If you don't win a lawsuit the first time, you sue again. And again. And again!
RJR is the third former client to sue Boston-based Wellington in that firm's long-running dispute with former partner Arnold Schneider.
The issues in RJR's suit echo those of the other two: that the client has the right to go with the manager that best suits the client's needs, noncompete agreements notwithstanding.
The most recent defeat to the clients came last month in the 3rd U.S. Circuit Court of Appeals in Philadelphia in a suit brought by Frank Russell Co. (Pensions & Investments, Aug. 24).
Within days of that ruling, attorneys for RJR Nabisco Inc. filed a similar lawsuit in U.S. District Court for the Southern District of New York.
"We had to do this to protect our interest," said RJR spokeswoman Carol Makovich. The $5.5 billion RJR Nabisco fund has $150 million with Schneider Capital Management, Mr. Schneider's year and a half old firm.
If the New York effort fails, attorneys for Utah Retirement Systems are waiting in the wings with Utah's version of the lawsuit.
This would be the second time for Utah Retirement to go to court with a complaint in this matter. It tried in March to get an injunction to stop Wellington from pursuing Mr. Schneider, but a Utah federal judge ruled in Wellington's favor. This time, Utah will seek damages.
Utah Retirement wasn't put off by that the previous defeat because, "Mr. Schneider is clearly one of our best performing managers," said Kevin Howard, Utah Retirement's attorney.
All the hoopla over one manager is uncommon, said Tom Pipich of Buck Consultants Inc., Philadelphia,particularly in an industry where money managers frequently leave to start their own firms.
"If you're prohibited from hiring them, you hire someone else. Odds are, whoever you've hired isn't the one and only," he said.