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Cunningham v. Cornell Univ.

United States District Court for the Southern District of New York

January 22, 2019, Decided; January 22, 2019, Filed

16-cv-6525 (PKC)

Opinion

OPINION AND ORDER

CASTEL, U.S.D.J.

Plaintiffs move to certify a class of participants and beneficiaries of the Cornell University Retirement Plan for the Employees of the Endowed Colleges at Ithaca (the "Retirement Plan") and the Cornell University Tax Deferred Annuity Plan (the "TDA Plan") (together, the "Plans") pursuant to Rule 23, Fed. R. Civ. P. (Doc 151.) Plaintiffs assert that the fiduciaries of these plans have not managed the Plans prudently and have allowed the plans to underperform and accrue excessive administrative fees. Plaintiffs allege violations of sections 404 and 406 of the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. §§ 1104, 1106. For the reasons explained, the plaintiffs' [*3]  motion for class certification is granted.

BACKGROUND

The five named plaintiffs in this action are current or former employees at Cornell University ("Cornell"). (Am. Compl. at 10; Doc 81.)1 Three of the five plaintiffs are participants in the TDA Plan and all five plaintiffs are participants in the Retirement Plan. (Am. Compl. at 10.) The Plans are defined contribution, individual account, employee pension benefit plans sponsored by Cornell for eligible employees. (Am. Compl. at 7-8.) The Retirement Plan is funded by contributions from Cornell on behalf of its employees, (Am. Compl. at 7), while the TDA plan is funded by employees' pre-tax deferrals of compensation, (Am. Compl. at 9.) The plans are referred to as "jumbo plans" for their large size (each well over $1 billion), which plaintiffs claim affords them "tremendous bargaining power in the market for retirement plan services." (Am. Compl. at 9.) TIAA-CREF2 and Fidelity are the two recordkeepers for both plans. (Am. Compl. at 52−53.)

Plaintiffs assert that defendants are the fiduciaries of the Plans. Cornell is the administrator of the Plans. (Am. Compl. at 11.) Cornell formed co-defendant the Retirement Plan Oversight [*4]  Committee (the "Committee"), headed by co-defendant Mary G. Opperman, to oversee the Plans' investment options. (Am. Compl. at 12.) Capfinancial Partners, LLC d/b/a CAPTRUST Financial Advisors ("CAPTRUST") is an investment advisory firm hired by the Committee. (Am. Compl. at 12.) While the Plans' fiduciaries choose the investment options included in the Plans, participants may designate in which of the Plans' funds to invest their individual accounts. (Am. Compl. at 9) As of December 31, 2014, the Retirement Plan offered a total of 299 investment options (68 TIAA-CREF and 231 Fidelity investments), and the TDA Plan offered a total of 301 investment options (70 TIAA-CREF and 231 Fidelity investments). (Am. Compl. at 53.) Plaintiffs have invested in many, but not all, of the funds in the Plans. (Am. Compl. at 6.)

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2019 U.S. Dist. LEXIS 10357 *; 2019 WL 275827

CASEY CUNNINGHAM, CHARLES E. LANCE, STANLEY T. MARCUS, LYDIA PETTIS, and JOY VERONNEAU, individually and as representatives of a class of participants and beneficiaries on behalf of the Cornell University Retirement Plan for the Employees of the Endowed Colleges at Ithaca and the Cornell University Tax Deferred Annuity Plan, Plaintiffs, -against- CORNELL UNIVERSITY, THE RETIREMENT PLAN OVERSIGHT COMMITTEE, MARY G. OPPERMAN, and CAPFINANCIAL PARTNERS, LLC d/b/a/ CAPTRUST FINANCIAL ADVISORS, Defendants.

Prior History: Cunningham v. Cornell Univ., 2017 U.S. Dist. LEXIS 162420 (S.D.N.Y., Sept. 29, 2017)

CORE TERMS

Plans, funds, plaintiffs', class certification, class member, defendants', quotation, options, marks, named plaintiff, fiduciary duty, retirement plan, fiduciary, questions, adjudications, lower-cost, breached, damages, underperforming, individualized, appoint, cases, individual account, proposed class, certification, commonality, statute of limitations, poor performance, recordkeeping, allegations