The U.S. Supreme Court hasdeclined to review an appeals court decision in Tussey v. ABB Ltd.,a landmark case highlighting the sometimes excessive expenses in401(k) plans.

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The class-action lawsuit, filed in 2006, will now return to theMissouri District Court where the claim originated.

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After a 16-day bench trial in 2012, U.S. District Judge NanetteLaughrey awarded $35 million in damages to more than 12,800participants in ABB's retirement plans. The court found that bothABB and Fidelity breached their fiduciary duty by failing tooversee recordkeeping costs and mapping participants into moreexpensive investment options, ultimately leading to losses in thevalue of their plans.

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This March, the 8th Circuit Court of Appeals in St.Louis upheld part of the plaintiffs' claim, affirming that Cary,North Carolina-based generator manufacturer ABB breached itsfiduciary duty by failing to adequately monitor the fees paid toits recordkeeper, Fidelity Trust.

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The appellate court ruled that Fidelity was not liable for $1.7million in damages resulting from '”float income,” effectivelyreleasing Fidelity from the case.

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And by a 2-1 majority, the appellate court also vacated the district court's rulingthat found ABB liable for $21.8 million in damages on the questionof a share-class selection issue and for “mapping” one investmentin the 401(k) plans' menu, Vanguard's Wellington Fund, to theFidelity Freedom Funds target-date series.

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Mapping is the process of defaulting participant funds from aneliminated investment option (in this case Vanguard's WellingtonFund) into a new fund (in this case, the Fidelity FreedomTDFs).

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Participants are allowed to opt out of the newly added option,but often fail to monitor their plans closely enough to know theoption to do so exists. The plaintiffs in Tussey claimed that ABB'sdecision to map funds from the cheaper Vanguard option to the moreexpensive Fidelity TDFs resulted in losses to their retirementassets.

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In August, the plaintiffs petitioned the Supreme Court, saying the8th Circuit's decision to vacate part of the lower-courtruling “deepened an acknowledged conflict in the circuits regardingthe standard for reviewing an ERISA fiduciary's compliance with itsstatutory duties of prudence and loyalty.”

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The 8th and 9th CircuitCourts have applied a “deferential standard,” according to theplaintiffs' petition.

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The Supreme Court does not explain why it refuses to hear acase, but in a blog post, ERISA attorney Thomas Clark speculatedthat the high court may have been influenced by the fact that it isalready hearing two other ERISA cases this term.

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Now, Tussey v. ABB will travel back to Jefferson City, Missouri.Unless a settlement is reached, a retrial date is now expected tobe set on the portion of the suit that was sent back.

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Participants in the class, represented by the St.Louis law firm Schlichter, Denton and Bogard, have yet tobe awarded any of the $13.4 million in damages upheld by theappellate court.

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Whatever happens next, “I can guarantee one thing … this is notthe last time we will hear about Tussey v. ABB,” Clark wrote.

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Nick Thornton

Nick Thornton is a financial writer covering retirement and health care issues for BenefitsPRO and ALM Media. He greatly enjoys learning from the vast minds in the legal, academic, advisory and money management communities when covering the retirement space. He's also written on international marketing trends, financial institution risk management, defense and energy issues, the restaurant industry in New York City, surfing, cigars, rum, travel, and fishing. When not writing, he's pushing into some land or water.