During the third quarter of 2019, 21 ERISA-related lawsuits were filed and/or updated. Each event represents the involved parties either reaching a settlement, filing an appeal or a court decision was made. The parties involved in the ERISA lawsuits in the third quarter included six health-care-related firms, four universities, three financial firms, and prominent companies such as Safeway, Lowe’s and Adidas America.
Health-care firms
- Roman Catholic Diocese of Albany and St. Clare's Corp. were sued by the Legal Aid Society of Northeastern New York, AARP Foundation, Legal Services of NYC for their failures to pay pension benefits. St. Clare's Corp. informed 1,100 former St. Clare's Hospital employees previously that they would receive either drastically reduced pension benefits or no benefits at all.
- The U.S. District Court in Winston-Salem dismissed the request submitted by Atrium Health's retirement participants to have ERISA apply to Atrium, which utilized an exemption in ERISA to achieve more flexibility in managing benefit plans.
- CHS/Community Health Systems Inc. and Principal Financial Group were sued by participants in the company's 401(k) plan, alleging the company and record keeper violated their fiduciary duties in offering "excessively expensive and poorly performing index funds in the plan that were managed by Principal.”
- A U.S. district judge in Rochester, N.Y., refused to dismiss charges against two retirement plans run by Kaleida Health, filed by current and former participants who allege fiduciary breaches under the Employee Retirement Income Security Act.
- TriHealth Inc.’s 401(k) participants have filed a lawsuit alleging fiduciary breaches, including high fees and almost no passively managed funds options.
- A U.S. District Court judge dismissed a lawsuit submitted by retirement participants of St. Elizabeth Medical Center, ruling that " St. Elizabeth is associated with the Catholic Church," and therefore exempt from ERISA.
Universities
- Massachusetts Institute of Technology and participants in a university 401(k) plan reached a settlement in an ERISA case ahead of the trial date.
- Johns Hopkins University reached a preliminary $14 million settlement with participants in the university's 403(b) plan to address allegations of ERISA violations.
- University of Pennsylvania filed a petition after an appeals court judge reversed portions of a U.S. District Court's dismissal of a lawsuit against the university alleging breach of fiduciary duties of its 403(b) plan. The university’s appeal request was denied.
- A U.S. District Court judge in Washington dismissed an ERISA fiduciary breach claim by a participant in two defined contribution plans managed by The George Washington University, saying the plaintiff lacked standing to sue.
Financial firms
- A U.S. District Court judge in Cedar Rapids, Iowa, rejected a petition by Transamerica Corp. to dismiss an ERISA fiduciary breach lawsuit against the company. Participants alleged that plan managers imprudently retained six proprietary, poor-performing investment options and failed to adequately monitor the performance of plan managers.
- A federal appeals court in San Francisco reversed a federal District Court decision that supported the plaintiff and ruled that Charles Schwab Corp. can compel arbitration in a complaint that the company's 401(k) plan managers violated their fiduciary duties under ERISA.
- 401(k) plan participants of BBVA Compass Bancshares filed a lawsuit against the company, alleging that plan managers violated ERISA fiduciary duties and failed to provide low-cost investment options.
Other organizations
- Safeway Inc. and Aon Hewitt Investment Consulting Inc. agreed to a combined $8.5 million settlement with participants in Safeway's 401(k) plan for charging excessive fees.
- A District Court judge has denied a motion from Lowe's Cos. to dismiss a class-action lawsuit alleging fiduciary breaches in its 401(k) plan for investments in risky Hewitt Growth Fund.
- Two participants of Adidas America Inc’s 401(k) plan have sued the company, claiming the plan's high administrative fees violate ERISA rules.
Non-ERISA stories (by date order)
During the third quarter of 2019, 12 stories were written on non-ERISA lawsuits that involve legal prosecution or settlements; 45 legislation and regulation stories were written.
September
- The Senate confirmed Eugene Scalia as the next secretary of labor in a 53-44 vote.
- The Financial Transparency Act was reintroduced by two members of the House Financial Services Committee, Carolyn Maloney and Patrick McHenry, and it calls for the Treasury secretary to create uniform, machine-readable data standards for information reported to financial regulatory agencies.
- The U.K.’s top judges determined that Prime Minister Boris Johnson’s controversial decision to suspend Parliament was unlawful, which supports MPs who seek to prevent Mr. Johnson from pulling the country out of the European Union by Oct. 31 without a deal.
August
- Sangamon County Associate Judge Jack D. Davis II rejected the petition filed by Warlander Asset Management and John Tillman, CEO of the Illinois Policy Institute, who claimed that Illinois' record pension bond sale in 2003 and debt issued in 2017 were deficit financing that violated the state constitution.
- CalSTRS filed a motion to be added to a derivative lawsuit against Facebook's leadership and Mark Zuckerberg, along with Fireman's Retirement System of St. Louis and retail investor Karen Sbriglio. Facebook disclosed in March 2018 that Cambridge Analytica accessed Facebook users’ private data without their permission.
- Union participants in the Oregon Public Employees' Retirement System filed a petition with the Oregon Supreme Court alleging that changes mandated by Senate Bill 1049 that increase some employee contributions violate Oregon's state constitution.
July
- The House Ways and Means Committee hosted a hearing on the Social Security 2100 Act, which aims to bolster Social Security while implementing an across-the-board benefit increase for current and new beneficiaries and improving cost-of-living adjustments, among other provisions.
- Alexander Acosta resigned as labor secretary, following fallout from his handling of plea deal negotiations with billionaire sex offender Jeffrey Epstein in 2007-’08.
- Christine Lagarde resigned as managing director of the International Monetary Fund, following her nomination as the next European Central Bank president.
