Judge dismisses lawsuit alleging that Vail Resorts mismanaged employee retirement plans
A U.S. District Court judge for the District of Colorado on Wednesday dismissed with prejudice a lawsuit alleging Vail Resorts mismanaged its 401(k) retirement plans for employees.
The lawsuit, filed Feb. 24 on behalf of Debra Kurtz, a New York state resident and a former employee of Vail Resorts, argued that excessively high fees, the available investment options for participants and Vail Resorts’ decisions as fiduciary of the plan cost participants millions of dollars of their retirement savings.
The lawsuit was filed by Baird Quinn, Greg Coleman Law, Crueger Dickinson and Jordan Lewis as a purported class action under the Employee Retirement Income Security Act of 1974.
According to the lawsuit, Vail Resorts’ retirement plan reportedly had 8,276 participants and more than $309 million in assets at the end of 2018, offering participants 27 investment options.
With the size of the plan, Vail Resorts could have qualified to offer its participants lower-cost shares with lower fees and better rates of return, but did not, resulting in participants paying higher costs and receiving lower returns, the lawsuit argued.
Judge R. Brooke Jackson wrote the 27-page ruling that ultimately granted Vail Resorts’ request to have the lawsuit dismissed.
While Jackson found Kurtz had standing to bring the lawsuit — something that Vail Resorts had argued against — he also found that the lawsuit failed to allege facts sufficient to constitute a breach of fiduciary duties under ERISA.
“Plaintiffs thus ask this court to infer that defendants acted imprudently as a fiduciary based on circumstantial allegations that the plan did not offer the lowest-share class for certain funds, and that certain funds were more expensive than the alternatives,” Jackson wrote in the ruling. “But I cannot infer from plaintiff’s allegations that defendant imprudently managed the plan.”
Jackson also noted in his ruling that the lawsuit contained no allegations of self-interested dealing, kickbacks or inappropriate influence by Vail Resorts, or of Vail Resorts taking actions to benefit itself, “from which the court could more readily derive an inference of fiduciary breach.”
“Thus, while circumstantial allegations are sometimes enough to survive a motion to dismiss, here they are not,” Jackson wrote.
Lewis, a Florida-based attorney who helped file the lawsuit against Vail Resorts, said Kurtz and the attorneys are disappointed by the ruling and are reviewing their options.
The judge “accepted our arguments on standing,” Lewis said, but “did not find that we detailed our allegations in a way the court found sufficient. We think that’s probably a correctable problem, but we have to figure out what our client wants and what makes sense.”
Vail Resorts did not respond to a request for comment on the ruling.
Tom Lotshaw can be reached at firstname.lastname@example.org.
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