Wildman v. American Century Services, LLC, et al.

In a victory for Analysis Group client American Century, a federal district court dismissed claims of breach of fiduciary duty related to the firm’s stewardship of its 401(k) retirement plan. A group of plaintiffs alleged that American Century had used the plan as a vehicle for promoting its own mutual funds and maximizing profits at the expense of plan participants, in violation of its duties under ERISA. They sought injunctive relief and equitable disgorgement of profits, among other remedies.

An Analysis Group team led by Managing Principals Mark Egland and Michael Beauregard, and including Vice Presidents Eric Nguyen and Andrew Stichman, supported three testifying experts. Managing Principal Bruce Strombom opined on the sufficiency of the plaintiffs’ expert’s damages claims for alleged harm to American Century plan participants, testifying that the plaintiffs’ economic expert had used the wrong models or applied them inappropriately, and that the expert’s models produced inconsistent results. The team also supported affiliates Russell Wermers, who opined on the performance of the 401(k) plan’s investment options, and Kathleen Mann, who opined on American Century’s fiduciary process and testified that the committee members understood and complied with their fiduciary obligations.

After an 11-day trial, Judge Greg Kays of the US District Court for the Western District of Missouri found that the plaintiffs had failed to prove that American Century had breached any fiduciary duty to the plan members by using its own actively managed funds. In his ruling, Judge Kays agreed with Dr. Strombom that the plaintiffs’ economic models “cannot be relied on” for the determination of damages. He also wrote that he found Ms. Mann’s testimony “persuasive and credible.”

Read a news article about the case and the district court’s opinion (subscription required)