordance with the duty of loyalty, a fiduciary

must “discharge his duties with respect to a plan solely in the interest of the

participants and beneficiaries,” “provid[e] benefits to participants and their

beneficiaries,” and “defray[ ] reasonable expenses of administering the plan.”9

Further, fiduciaries are required to discharge their duties with respect to a

plan “in accordance with the documents and instruments governing the plan

insofar as such documents and instruments are consistent with the provisions

of [ERISA].”10

Plaintiffs allege that Defendants breached their duty of loyalty by using

the Forfeitures to reduce Ochsner’s matching contribution instead of using the

7 Collins v. Morgan Stanley Dean Witter, 224 F.3d 496, 498 (5th Cir. 2000).

8 Spence v. Am. Airlines, Inc., 775 F. Supp. 3d 963, 994 (N.D. Tex. 2025).

9 29 U.S.C. § 1104(a)(1)(A).

10 Id. § 1104(a)(1)(D).

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Forfeitures to defray the plan’s administrative expenses, which would have

been in the participants’ best interests. They also argue that Defendants chose

not to use the full forfeiture amounts and left amounts unused at the end of

the year. Plaintiffs argue therefore that the failure to select the alternative

that is in the participants’ best interest and use the full amounts available to

benefit the participants is a breach of loyalty under ERISA.

In the Court’s first brush with this issue, it found that the Plan gives

Defendants discretion to allocate Forfeitures to reduce the employer’s

obligation to make discretionary matching contributions “and/or to pay

administrative expenses of the Plan”11 In dismissing Plaintiffs’ breach of

loyalty claim, the Court relied primarily on three points made by other courts

that had already considered similar arguments: (1) ERISA does not require the

fiduciary to maximize profits, only to ensure that participants receive their

promised benefits; (2) both ERISA and the terms of the plans themselves

authorize the use of forfeiture funds for employer matching contributions; and

(3) the plaintiffs’ theory would effectively require forfeiture funds to be used

for administrative expenses and would create an additional benefit to

participants not contemplated in the plans.12 Crucial to this holding was the

11 Doc. 15-3 at 57.

12 See e.g., McWashington v. Nordstrom, Inc., No. C24-1230 TSZ, 2025 WL 1736765,

at *14 (W.D. Wash. June 23, 2025); Dimou v. Thermo Fisher Sci. Inc., No. 23-CV-1732 TWR

(JLB), 2024 WL 4508450, at *9 (S.D. Cal. Sept. 19, 2024); Cain v. Siemens Corp., No. CV 24-

8730, 2025 WL 2172684, at *4 (D.N.J. July 31, 2025); Madrigal v. Kaiser Found. Health Plan,

Inc., No. 2:24-CV-05191-MRA-JC, 2025 WL 1299002, at *5 (C.D. Cal. May 2, 2025); Sievert

v. Knight-Swift Transp. Holdings, Inc., 780 F. Supp. 3d 870, 876 (D. Ariz. 2025); Wright v.

JPMorgan Chase & Co, No. 2:25-CV-00525-JLS-JC, 2025 WL 1683642, at *5 (C.D. Cal. June

13, 2025); Middleton v. Amentum Parent Holdings, LLC, No. 23-CV-2456-EFM-BGS, 2025

WL 2229959, at *15 (D. Kan. Aug. 5, 2025); Hutchins v. HP Inc., 737 F. Supp. 3d 851, 862

(N.D. Cal. 2024); Barragan v. Honeywell Intern., 2025 WL 2383652 (D.N.J. Aug. 18, 2025);

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fact that employer matching contributions are discretionary under the Plan.

