On July 22, 2021, the United States District Court for the District of Massachusetts determined that a proposed class action lawsuit against Biogen, Inc. (“Biogen”) was fit to proceed, denying most of Biogen’s attempt to dismiss the legal action.
Biogen is the plan sponsor for the Biogen 401(k) Plan (the “Plan”). With assets totaling over $1 billion, the Plan is in the top 0.1% of all 401(k) plans by size and accordingly has significant bargaining power to demand low-cost services within the marketplace for administration of 401(k) plans and the investment of 401(k) assets.
Plaintiffs, represented by Miller Shah LLP, allege that Biogen breached its fiduciary duties under the Employee Retirement Income Security Act (“ERISA”) by allowing Plan participants to pay unreasonably excessive administrative and investment management fees and by selecting and retaining expensive and poorly-performing investments instead of offering investment options that were more prudent and readily available.
Biogen filed a motion to dismiss the complaint in November 2020, arguing that Plaintiffs’ allegations did not create a plausible inference of breach of fiduciary duties.
The District Court heard oral argument from both sides on February 11, 2021, and issued its opinion on July 22. In its decision, the Court denied most of Biogen’s motion to dismiss, upholding all claims alleging excessive fees and selection and retention of imprudent investments. The parties will now proceed to discovery and prepare for summary judgment or trial.
Updates will be posted to this blog as the matter progresses. A class has not yet been certified in this action. The case caption for the lawsuit is Covington et al v. Biogen Inc. et al, Case No. 1:20-cv-11325-DJC, filed in the United States District Court for the District of Massachusetts.
ERISA was enacted to protect employee benefit plan participants and their beneficiaries by creating standards of conduct for plan fiduciaries and allowing plan participants to bring lawsuits to recover damages resulting from a breach of those fiduciary duties.
The legal team at Miller Shah LLP has significant experience representing ERISA matters. If you have any questions regarding this subject or this post, please contact Alec Berin (firstname.lastname@example.org) or Jonathan Dilger (email@example.com). The firm can also be reached toll-free at (866) 540-5505.
Miller Shah, LLP is a law firm with offices in California, Connecticut, Florida, New Jersey, New York, and Pennsylvania. The firm is an active member of Integrated Advisory Group (www.iaginternational.org), which provides clients access to excellent legal and accounting resources around the globe. For more information about the firm, please visit https://www.millershah.com.