Opinion ID: 615595
Heading Depth: 2
Heading Rank: 1

Heading: Prudence Claim

Text: While plaintiffs bring the Prudence Claim against the Investment Committee, the Administration Committee, Citigroup, and Citibank, only the Investment Committee and Administration Committee were fiduciaries with respect to plaintiffs' ability to invest through the Plan in Citigroup stock. The Plans delegated to the Investment Committee the authority to add or eliminate investment funds, and the Plans delegated to the Administration Committee the authority to impose timing and frequency restrictions on participants' investment selections. Citigroup and Citibank, by contrast, lacked the authority to veto the Investment Committee's investment selections. Plaintiffs nevertheless allege that Citigroup and Citibank acted as de facto fiduciaries with respect to investment selection. Plaintiffs allege that Citigroup had effective control over the activities of its officers and employees on the Investment and Administration Committees, but do not provide any example of this effective control, nor do they suggest what actions Citigroup took as a de facto fiduciary. Similarly, plaintiffs do not provide any description whatsoever of how Citibank retained certain duties delegated under the Citibuilder Plan to the Investment and Administration Committees. However, even if we assume that each of the defendantsand not just the Investment Committeewas a fiduciary for investment-selection purposes, plaintiffs' claims are still met with two obstacles: (1) the Plan language mandating that the Stock Fund be included as an investment option and (2) the favored status Congress has granted to employee stock investments in their own companies. Langbecker v. Elec. Data Sys. Corp., 476 F.3d 299, 308 (5th Cir.2007). These obstacles lead us to conclude that the Investment and Administration Committees' decisions not to divest the Plans of Citigroup stock or impose restrictions on participants' investment in that stock are entitled to a presumption of prudence and should be reviewed for an abuse of discretion, as opposed to a stricter standard. We hold that plaintiffs have not alleged facts that would establish such an abuse.