In a long-running case about whether SunTrust Bank and its defined contribution (DC) retirement plan fiduciaries violated their Employee Retirement Income Security Act (ERISA) fiduciary duties by continuing to allow company stock as an investment option in the plan when it was no longer prudent to do so, a federal district court has dismissed several SunTrust executives as defendants in the lawsuit.
A motion for summary judgement was filed by defendants Dr. Frank S. Royal, Patricia C. Frist, Jeffrey C. Crowe, Blake P. Garrett, Jr., William A. Linnenbringer, Dr. Phail Wynn, Jr., David M. Ratcliffe and Steve Castle. The U.S. District Court for the Northern District of Georgia noted that the plaintiffs do not oppose the entry of judgment in favor of all defendants except Castle.
According to the court opinion, Castle served as in-house counsel at SunTrust during the class period. He attended Benefits Plan Committee meetings as a representative from the legal department of SunTrust, but he has never served as a member of the Benefits Plan Committee or the Investment Sub-Committee. He argued that the claims against him should be dismissed because he is not a fiduciary of the plan. The court agreed.
U.S. District Judge Richard W. Story rejected plaintiffs’ theory that Castle was a de facto fiduciary because he provided legal services to the plan. “Plaintiffs’ proffered evidence establishes that Defendant Castle performed the same professional services that in-house counsel routinely provide to the employee benefit plans that are sponsored by their corporate employer,” Story wrote.
He also noted that the Department of Labor (DOL) has explained, and courts have agreed, that attorneys performing their usual professional functions will ordinarily not be considered fiduciaries under ERISA.
Story concluded that Castle is not a fiduciary of the plan, and as a result, plaintiffs’ claims against him fail as a matter of law.