The Court found that the handful of cases relied upon by Plaintiffs in which

the courts allowed similar claims to survive past the motion to dismiss stage

were distinguishable on their facts. For example, in McManus v. Clorox

Company, the employer matching contributions were mandatory under the

plan, and the court therefore found that the defendant’s decision to use

forfeitures toward that obligation resulted in fewer contributions to the plan

than the defendant had promised to pay.13

In their Amended Complaint, Plaintiffs largely repeat the same

allegations the Court earlier found lacking. Only now, Plaintiffs allege that

Defendants were “contractually obligated” to provide matching

contributions.14 Despite making this conclusory allegation, however, Plaintiffs

do not provide any factual allegations that plausibly support the existence of a

contractual obligation on the part of Defendants to make matching

contributions. Plaintiffs’ Amended Complaint alleges that once Defendants

have decided to make employer matching contributions, “the terms of the Plan

state that the ‘Employer shall have the obligation to pay the contributions’

making it an obligation of Ochsner and enforceable by the Plan.”15 But this

argument disingenuously misstates the language of the Plan. When the quoted

language is put in context, the Plan actually says that “[e]ach Participating

Employer shall have the obligation to pay the contributions for its own

Gaudalupe Cano v. The Home Depot, Inc., et al., No. 1:24-CV-03793-TRJ, 2025 WL 2589567,

at *4 (N.D. Ga. Aug. 26, 2025).

13 McManus v. Clorox Co., 2025 WL 732087 (N.D. Cal., Mar. 3, 2025); see also Buescher

v. N. Am. Lighting, Inc., No. 24-CV-2076, 2025 WL 1927503, at *12 (C.D. Ill. June 30, 2025).

14 Doc. 45 at 31.

15 Id. at 14.

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employees and no other corporation shall have such obligation.”16 This

provision does not, as Plaintiffs suggest, create a contractual obligation for

Defendants to make employer matching contributions.17 Indeed, the Plan

plainly provides that their obligation to match contributions is discretionary.

Accordingly, Plaintiffs’ conclusory allegations attempting to create an

obligation for Defendants to make matching contributions is belied by the plain

language of the Plan.

Plaintiffs’ attempts to change the nature of Defendants’ obligation under

the Plan illuminates the deficiencies in their claim. Because the matching

contributions are discretionary, “[D]efendants could have used the

[F]orfeitures to pay for administrative expenses and opted not to make

contributions” in that amount or at all.18 “In view of this discretion, . . . a

fiduciary does not breach its duty of loyalty by discretionarily choosing to apply

forfeitures to employer contributions rather than to pay administrative

costs.”19 As this Court explained in its first Order and Reasons, “the fiduciary

duty is fulfilled where the fiduciary ensures that participants have received

16 Doc. 46-3 at 118.

17 Plaintiffs also suggest that once Defendants have decided to contribute an employer

match, then the obligation becomes enforceable by the Plan against Defendants. But the

authority it cites for this proposition states only that a plan has a claim against an employer

for “required contributions.” Doc. 45 at 14, n.6. As discussed, the contributions in the Plan

here are not required, but rather, discretionary.

18 Tillery v. WakeMed Health & Hosps., No. 5:25-CV-408-D, 2026 WL 125784, at *5

(E.D.N.C. Jan. 15, 2026); see Polanco v. WPP Grp. USA, Inc., No. 24-CV-9548 (JGK), 2025

WL 3003060, at *7 (S.D.N.Y. Oct. 27, 2025) (“[I]f the defendants had instead used Forfeitures

to cover the Plan’s administrative expenses, WPP would have been under no obligation to

make employer contributions as well.”).

19 Gardner-Keegan v. W.W. Grainger, Inc., No. 1:25-CV-5233, 2026 WL 194772, at *7

(N.D. Ill. Jan. 26, 2026).

