Bozzini v. Ferguson Enterprises LLC
3:22-cv-05667
N.D. Cal.May 29, 2025Background
- Plaintiffs Tera Bozzini and Adrian Gonzales brought a putative class action under ERISA against Ferguson Enterprises LLC and its 401(k) Retirement Plan Committee.
- Plaintiffs alleged improper handling of forfeited funds (from unvested, departing employees), claiming those funds were used to offset Ferguson’s contribution obligations rather than reduce plan administrative expenses.
- The contested Second Amended Complaint (SAC) introduced new legal theories not previously asserted, allegedly in violation of an earlier court order limiting amendments without leave or consent.
- Ferguson moved to dismiss the SAC’s second and third causes of action and to strike the jury demand.
- The court analyzed whether the forfeitures’ use could support claims for breach of the duty of loyalty or for engaging in a prohibited transaction under ERISA.
- The court granted Ferguson’s motion, dismissing both contested claims and striking the jury demand.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether new legal theories (re: forfeitures) are allowed in SAC | Plaintiffs enforced permissible amendments to cure deficiencies and add claims about forfeitures | SAC asserts new, previously unpled theories in violation of court’s earlier order | New theories not allowed; claims dismissed |
| Breach of duty of loyalty for use of forfeitures | Ferguson’s use of forfeitures to offset employer contributions violates duty of loyalty to participants | Alleged misuse insufficient for ERISA duty of loyalty; plan and law allow such use | Dismissed: more is required under ERISA |
| Prohibited transaction for use of forfeitures | Using forfeitures for employer’s benefit amounts to a prohibited transaction | Allocating forfeitures as matching contributions is not prohibited by ERISA | Dismissed: allegations insufficient |
| Jury demand | Kept in the complaint by mistake | Agreed it was an error | Stricken |
Key Cases Cited
- Hutchins v. HP Inc., 737 F. Supp. 3d 851 (N.D. Cal. 2024) (Mere use of forfeitures for contributions, as permitted by plans, does not alone breach a fiduciary duty or constitute a prohibited transaction)
- Rodriguez v. Intuit, Inc., 744 F. Supp. 3d 935 (N.D. Cal. 2024) (Duty of loyalty claim survives motion to dismiss only if plan documents are violated or more specifics pled about imprudence and benefit to employer)