Collins v. Ne. Grocery, Inc.

CourtCourt of Appeals for the Second Circuit
DecidedAugust 18, 2025
Docket24-2339
StatusUnpublished

This text of Collins v. Ne. Grocery, Inc. (Collins v. Ne. Grocery, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Second Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Collins v. Ne. Grocery, Inc., (2d Cir. 2025).

Opinion

24-2339-cv Collins v. Ne. Grocery, Inc.

UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT

SUMMARY ORDER RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.

At a stated term of the United States Court of Appeals for the Second Circuit, held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York, on the 18th day of August, two thousand twenty-five.

PRESENT: JOHN M. WALKER, JR., RICHARD C. WESLEY, JOSEPH F. BIANCO, Circuit Judges. ________________________________________________

GAIL COLLINS, DEAN DEVITO, MICHAEL LAMOUREUX, SCOTT LOBDELL, individually, on behalf of the Northeast Grocery, Inc. 401(k) Savings Plan and on behalf of all similarly situated participants and beneficiaries of the Plan,

Plaintiffs-Appellants,

v. 24-2339-cv

NORTHEAST GROCERY, INC., THE ADMINISTRATIVE COMMITTEE OF THE NORTHEAST GROCERY, INC. 401(K) SAVINGS PLAN, JOHN AND JANE DOES 1-30, in their capacities as Members of the Administrative Committee,

1 Defendants-Appellees. * ________________________________________________

FOR PLAINTIFFS-APPELLANTS: PAUL J. SHARMAN, The Sharman Law Firm LLC, Alpharetta, Georgia.

FOR DEFENDANTS-APPELLEES: ERIKA N. D. STANAT, Harter Secrest & Emery LLP, Rochester, New York (Michael- Anthony Jaoude, Harter Secrest & Emery LLP, Buffalo, New York, on the brief).

Appeal from the judgment of the United States District Court for the Northern District of

New York (David N. Hurd, Judge).

UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, AND

DECREED that the judgment of the district court, entered on August 15, 2024, is AFFIRMED IN

PART and VACATED IN PART for the reasons set forth below.

Plaintiffs-Appellants Gail Collins, Dean DeVito, Michael Lamoureux, and Scott Lobdell

(“Plaintiffs”), participants in The Northeast Grocery, Inc. 401(k) Savings Plan (“the Plan”), who

filed a complaint as representatives of a putative class of similarly situated persons and on behalf

of the Plan itself, appeal from a judgment of the district court (Hurd, J.), entered on August 15,

2024, dismissing their complaint without leave to amend. Plaintiffs’ suit arises from the alleged

mismanagement of the Plan by the Defendants-Appellees: the Plan’s sponsor, Northeast Grocery,

Inc.; the Plan’s administrator, the Administrative Committee of The Northeast Grocery, Inc. 401(k)

Savings Plan; and the Committee’s members, John and Jane Does 1-30, in violation of the

* The Clerk of Court is respectfully directed to amend the caption as set forth above. 2 Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001 et seq.

Plaintiffs’ seven-count complaint alleged that Defendants breached their fiduciary duties in

managing the Plan and committed other ERISA violations in selecting and monitoring the Plan’s

investment options; monitoring the performance and/or expenses of the Plan’s recordkeeper and

investment manager; and disloyally permitting revenue-sharing arrangements with Plan service

providers that resulted in excessive compensation. The district court dismissed the complaint in

part for Plaintiffs’ lack of constitutional standing and otherwise for their failure to state a claim.

The district court did not permit Plaintiffs to amend their complaint. This appeal followed.

In a precedential opinion issued simultaneously with this summary order, we affirm the

district court’s dismissal of several claims on standing grounds. In this summary order, we address

the district court’s dismissal on the merits for failure to state a claim. We assume the parties’

familiarity with the underlying facts, procedural history, and issues on appeal, to which we refer

only as necessary to explain our decision to affirm in part.

I. Failure to State a Claim

We review the dismissal of a complaint for failure to state a claim under Rule 12(b)(6) de

novo. Sacerdote v. N.Y. Univ., 9 F.4th 95, 106 (2d Cir. 2021). We conclude that Plaintiffs’

complaint substantially fails to state plausible claims because it lacks “sufficient factual matter,

accepted as true, to state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S.

662, 678 (2009) (quotation marks omitted). “A claim has facial plausibility when the plaintiff

pleads factual content that allows the court to draw the reasonable inference that the defendant is

liable for the misconduct alleged.” Id. Plausibility requires “more than a sheer possibility that a

3 defendant has acted unlawfully,” and “mere conclusory statements” do not suffice. Id. We have

cautioned that evaluating ERISA claims requires “particular care . . . to ensure that the complaint

alleges nonconclusory factual content raising a plausible inference of misconduct and does not rely

on the vantage point of hindsight.” Sacerdote, 9 F.4th at 107 (cleaned up). Here, the complaint

did not withstand Defendants’ motion to dismiss because it did not contain “sufficient

circumstantial factual allegations to support” Plaintiffs’ claims. Id. We thus substantially affirm

the district court’s dismissal of Plaintiffs’ claims for breach of ERISA’s duties of prudence and

loyalty, prohibited transactions, breach by omission, and breach of the duty to monitor.

A. Duty of Prudence 1

ERISA protects plan beneficiaries by mandating that plan fiduciaries adhere to the duty of

prudence, which requires that the fiduciaries discharge their duties “with the care, skill, prudence,

and diligence under the circumstances then prevailing” that a prudent person “acting in a like

capacity and familiar with such matters would use.” 29 U.S.C. § 1104(a)(1)(B). We evaluate

prudence under an objective standard and judge the fiduciary’s conduct “based upon information

available . . . at the time of each investment decision and not from the vantage point of hindsight.”

1 We do not reach Plaintiffs’ arguments that they plausibly alleged that the Committee breached its fiduciary duties by failing to investigate the availability of lower-cost, equal or better performing share classes and alternative funds, and by selecting and retaining investment options with revenue sharing and indirectly compensating the Plan’s recordkeeper. We affirm the dismissal of those claims for lack of standing in a precedential opinion issued simultaneously with this summary order. 4 Sacerdote, 9 F.4th at 107 (quotation marks omitted). Plaintiffs’ imprudence claim fails for several

reasons.

First, Plaintiffs failed to plausibly allege that Defendants imprudently selected and

monitored the Plan’s investment options because certain investment options underperformed

alternatives. A fiduciary “normally has a continuing duty . . . to monitor investments and remove

imprudent ones,” which includes “systematically consider[ing] all the investments . . . at regular

intervals to ensure that they are appropriate.” Tibble v. Edison Int’l, 575 U.S.

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Bluebook (online)
Collins v. Ne. Grocery, Inc., Counsel Stack Legal Research, https://law.counselstack.com/opinion/collins-v-ne-grocery-inc-ca2-2025.