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their promised benefits.”20 The facts of the Amended Complaint indicate that

Defendants complied with the Plan’s lawful terms and provided participants

with the benefits due. Accordingly, Plaintiffs cannot state a claim for breach of

the duty of loyalty. In dismissing Plaintiffs’ initial Complaint, this Court noted

that a majority of courts had reached the same conclusion.21 Since that time,

the list of courts joining the majority continues to grow.22 And the cases in

which courts have reached a contrary conclusion continue to be largely

distinguishable on their facts.23

II. Breach of the Duty of Prudence

Next, Defendants allege that Plaintiffs have failed to state a claim for a

breach of the duty of prudence under ERISA. ERISA fiduciaries are held to the

20 Hutchins v. HP Inc., 767 F. Supp. 3d 924 (N.D. Cali. 2025); Tillery, 2026 WL 125784,

at *5 (“The duty of loyalty does not require that defendants offer more than” what the plan

promised.)

21 Bozzini v. Ferguson Enters. LLC, No. 22-CV-05667-AMO, 2025 WL 1547617, at *2

(N.D. Cal. May 29, 2025); McWashington, 2025 WL 1736765, at *14; Dimou, 2024 WL

4508450, at *9; Cain, 2025 WL 2172684, at *4; Madrigal, 2025 WL 1299002, at *5; Sievert,

780 F. Supp. 3d 876; Wright, 2025 WL 1683642, at *5; Middleton, 2025 WL 2229959, at *15;

Hutchins I, 737 F. Supp. 3d at 862; Barragan, 2025 WL 2383652; Cano, 2025 WL 2589567,

at *4; Fumich v. Novo Nordisk Inc., No. CV 24-9158 (ZNQ) (JBD), 2025 WL 2399134, at *6

(D.N.J. Aug. 19, 2025).

22 Tillery, 2026 WL 125784, at *4 (and cases cited therein); Brown v. Peco Foods, Inc.,

No. 3:25-CV-491-TSL-RPM, 2025 WL 3210857, at *5 (S.D. Miss. Nov. 14, 2025) (and cases

cited therein); Curtis v. Amazon.com Servs., LLC, No. C24-2164RSM, 2026 WL 124323, at *3

(W.D. Wash. Jan. 16, 2026); del Bosque v. Coca-Cola Sw. Beverages LLC, No. 3:25-CV-01270-

X, 2025 WL 3171326, at *5 (N.D. Tex. Nov. 13, 2025); Polanco, 2025 WL 3003060, at *4;

Brewer v. All. Coal, LLC, No. 24-CV-0406-CVE-SH, 2025 WL 3527171, at *9 (N.D. Okla. Dec.

9, 2025).

23 McManus, 2025 WL 732087 (considering a plan with mandatory employer

contributions); Stewart v. Nextera Energy, Inc., No. 23-81314-CIV, 2025 WL 3098085, at *6

(S.D. Fla. Aug. 14, 2025) (considering a plan that provided that remaining forfeitures “shall

be applied to reduce Plan administrative expenses” before any amounts are applied to reduce

employer contributions); Rodriguez v. Intuit Inc., 744 F. Supp. 3d 935 (N.D. Cal., Feb. 5, 2025)

(considering a plan that did not authorize the “specific decisions” made by the defendant with

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“prudent man” standard of care, which requires fiduciaries to exercise “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.”24 “A claim for breach of the duty of prudence will survive a motion to

dismiss if the court, based on circumstantial factual allegations, may

reasonably infer from what is alleged that the process was flawed.”25

Plaintiffs allege, as they did in their Original Complaint, that

Defendants failed to undertake any reasoned and impartial decision-making

process to determine how to allocate the Forfeitures. Specifically, they

emphasize the fact that Defendants consistently chose, year after year, to

allocate the Forfeitures to employer matching contributions despite the

knowledge that Ochsner had already decided to make employer matching

contributions and that there was no risk that Ochsner might be unable to

contribute those amounts. They argue that these facts create the inference that

Defendants did not undertake a reasoned and impartial decision-making

respect to the use of the forfeitures); Heet v. Nat’l Med. Care, Inc., No. CV 25-11644-WGY,

2026 WL 353317, at *4 (D. Mass. Feb. 9, 2026) (“The Fresenius Plan requires forfeited

matching contributions to be used to offset other matching contributions under Section 4.4(b)

and, once those are paid, the only other permissible, albeit discretionary, use under the

Fresenius Plan expands to defrayment of administrative expenses, under Section 7.4.”);

Gardner-Keegan v. W.W. Grainger, Inc., No. 1:25-CV-5233, 2026 WL 194772, at *8 (N.D. Ill.

