United States District Court, M.D. North Carolina
KIMBERLY DAVIS, individually and as The representative of a class of similarly situated persons, Plaintiff,
STADION MONEY MANAGEMENT, LLC and UNITED OF OMAHA LIFE INSURANCE CO., Defendants.
MEMORANDUM OPINION AND ORDER
LORETTA C. BIGGS, DISTRICT JUDGE
action is brought pursuant to the Employee Retirement Income
Security Act of 1974, 29 U.S.C. § 1001 et seq.
(“ERISA”). Before the Court are motions to
dismiss Plaintiff's First Amended Class Action Complaint
filed by Defendants Stadion Money Management, LLC
(“Stadion”) and United of Omaha Life Insurance
Company (“United”), (ECF Nos. 42; 47), as well as
United's Motion to Transfer Venue to the District of
Nebraska, (ECF No. 32). For the reasons stated below,
United's Motion to Transfer will be granted. Accordingly,
the Court declines to resolve Defendants' motions to
dismiss, which shall be transferred as part of this action to
the District of Nebraska.
ERISA Overview “Congress enacted ERISA to promote
the ‘soundness and stability of [employee benefit
plans]' in private industry.” Trs. of the
Plumbers and Pipefitters Nat'l Pension Fund v. Pluming
Servs., Inc., 791 F.3d 436, 440 (4th Cir. 2015)
(quoting 29 U.S.C. § 1001(a)) (alteration in the
original). Specifically, the law (1) establishes certain
“minimum standards” of equitability and financial
soundness for employee benefits plans and then (2) provides
“appropriate remedies, sanctions, and ready access to
the Federal courts” to cure any breaches of those
standards. See id.; Aetna Health Inc. v.
Davila, 542 U.S. 200, 208 (2004).
2006, Congress enacted the Pension Protection Act
(“PPA”) to “increase employee participation
in § 401(k) retirement plans.” Bidwell v.
Univ. Med. Ctr., Inc., 685 F.3d 613, 616 n.1 (6th Cir.
2012). Specifically, the PPA amended ERISA “to provide
a safe harbor for plan fiduciaries investing participant
assets in certain types of default investment alternatives in
the absence of participant investment direction.” U.S.
Dep't of Labor, Fact Sheet: Default Investment
Alternatives Under Participant-Direct Individual Account
Plans (Sept. 2006), available at
That is, the PPA encourages employers to automatically invest
the savings of employees who do not select a 401(k) plan on
their own by limiting employers' legal exposure for these
automatic enrollments. Id.; Larson v. Allina Health
Sys., 350 F.Supp.3d 780, 794 (D. Minn. 2018). In
exchange for this safe harbor, so-called QDIA (qualified
default investment alternative) plans must comply with
Department of Labor regulations. See Bidwell, 685
F.3d at 616.
Kimberly Davis, lives in Greensboro, North Carolina where she
worked for Festival Fun Parks, LLC d/b/a Palace
Entertainment. (See ECF Nos. 36 ¶ 13; 28-1 at
2.) Palace Entertainment is a California-based company.
(See ECF No. 28-3 at 2.) Davis was automatically
enrolled by her employer in the “Palace Plan, ”
Palace Entertainment's QDIA. (See ECF Nos. 36
¶ 13 (explaining that Plaintiff participated in the
Palace Plan); 28-1 at 2 (documenting that the Palace Plan was
a QDIA).) The Palace Plan was managed by Stadion. (ECF No. 36
¶ 13.) Stadion “canceled [Davis's]
service” when she “received a distribution of . .
. benefits” in March 2013. (Id.)
Stadion, “is a registered investment adviser based in
Watkinsville, Georgia.” (Id. ¶ 14.)
Stadion provides “managed account services to
participants in ERISA-covered plans throughout the United
States.” (Id.) “Stadion invests each
participant's funds into one of its risk-based
portfolios” with younger participants generally placed
into riskier plans focused on growth and older participants
placed into more conservative plans focused on capital
preservation. (ECF Nos. 44 at 6; 36 at ¶¶ 35-36.)
In return for its investing services, Stadion receives a fee
agreed to by the plan's sponsor. (ECF No. 44 at 7.)
United, is an insurance company based in Omaha, Nebraska.
(ECF No. 36 ¶ 15.) United “issues group variable
annuity contracts to employer-sponsored retirement plans and
provides attendant administrative and investment
Stadion's Relationship with United and Alleged ERISA
to Plaintiff, Stadion's managed account service has
consistently “delivered underwhelming results.”
(Id. ¶ 24.) Given this poor performance,
Stadion could only expand by “establish[ing] new
marketing relationships with insurance companies, ”
like United, who could “pitch Stadion's managed
account service” to the participants in the group
variable annuities they managed. (See Id. ¶
25.) In exchange for these managed account services, Stadion
“receives a managed account fee” which it splits
with United. (See Id. ¶ 26.)
initiated this lawsuit on behalf of all “participants
and beneficiaries whose accounts were enrolled in
Stadion's managed account service within a retirement
plan administered by United of Omaha for any period of time
after January 25, 2013.” (Id. ¶ 74.) At
its core, Plaintiff's Complaint alleges that Stadion
“select[ed] investment options that generate[d] higher
fees for [United]” and, in exchange, United kept
referring Stadion to provide managed account services despite
Stadion's lackluster track record. (See Id.
¶¶ 3-5.) In Count One, Plaintiff alleges Stadion
violated its fiduciary duties of loyalty and prudence by
investing in investment options affiliated with Defendants
when “unaffiliated options . . . would have provided
better performance at lower costs.” (See Id.
¶¶ 81-84.) In Count Two, Plaintiff alleges United
wrongfully and knowingly profited from Stadion's ERISA
violations. (Id. ¶¶ 85-87.) In Count
Three, Plaintiff alleges Stadion engaged in prohibited
transactions with a party in interest, United. (Id.
¶¶ 88-92.) Finally, in Count Four, Plaintiff
alleges Stadion engaged in prohibited transactions with
itself. (Id. ¶¶ 93-95.)
UNITED'S MOTION TO TRANSFER
28 U.S.C. § 1404(a), “[f]or the convenience of
parties and witnesses, in the interest of justice, a district
court may transfer any civil action to any other district or
division where it might have been brought or to any district
or division to which all parties have consented.” 28
U.S.C. § 1404(a). Such requests for a transfer of venue
are “committed to the sound discretion of the district
court.” Jenkins v. Albuquerque ...