A federal judge has dismissed a lawsuit that former employees of Taylor Corporation brought against the Minnesota-headquartered company, which is the parent firm of Top 40 distributor Taylor Promotional Products (asi/333647) and other branded merchandise companies, including Top 40 supplier ADG Promo Products  (asi/97270).

In an order issued Dec. 12, Judge Eric C. Tostrud of the U.S. District Court for the District of Minnesota granted a Taylor Corp. motion to dismiss the case, but left the door open for the plaintiffs to file an amended complaint. The former employees have until January 11 to file such a complaint, or the case will be dismissed with prejudice and essentially done.

In the lawsuit against Taylor Corporation originally filed in February, five former employees who participated in Taylor Corp.’s 401(k) plan asserted that the company and its fiduciaries violated the Employee Retirement Income Security Act of 1974 (ERISA) by mismanaging the plan.

In particular, the plaintiffs alleged that Taylor Corp. breached its fiduciary duties by authorizing the plan to pay unreasonably high recordkeeping fees, allowing the plan’s investment portfolio to include options with unreasonably high management fees and needlessly expensive share classes, and by allowing the plan to retain an underperforming fund.

Taylor Corp. responded by asking the court to dismiss the case.

The company argued first along jurisdictional lines, saying the former employees lacked standing to bring the case because they had not demonstrated facts proving they had suffered Article III Injury, which has it that only those plaintiffs concretely harmed by a defendant’s alleged violation may sue that defendant over the violation in federal court.

Second, Taylor Corp. and its fiduciaries asserted that their suers failed to show facts that plausibly support foundational elements of their ERISA violation claims, meaning the case should be dismissed for failing to state a claim.

Ultimately, Tostrud sided with Taylor Corp.

“Plaintiffs plausibly allege Article III injury, but only in connection with their excessive-recordkeeping-expenses claim,” Tostrud wrote in his order. “This claim fails on its merits, however, because plaintiffs do not allege facts plausibly showing that the amount of the plan’s recordkeeping fees are unreasonably high. This claim’s failure leaves plaintiffs without constitutional standing to pursue their remaining ERISA theories.”

Beyond ADG and Taylor Promotional Products, Taylor Corp. subsidiaries include The Occasions Group and Navitor (asi/81500).