Jan. 26, 2026) (“[T]he Plan Document does not give discretion as to how the Plan Committee

can allocate forfeitures.”).

24 29 U.S.C. § 1104(a)(1)(B).

25 Brown v. Peco Foods, Inc., No. 3:25-CV-491-TSL-RPM, 2025 WL 3210857, at *6

(S.D. Miss. Nov. 14, 2025).

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process to determine what use of the Forfeitures was in the participants’ best

interest.

Plaintiffs’ claim remains lacking for the same reasons previously

discussed by this Court. Although the Amended Complaint contains detailed

factual allegations, at bottom Plaintiffs still contend that an inference of

imprudence is created when a fiduciary chooses to apply forfeitures to

discretionary employer matching contributions over administrative fees.

Without more, giving credence to such an inference would create a categorical

rule that fiduciaries are always assumed to act imprudently when they apply

forfeitures to discretionary employer matching contributions over

administrative fees.26 This Court refuses to assume imprudence simply

because Plaintiffs would have preferred a different outcome. “Where, as here,

all Plan participants received all of their promised benefits and Plaintiff[s are]

unable to point to any circumstances rendering the case unique among the

countless ERISA plans permitting the same use of forfeitures, the Court still

simply finds Plaintiff[s’] claim implausible.”27 Accordingly, Plaintiffs have

failed to allege specific facts stating a claim for a breach of the duty of prudence

under ERISA.

Plaintiffs also set forth a breach of the duty of prudence claim based on

Defendants’ delay in utilizing forfeiture amounts. Plaintiffs contend that

Defendants imprudently allowed the Forfeitures to sit unallocated for months

instead of applying the amounts to administrative expenses and thereby

preventing plan participants from incurring expense deductions from their

26 Hutchins II, 767 F. Supp. 3d at 927; Cain, 2025 WL 2172684, at *5.

27 Cain, 2025 WL 2172684, at *5.

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individual accounts for those expenses. However, as other courts have held,

“merely alleging that forfeiture balances existed does not give rise to an

inference that defendants breached the duty of prudence.”28 “Plaintiffs provide

no reason to think that the mere existence of a forfeiture balance at year’s end

necessarily implies an unreasonable delay.”29 Indeed, the Plan expressly

provides that the Forfeitures are to be “held in the Trust and will continue to

share in the allocation of earnings” until a decision is made on whether to

allocate them to employer matching contributions or administrative

expenses.30 Accordingly, Plaintiffs fail to state a breach of the duty of prudence

claim on this theory either.

III. Prohibited Transactions

Next, Defendants argue that Plaintiffs cannot succeed on their claims

that the Forfeiture allocations were prohibited transactions under 29 U.S.C. §

1106(a)(1) or (b)(1). Section 1106 “supplements the fiduciary’s general duty of

loyalty to the plan’s beneficiaries . . . by categorically barring certain

transactions deemed ‘likely to injure the pension plan.’”31 Section 1106(a)

provides that “[a] fiduciary with respect to a plan shall not cause the plan to

engage in a transaction, if he knows or should know that such transaction

constitutes a direct or indirect . . . sale or exchange . . . of any property between

the plan and a party in interest.” Plaintiffs seeking to state a claim under §

1106(a)(1) “must plausibly allege that a plan fiduciary engaged in a transaction

28 Tillery, 2026 WL 125784, at *7.

29 Donelson v. Meijer, Inc., No. 1:25-CV-1156, 2025 WL 3754241, at *5 (W.D. Mich.

Dec. 29, 2025).

