Breaking Legal News & Current Law Headlines | Daily Legal Briefing
  • Home
  • Hot Topics
  • Breaking
  • Business
  • Big Law
  • Small Law
  • Law School
  • Legal Tech
No Result
View All Result
No Result
View All Result
Breaking Legal News & Current Law Headlines | Daily Legal Briefing
No Result
View All Result
Home Breaking

SCOTUS probes limits of excessive-fees claims over retirement plans

Daily Legal Briefing by Daily Legal Briefing
December 7, 2021
in Breaking
0
SCOTUS probes limits of excessive-fees claims over retirement plans
4
SHARES
32
VIEWS
Share on FacebookShare on Twitter


The sun sets at the U.S. Supreme Court building, November 29, 2021. REUTERS/Leah Millis

  • High court could put up hurdles to class actions over retirement plan fees
  • Case involving Northwestern University created circuit split
  • Conservative justices concerned about impact of plaintiff-friendly ruling

The company and law firm names shown above are generated automatically based on the text of the article. We are improving this feature as we continue to test and develop in beta. We welcome feedback, which you can provide using the feedback tab on the right of the page.

(Reuters) – Conservative justices on the U.S. Supreme Court voiced concerns on Monday that a low bar for suing over high fees in employee retirement plans could invite more class-action lawsuits second-guessing plan administrators’ investment strategies.

The court heard oral arguments in a case against Northwestern University over whether a plan’s inclusion of higher-fee investment options is by itself enough to support a claim that administrators breached their duty of prudence under federal employee benefit law.

A group of Northwestern employees and retirees, represented by David Frederick of Kellogg Hansen Todd Figel & Frederick, say their 2018 proposed class action should survive a motion to dismiss because they adequately alleged that the school failed to take steps to minimize the fees it paid to some funds.

Register now for FREE unlimited access to reuters.com

Justices Brett Kavanaugh and Clarence Thomas on Monday said allowing more excessive-fee cases to proceed toward trial had real-world implications for plans, including a potential uptick in lawsuits attacking plans’ investment decisions rather than the negligent conduct deemed imprudent under Employee Retirement Income Security Act of 1974 (ERISA), and added pressure on plan administrators to enter into multimillion-dollar settlements.

The case is one of roughly two dozen filed since 2016 accusing colleges and universities of violating ERISA by failing to monitor retirement plans, drop underperforming funds or limit fees, and the first to reach the Supreme Court.

The 7th U.S. Circuit Court of Appeals last year said that because Northwestern’s retirement plan offered a range of investment options that included lower-fee funds, the plaintiffs could not state a claim under ERISA.

The court split with the 3rd and 8th Circuits, which have recently ruled that allowing high-fee investment options can negatively impact plans as a whole and therefore could be considered imprudent under ERISA.

The Supreme Court granted certiorari in the Northwestern case in July.

Gregory Garre of Latham & Watkins, who represents Northwestern, told the Supreme Court on Monday that endorsing a lower standard for excessive-fee claims would push more cases into the costly discovery process even when the underlying claims lack merit, and force courts to micromanage retirement plans.

Justice Sonia Sotomayor, echoing other liberal justices, told Garre that settlements in similar cases and changes universities have made in response to litigation have clearly benefited workers and retirees.

“We may not have a rule as wide as the petitioner wants, but there has to be a happier medium than what you’re advocating and what the 7th Circuit has [ruled],” she said.

The case is Hughes v. Northwestern University, U.S. Supreme Court, No. 19-1401.

For the plaintiffs: David Frederick of Kellogg Hansen Todd Figel & Frederick

For Northwestern: Gregory Garre of Latham & Watkins

For DOJ: Solicitor General Elizabeth Prelogar

Register now for FREE unlimited access to reuters.com

Daniel Wiessner

Dan Wiessner (@danwiessner) reports on labor and employment and immigration law, including litigation and policy making. He can be reached at daniel.wiessner@thomsonreuters.com.



Click to Read Original Article

Previous Post

Davis Polk Smashes Bonus Scale Again With Year-End Bonuses PLUS More Special Bonuses

Next Post

Privilege Analytics From H5: The Best Way To Handle Privilege Review

Daily Legal Briefing

Daily Legal Briefing

Related Posts

More U.S. colleges turn to law schools to find their next president
Breaking

More U.S. colleges turn to law schools to find their next president

by Daily Legal Briefing
December 8, 2021
NLRB considering overhaul of test for approving smaller unions
Breaking

NLRB considering overhaul of test for approving smaller unions

by Daily Legal Briefing
December 8, 2021
Cravath plays bonus catch-up as larger law firm payouts spread
Breaking

Cravath plays bonus catch-up as larger law firm payouts spread

by Daily Legal Briefing
December 8, 2021
Mass tort TV ads in serious slump as pandemic drags on
Breaking

Mass tort TV ads in serious slump as pandemic drags on

by Daily Legal Briefing
December 8, 2021
Prosecutors call ex-boyfriend of Ghislaine Maxwell accuser to testify at trial
Breaking

Prosecutors call ex-boyfriend of Ghislaine Maxwell accuser to testify at trial

by Daily Legal Briefing
December 8, 2021
Next Post
Privilege Analytics From H5: The Best Way To Handle Privilege Review

Privilege Analytics From H5: The Best Way To Handle Privilege Review

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Premium Content

Defendants should get initial appearance before judge within 24 hours, report says

Defendants should get initial appearance before judge within 24 hours, report says

January 22, 2022
Me After Reading Contracts – Above the Law

Me After Reading Contracts – Above the Law

July 8, 2023
What Rights Do Texas Employees Have?

What Rights Do Texas Employees Have?

October 14, 2022

Browse by Category

  • Big Law
  • Breaking
  • Business
  • Hot Topics
  • Law School
  • Legal Tech
  • Small Law

About US

Breaking Legal News & Current Law Headlines | Daily Legal Briefing.
Online coverage of breaking legal news and current law headlines from around the US. Top stories, videos, insight, and in-depth analysis.

Categories

  • Big Law
  • Breaking
  • Business
  • Hot Topics
  • Law School
  • Legal Tech
  • Small Law

Recent Updates

  • Biglaw Not As Plugged Into AI As We Thought
  • 5 Things Every New In-House Counsel Should Know
  • eDiscovery Assistant, Legal Research Platform for E-Discovery, Adds AI-Generated Case Law Summaries

© 2021 Daily Legal Briefing | Breaking Legal News & Current Law Headlines

No Result
View All Result
  • Contact Us
  • Home

© 2021 Daily Legal Briefing | Breaking Legal News & Current Law Headlines

Are you sure want to unlock this post?
Unlock left : 0
Are you sure want to cancel subscription?