Appellate court sends back Kraft fee case
A federal appellate court has thrown out a lower court’s
decision in favor of an excessive retirement plan fee lawsuit and sent the
matter back for further proceedings.
Ruling in Gerald George v. Kraft Foods Global, the 7th U.S.
Circuit Court of Appeals contended there were still too many potential
disagreements between the two sides, concluding that U.S. Magistrate Sidney I.
Schenkier for the U.S. District Court for the Northern District of Illinois was
wrong when he ruled for Kraft in the fiduciary breach case.
“In sum, because we find that the record reveals a genuine
issue of material fact as to whether defendants breached the prudent man
standard of care by failing to make a reasoned decision under circumstances in
which a prudent fiduciary would have done so, we reverse the district court’s
grant of summary judgment on this issue and remand for further consideration,”
wrote U.S. District Judge Lynn S. Adelman of the U.S. District Court for the
Eastern District of Wisconsin.
In the original suit, the plaintiffs argued that the
recordkeeping fees and an employer’s decision to unitize its company stock fund
were a fiduciary breach under the Employee Retirement Income Security Act