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Wildman v. American Century Services, LLC

United States District Court, W.D. Missouri, Western Division

May 22, 2018

STEVE WILDMAN, et al., Plaintiffs,



         This case concerns allegations Defendants violated various provisions of the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001 et seq. Plaintiffs are former employees of Defendants' and participated in the company's 401(k) retirement plan. Plaintiffs allege Defendants, in their roles as employer, plan sponsor, plan fiduciary, and investment manager of the funds in the plan, breached their duties of loyalty and prudence and caused the retirement plan to pay excessive fees.

         Now before the Court is Defendants' motion to exclude the expert report and testimony of Roger Levy (Doc. 140), [1] Plaintiffs' expert witness related to the standard of care. For the reasons below, the motion is DENIED.


         According to the First Amended Complaint (Doc. 28), Plaintiffs assert claims against Defendants, the fiduciaries of the American Century Retirement Plan (the “Plan”), for breach of fiduciary duty and engaging in prohibited transactions under ERISA. Pertinent to this motion, from the beginning of the class period until September 2016, Defendants maintained a menu of investment options for the Plan that consisted exclusively of proprietary American Century funds. Plaintiffs allege these proprietary funds underperformed relative to their marketplace competitors and charged higher than average investment management fees. Plaintiffs allege these actions breached the duties of loyalty and prudence under ERISA.

         Mr. Levy's proposed testimony concerns prudent retirement plan fiduciary practices. Mr. Levy's experience includes 30 years' in fiduciary consulting including consulting with retirement plan sponsors and investment advisors. He has a Masters of Laws degree and has been designated an Accredited Investment Fiduciary Analyst. Additionally, he has published articles on the topic of fiduciary best practices and lectures on the topic at industry conferences.

         Mr. Levy opines that the Plan's fiduciaries did not act in a manner consisted with prudent fiduciary practices based on his experience in the fiduciary industry. In his analysis, he provides examples of conduct by the Plan's fiduciaries that do not meet the applicable standard of care. This is the first case Mr. Levy has testified as an expert witness.


         An expert witness may testify if he satisfies four general requirements. First, he must be “qualified as an expert by knowledge, skill, experience, training, or education.” Fed.R.Evid. 702. Second, his expert testimony must “help the trier of fact to understand the evidence or to determine a fact in issue.” Fed.R.Evid. 702(a). Third, the expert's testimony must reflect reliable and scientifically valid reasoning and methodology. Fed.R.Evid. 702(c); Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579, 592-94 (1993). Fourth, the expert must have “reliably applied the principles and methods” to “sufficient facts or data.” Fed.R.Evid. 702(b), (d).

         The party seeking admission of expert testimony has the burden of establishing admissibility by a preponderance of the evidence. Lauzon v. Senco Prods., Inc., 270 F.3d 681, 686 (8th Cir. 2001). A court should exclude expert testimony “only if it is so fundamentally unsupported that it can offer no assistance to the jury.” Johnson v. Mead Johnson & Co., 754 F.3d 557, 562 (8th Cir. 2014).


         Defendants seek to exclude Mr. Levy's testimony and expert report because: (1) his opinions are legal conclusions; (2) he is not qualified by education and experience to give opinions on the standard of care in this particular case; (3) his opinions are baseless; and (4) some of his opinions are contrary to the facts in the record. In a Daubert motion, first the Court must determine whether Mr. Levy is qualified to give the opinions he propounds and second must determine if his opinions are reliable given the methods used and heir factual basis.

         Before addressing Mr. Levy's qualifications, Defendants assert several of Mr. Levy's opinions are impermissible legal conclusions.[2] The Court agrees Mr. Levy may not testify as to legal conclusions. In re Acceptance Ins. Co. Securities Litigation, 423 F.3d 899, 905 (8th Cir. 2005) (finding district court did not err in excluding expert affidavits that were “more or less legal conclusions” about the facts of the case). However, after reviewing the paragraphs highlighted by Defendants, the Court holds these opinions are not legal conclusions.

         I. Mr. Levy is qualified to testify on the ...

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