Danielle Forman v. TriHealth, Inc., 40 F.4th 443

TriHealth, an Ohio healthcare employer, ran a 401(k) plan with ~ $457 million in assets and 12,000+ participants and offered 26 investment options (both active and passive funds).
Three employees sued under ERISA § 1132(a)(2), alleging breaches of the fiduciary duties of prudence and loyalty for (1) offering higher-fee investment options and (2) retaining retail share classes when cheaper institutional share classes with the same strategy/management were available for 17 funds.
Plaintiffs also alleged eight funds were overpriced and underperformed versus available alternatives and that overall plan fees were excessive.
The district court dismissed the complaint for failure to state a claim; the Sixth Circuit reviewed that dismissal on Rule 12(b)(6) standards.
The Sixth Circuit affirmed dismissal of the broad imprudence and performance-based claims but reversed as to the claim that TriHealth imprudently offered higher-cost retail share classes instead of cheaper institutional share classes, allowing that claim to proceed to discovery.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Plan-wide excessive fees	Plan fees nearly double comparators and thus imprudent	Fees justified by services, active management, or plan goals	Dismissed — plaintiffs failed to plead context showing fees were unreasonable for services provided
Cost/performance of eight funds	Funds charged higher fees and underperformed available alternatives	Comparators are not sufficiently similar; fiduciary may reasonably choose higher-cost/active funds	Dismissed — plaintiffs did not plausibly plead an improper process or adequate comparators
Breach of loyalty (conflicted motive)	Fiduciary selected funds that benefited third-party managers	No plausible allegation that fiduciary acted to further its own interests	Dismissed — no facts alleging disloyal motive
Share-class selection (retail vs. institutional)	TriHealth offered retail shares while institutional shares with same strategy/manager and lower fees were available and TriHealth qualified	TriHealth: alternative explanations (revenue sharing, not qualifying, services tied to retail shares) could justify retail shares	Reversed/Remanded — plaintiffs plausibly pleaded imprudence as to offering higher-cost retail share classes; claim may proceed to discovery

Tibble v. Edison Int’l, 575 U.S. 523 (2015) (ERISA fiduciary duty includes a continuing duty to monitor and remove imprudent investments)
Hughes v. Northwestern Univ., 142 S. Ct. 737 (2022) (prudence inquiry is context-sensitive and affords a range of reasonable fiduciary judgments)
Fifth Third Bancorp v. Dudenhoeffer, 573 U.S. 409 (2014) (heightened pleading scrutiny and care in evaluating ERISA claims)
Pfeil v. State St. Bank & Tr. Co., 806 F.3d 377 (6th Cir. 2015) (prudence focus is on the fiduciary’s process, not hindsight performance)
Sacerdote v. N.Y. Univ., 9 F.4th 95 (2d Cir. 2021) (allegations that a plan selected identically managed but higher-cost retail shares can plausibly plead imprudence)
Sweda v. Univ. of Pa., 923 F.3d 320 (3d Cir. 2019) (identically managed higher-cost retail share allegations supply substantial circumstantial evidence of imprudence)
Davis v. Washington Univ. in St. Louis, 960 F.3d 478 (8th Cir. 2020) (failure to obtain institutional shares can plausibly support an imprudence claim)
Loomis v. Exelon Corp., 658 F.3d 667 (7th Cir. 2011) (case recognizing circumstances where retail/share-class choices may be defensible)
Hecker v. Deere & Co., 556 F.3d 575 (7th Cir. 2009) (retail funds may include additional services that can justify higher fees)
Brotherston v. Putnam Invs., LLC, 907 F.3d 17 (1st Cir. 2018) (duty of loyalty breach requires pleading that fiduciary acted to further its own interests)