Ninth Circuit Upholds Dismissal of ERISA Fiduciary Breach Claims Against Genentech

In Wehner v. Genentech, Inc., No. 24-2630, 2025 WL 2505672 (9th Cir. Sept. 2, 2025), the Ninth Circuit affirmed the dismissal of ERISA claims brought by a former Genentech employee who alleged that the company and its fiduciary committee mismanaged the Roche 401(k) Savings Plan. The court agreed with the district court that the complaint failed to plausibly allege a breach of fiduciary duty under ERISA.

Matthew Wehner, a former Genentech employee, participated in the Roche 401(k) Savings Plan, which had over 34,000 participants and nearly $9.4 billion in assets by the end of 2019—placing it among the largest defined contribution plans in the country. See Wehner v. Genentech, Inc., No. 20-CV-06894-WHO, 2021 WL 2417098 (N.D. Cal. June 14, 2021). He filed suit under ERISA, claiming that Genentech and the Roche DC Fiduciary Committee breached their duties of prudence and loyalty in managing the plan.

Wehner’s allegations fell into three main categories:

Excessive Recordkeeping Fees – He argued that the plan participants paid unreasonably high recordkeeping and administrative fees to Fidelity, the plan’s recordkeeper. According to Wehner, participants paid an average of $54 annually for services that comparable plans obtained for about $30. He highlighted the Danaher Corporation’s plan, which also used Fidelity and had a similar participant base, but paid only $28 per participant.

Custom Target Date Funds (TDFs) – Wehner alleged that the fiduciaries imprudently retained custom-designed Roche TDFs managed by Russell Investments. He claimed that Russell had a poor reputation in the TDF market and that the Roche TDFs consistently underperformed relative to retail benchmarks such as Vanguard, Fidelity, and S&P indices.

Master Trust and Loyalty Issues – He contended that the fiduciaries breached their duty of loyalty by placing plan assets in a master trust structure that allegedly caused Roche plan participants to subsidize expenses of other affiliated retirement plans, and by continuing a business relationship with Russell despite conflicts of interest.

The district court allowed the excessive fee claim based on recordkeeping costs to proceed but dismissed the claims concerning the Roche TDFs and loyalty breaches with prejudice. It also permitted a derivative monitoring claim to continue, but only insofar as it was tied to the plausible excessive fee allegations.

On appeal, the Ninth Circuit affirmed the dismissal of the remaining claims, siding with the district court’s reasoning.

The panel emphasized that ERISA’s duty of prudence is assessed prospectively, based on the process fiduciaries use, not simply by comparing investment outcomes in hindsight. “ERISA requires prudence, not prescience,” the court explained. A plaintiff cannot merely allege that different investment choices would have produced better results; instead, he must provide meaningful factual allegations showing that a prudent fiduciary in similar circumstances would have made different decisions.

Applying that standard, the Ninth Circuit concluded that Wehner’s allegations about the Roche TDFs’ underperformance and Russell’s reputation were insufficient. Simply labeling other retail funds as “comparable” benchmarks did not establish meaningful bases for comparison. The complaint lacked the kind of factual enhancement necessary to plausibly allege imprudence. Because the monitoring claim was entirely derivative of the dismissed prudence claims, it also failed.

The Ninth Circuit cited its recent decision in Anderson v. Intel Corp. Investment Policy Committee, reiterating that allegations of poor performance or high costs must be supported by concrete, apples-to-apples comparators that demonstrate fiduciary mismanagement. Wehner’s complaint, the court held, fell short of that mark.