DaVita Class Action Alleges Retirement Plan Cost Employees Millions In Excessive Fees

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DaVita Retirement Plan Excess Fees Class Action Lawsuit Overview: 

• Who: Lourdes Teodosio, Amber Brock, Garoon Gibbs-Racho and Damon Parks filed a class action lawsuit against DaVita, Inc. and its board of directors. 
• Why: The former DaVita employees claim the company cost its retirement plan holders millions of dollars in excessive fees. 
• Where: The class action lawsuit was filed in Colorado federal court. 

Kidney dialysis company DaVita cost employees millions of dollars in savings by allowing its $2.6 billion retirement plan to be charged excessive fees, a new class action lawsuit alleges.

Plaintiffs Lourdes Teodosio, Amber Brock, Garoon Gibbs-Racho and Damon Parks claim DaVita violated the Employee Retirement Income Security Act by overpaying by nearly three times on fees for the plans administrating and recordkeeping. 

Teodosio, Brock, Gibbs-Racho and Park, who are all former DaVita employees, want to represent a nationwide class of DaVita employees who were participants in or beneficiaries of the retirement plan since March 23, 2016. 

DaVita’s retirement plan had more than 67,000 participants as of 2020, according to the class action lawsuit, which claims the size of the plan made it a “jumbo plan” that could have taken advantage of low fees. 

“As a jumbo plan, the Plan had substantial bargaining power regarding the fees and expenses that were charged against participants’ investments,” the class action lawsuit states. “Defendants, however, did not try to reduce the Plan’s expenses or exercise appropriate judgment to scrutinize each investment option that was offered in the Plan to ensure it was prudent.”

DaVita Failed to Monitor What Similar Retirement Plans Paid in Fees, Class Action Says

Teodosio, Brock, Gibbs-Racho and Parks claim DaVita failed to pay attention to what other retirement plans of a similar size were paying in fees at the expense of millions of dollars in planholders money. 

“Had defendants complied with their fiduciary obligations, the plan would not have suffered these losses, and the plan’s participants would have had more money available to them for their retirement,” the class action lawsuit states. 

Teodosio, Brock, Gibbs-Racho and Park argue further that DaVita failed to routinely request proposals to ensure it wasn’t overpaying for recordkeeping and administrative expenses.

“The plan was paying higher recordkeeping fees than its peers — an indication the plan’s fiduciaries failed to appreciate the prevailing circumstances surrounding recordkeeping and administration fees,” the class action lawsuit states.

Teodosio, Brock, Gibbs-Racho and Park claim DaVita is guilty of a failure to adequately monitor other fiduciaries and breached its fiduciary duty of prudence. 

Plaintiffs are demanding a jury trial and requesting injunctive and declaratory relief along with actual damages for themselves and all class members. 

In July, lawyers who worked on a 2017 complaint against DaVita were awarded $40.5 million of a $135 million settlement that was reached to resolve claims the company misled its investors. 

Are you a DaVita retirement plan holder? Let us know in the comments! 

The plaintiffs are represented by Donald R. Reavey, Mark K. Gyandoh and Gabrielle Kelerchian of Capozzi Adler PC.

The Davita Retirement Plan Excess Fees Class Action Lawsuit is Teodosio, et al. v. Davita, Inc., et al., Case No. 1:22-cv-00712, in the U.S. District Court for the District of Colorado.

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