Caliber seeks dismissal of $4 million retirement fund lawsuit for lack of plausibility

Caliber Collision is seeking the dismissal of a class action lawsuit that alleges it used over $4 million in employee retirement funds to offset employer contributions.

The plaintiffs include at least one former employee, Roy Fordyce. Caliber contends that a plausible claim hasn’t been made and has requested that the complaint be dismissed in full with prejudice, according to its Nov. 17 motion.

The suit argues Caliber breached the fiduciary duties under the Employee Retirement Income Security Act of 1974 (ERISA) and violated its prohibited transaction rules and anti-inurement provision. Ten unnamed plan fiduciaries are defendants in the case.

The suit claims that from 2019 through 2022, Caliber used only $112,238 to offset plan expenses while plan participants paid plan expenses, directly and indirectly, of over $6 million to third-party service providers.

“At core, plaintiff is asking this court to increase his benefits beyond those required under the terms of the plan,” states Caliber’s motion to dismiss. “But that request finds no basis in ERISA, which requires only that Caliber provide the benefits promised under the terms of the plan.

“In effect, plaintiff seeks increased benefits and a windfall in the form of free or subsidized plan services. That theory finds no grounding in the law and, in fact, contradicts foundational ERISA principles.”

Caliber argues that the claims made in the lawsuit contradict decades of settled law, as well as the U.S. Treasury Department, the U.S. Department of Labor, and several recently decided cases.

“Congress certainly did not require employers who choose to offer retirement plans, like the plan here, to pay for or otherwise subsidize the reasonable expenses associated with the administration of the plan or the provision of plan-related services to participants,” the motion states. “Rather, it is well settled that such expenses may lawfully be charged to the plan and its participants… In short, when it comes to plan expenses, ERISA’s only concern is that the amounts paid are ‘reasonable.'”

It adds that the contributions Caliber offset with forfeitures were entirely discretionary under the plan terms.

“Plaintiff does not allege that forfeitures are removed from the plan; rather, he takes issue with using forfeitures to offset Caliber’s discretionary employer contributions,” the motion states. “What plaintiff does not recognize, or perhaps fails to concede, is that using forfeitures as a source of discretionary employer contributions for funding other participants’ retirement savings is ‘providing benefits to participants,’ precisely as ERISA intended.”

Caliber argues that it has discretion to choose whether to make contributions, and in what amounts.

The motion notes that the Supreme Court has held that the mere “payment of benefits” is not a “transaction” prohibited by ERISA’s prohibited transaction provisions.

“Plaintiff’s prohibited transaction claims fail as a matter of law and should be dismissed, as numerous other courts have done in rejecting identical claims,” the motion states.

As of Wednesday afternoon, the plaintiffs’ attorneys and the court had yet to respond to the motion.

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