Discount Tire ERISA Class Action

Case Name: Cory McGeathy, et al. v. The Reinalt-Thomas Corporation, d/b/a Discount Tire Co., Inc., et al.

Case type: Financial Mismanagement and ERISA Litigation

Filed in: U.S. District Court for the District of Arizona

Docket: Case No.: 2:25-cv-01439-DLR

Case Summary

On April 30, 2025, Sanford Heisler Sharp McKnight filed a Class Action Complaint in the U.S. District Court for the District of Arizona against The Reinalt-Thomas Corporation, d/b/a Discount Tire Co., Inc.; the Board of Directors of The Reinalt-Thomas Corporation; and Empower Trust Company, LLC (collectively, the “Discount Tire Defendants”), on behalf of Cory McGeathy individually and as a representative of thousands of current and former participants in the Discount Tire 401(k) Plan (“the Plan”).

The Complaint alleges the Discount Tire Defendants breached the fiduciary duty of prudence and the duty to monitor under the Employee Retirement Income Security Act (“ERISA”) by mismanaging the Plan and its over $1 billion in assets, causing significant losses to Plan participants’ retirement savings.

Specifically, the Complaint alleges, the Discount Tire Defendants failed for more than a decade to remove from the Plan one of the worst-performing target date suites in the market, the American Century Target Suite Fund.

“Throughout its existence, the American Century Target Fund Suite delivered abysmal investment performance,” the Complaint reads. “Rather than acting with a singular focus on the needs of the Plan’s participants and beneficiaries, the Discount Tire Defendants turned a blind eye to poor investment performance despite the ready availability of superior alternatives. In doing so, the Discount Tire Defendants violated ERISA.”

The Plan has been investing in the American Century Target Fund Suite since 2010. As of December 31, 2023, participants had invested over $1 billion in the Plan; of that, approximately $519.5 million, or 43.5% of the Plan’s total assets, was invested in the American Century Target Fund Suite, which has chronically under-performed relative to comparator funds and its designated industry benchmark, the S&P Target Date Indices, for at least a decade.

The named Defendants are The Reinalt-Thomas Corporation, d/b/a Discount Tire Co., Inc., the national tire and auto parts retailer based in Scottsdale, Arizona; Reinalt-Thomas’ Board of Directors; and Empower Trust Company, LLC, which acts as the Plan’s Trustee. Each Defendant is alleged to be a Plan fiduciary.

The Complaint seeks to recover the losses to Plaintiffs’ retirement savings caused by the Discount Tire Defendants’ alleged ERISA breaches.