30 Doc. 46-3 at 57.

31 Cunningham v. Cornell Univ., 145 S. Ct. 1020, 1025 (2025).

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proscribed therein, no more, no less.”32 Section 1106(b) prohibits self-dealing.

This Court previously dismissed these claims, holding that Plaintiffs had not

alleged a “transaction” within the meaning of § 1106(a) or (b).33 Instead, the

Court found that the use of the Forfeitures toward employer matching

contributions was merely a reallocation of Plan assets within the Plan.

In their Amended Complaint, Plaintiffs now allege that the

“transactions” at issue are the “tens of thousands of transactions extracting

money from the accounts of Plan participants to pay over $8 million for Plan

Administrative Expenses to the Plan’s third-party service providers that

should have been defrayed fully or in part by Forfeited Plan Assets.”34 They

also allege that the Plan engaged in transactions with Ochsner, the Plan

sponsor and a party-in-interest, when it coordinated with Ochsner to calculate

how much Ochsner could reduce its employer matching contribution payment

by offsetting the Forfeitures.

The Court finds that these allegations still fail to state a claim under §

1106. First, the fiduciary did not “cause the plan to engage in a transaction” as

required under § 1106(a) by choosing to pay the administrative fees out of

participant accounts rather than the Forfeitures. Once Ochsner, in its settlor

capacity, decides to charge administrative expenses to the Plan, these

payments are paid from Plan assets and would have been withdrawn from the

32 Id.

33 Plaintiffs reassert their argument that § 1106(b) does not require the allegation of

a “transaction.” The Court previously rejected this argument and need not rehash that issue

here. Doc. 42.

34 Doc. 45 at 34.

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Plan regardless of how Defendants chose to allocate the Forfeitures.35 In

addition, the payment of administrative fees incurred by the Plan out of

participant accounts surely does not implicate the sort of self-dealing

contemplated by § 1106(b).36

Second, Plaintiffs’ allegations that Defendants “coordinated” with

Ochsner and “engaged in calculations” with Ochsner do not allege a

“transaction” within the meaning of § 1106. There is no allegation that any

amount left the Plan. Instead, the movement of funds from the Forfeiture

account to be used for employer matching contributions is an intra-plan

transfer. “[T]he intra-plan reallocation of forfeitures to cover employer

contributions is a ‘payment of benefits,’ [and therefore] it is not a transaction

within the meaning of § 1106.”37 Accordingly, Plaintiffs again fail to state a

claim under § 1106.

IV. Failure to Monitor Other Fiduciaries

Finally, Plaintiffs allege that Ochsner failed to monitor the fiduciaries

responsible for allocating the Forfeitures. This claim is derivative of the other

claims and therefore fails as well.38 Accordingly, all of Plaintiffs’ claims are

35 Doc. 46-3 at 101 (“Expenses of the Plan and Trust . . . may be paid directly by the

Participating Employer or, at the election of the Participating Employer, such expenses may

be paid from the assets of the Trust Fund.”).

36 29 U.S.C. § 1106(b)(1) (“[A] fiduciary with respect to a plan shall not—deal with the

assets of the plan in his own interest or for his own account.”).

37 Polanco, 2025 WL 3003060, at *10; See Lockheed Corp. v. Spink, 517 U.S. 882, 892–

93 (1996) (“[T]he payment of benefits is in fact not a ‘transaction’ in the sense that Congress

used that term in § [1106](a).”).

38 Dimou, 2024 WL 4508450, at *11.

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dismissed. Having already granted Plaintiffs an opportunity to amend their

Complaint, no further leave will be given.

CONCLUSION

For the foregoing reasons, Defendants’ Motion to Dismiss is GRANTED.

Plaintiffs’ claims are DISMISSED WITH PREJUDICE.

New Orleans, Louisiana this 23rd day of March, 2026.

TRICHE

UNITED STATES DISTRICT JUDGE

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