Georgia Federal Court Holds that Continuing Course of Conduct Did Not Extend Statute of Limitations Period for Fiduciary Breach Claim

In Stargel et al. v. SunTrust Banks Inc. et al., No. 1:12-cv-03822, (N.D. Ga. Aug. 8, 2013), a Georgia federal judge dismissed a putative class action against Suntrust Banks. Among the claims it dismissed was a fiduciary breach claim based on defendant’s failure to remove its own allegedly underperforming funds in its 401(k) plan. More specifically, plaintiffs alleged that the initial selection of the funds was imprudent because they under-performed and charged high fees. Nowhere did plaintiffs allege that the funds performed worse over the course of the putative class period. The court concluded that the statute of limitations on this claim ran in 2004, seven years after the funds were first made available to employees. Repeated failures to remove the investments from the choices available to employees under the plan did not, according to the court, extend the statute of limitations period.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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