Yogi Berra could have called this one — an excessive fee lawsuit against Old Dominion Freight Line is the second such action taken against the transportation company in the span of just one year. The latest suit, filed Sept. 27, 2023, makes allegations similar to the previous case, which a federal judge had dismissed just weeks prior, citing lack of evidence. Plaintiffs accuse the company of opting for pricier share classes over more affordable share classes for the same investments.
The first suit was filed in November 2022 by a former employee who alleged the company’s 401(k) plan charged excessive recordkeeping fees and kept poorly performing funds in the plan’s lineup. Upon dismissing the case, U.S. District Judge Thomas D. Schroeder stated that the plaintiff had no grounds to sue because he personally had not been affected by the fees or investments named in the suit. He also cited a lack of evidence: "The complaint contains no factual support for the conclusory allegations that he personally invested in any of the imprudent investment options, nor that he suffered any other type of specific financial loss.”
The plaintiff’s inability to proceed with his lawsuit, however, didn’t take the spotlight off of Old Dominion for long. Just three weeks after the dismissal, the company was hit with a second excessive fee suit from some of the same law firms as the previous suit, this time representing three plaintiffs. The latest, filed on behalf of a proposed class of 26,000 individuals, hinges on the allegation that the company failed to prudently monitor the plan’s investment lineup and ensure reasonable fees for participants. According to the filing, Old Dominion’s plan paid more than $10 million in excessive fees over the last several years.
It’s not clear how this latest case will play out, though it’s certainly been a bumpy ride for the transportation giant. And while it can be easy to think of ERISA litigation as a one-and-done risk, the recent boomerang filing against Old Dominion shows that isn’t always the case.
With excessive fee cases showing no signs of abating anytime soon, benchmarking can be one of the most powerful tools to protect you and your clients against potentially costly litigation. For a quick plan temperature check, Prism Total Fees Benchmarking provides insight into whether a plan’s fees are low, average or high compared to similar plans. And with our latest offering, RFP Express, you can access fast and accurate quotes from top providers instantly and generate custom quotes within 24 hours.
With a suite of flexible benchmarking solutions, PlanFees helps advisors stay on top of fees to help plan sponsors uphold their fiduciary duty. Because as the Old Dominion suit and the great Yogi Berra would remind us, when it comes to the legal risks plan sponsors face, it clearly “ain’t over till it’s over.”
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