A federal judge in Seattle dismissed for a second time a lawsuit filed by former Microsoft Corp. employees who accused the company and its 401(k) plan fiduciaries of violating ERISA by offering a BlackRock target-date series.
U.S. District Judge James L. Robart, who dismissed the original complaint Feb. 7, wrote on Monday that an amended complaint didn't correct the flaws in the original lawsuit. He dismissed the lawsuit "with prejudice," meaning it cannot be refiled in his court.
"Plaintiffs' allegations, which again are based solely on the BlackRock TDFs' alleged poor performance during a brief timeframe, are insufficient, without more, to raise plaintiffs' claim above the level of speculation and into plausibility," Mr. Robart wrote in Beldock et al. vs. Microsoft Corp. et al.
He also rejected allegations that the Microsoft plan, by offering the BlackRock LifePath Index Retirement Funds, had violated ERISA's rules on duty of loyalty — such as plan executives placing their interests above those of participants — and duty to monitor plan management.
"Plaintiffs have not included any additional allegations in their amended complaint" to support their claims, Mr. Robart wrote.
The judge also rejected a request to amend the lawsuit again. "Plaintiffs, who are represented by experienced counsel, have had two opportunities to sufficiently plead their claims but have failed to do so," he wrote.
The Microsoft case is one of 11 similar lawsuits filed against different plan sponsors offering the BlackRock target-date series. The plaintiffs in these cases are represented by the Miller Shah law firm either as lead counsel or co-counsel.
All allege that the BlackRock target-date series performed poorly compared with several other target-date series and that sponsors should have removed the BlackRock product.
Similar complaints against Booz Hamilton Inc. and Capital One Financial Corp. have been dismissed at the District Court level. Plaintiffs in both lawsuits have announced their intention to appeal.
Microsoft Corp. Savings Plus 401(k) Plan, Redmond, Wash., had $48 billion in assets as of Dec. 31, 2021, according to the latest Form 5500.
