Howell v. Motorola, Inc.

Dist. Ct. did not err in granting defendants' motion for summary judgment in action under ERISA alleging that defendants (alleged fiduciaries of 401(k) plan offered by employer) breached said fiduciary duties by continuing to offer Motorola stock fund to plaintiffs-plan participants in spite of knowledge that Motorola engaged in bad business transaction that was unknown to general public. Plaintiffs also alleged that defendants misrepresented material information about said bad business transaction and failed to monitor committee members that administered plan. While plaintiffs could maintain instant class action, certain defendants could not be liable due to their lack of knowledge with respect to bad business transaction. Moreover, other defendants with said knowledge could rely on safe harbor provisions under section 404(c) of ERISA with respect to plaintiffs' allegations of failure to monitor and failure to disclose, where plaintiffs had freedom to select contents of their individual plans and had sufficient information about risks associated with selecting Motorola stock fund. However, while safe harbor provisions could not apply to allegations that defendants improperly included Motorola stock fund in available plan investments, record did not show that Motorola stock fund was so volatile (even with public knowledge of bad business transaction) so as to give notice to defendants that it should have pulled said stock fund from plan.