- In In re Schering Plough Corp. ERISA Litig., 2009 WL 4893649 (3d Cir. Dec. 21, 2009), the Third Circuit vacated the district court's ruling granting class certification in an ERISA stock-drop litigation. In so ruling, the court made three principal findings. First, the court ruled, contrary to the district court's decision, that ERISA Section 410(a) does not prohibit parties from releasing claims for breach of fiduciary duty because that section applies only to instruments that purport to alter a fiduciary's statutory duties and responsibilities, whereas an individual release or covenant not to sue merely settles an individual dispute without altering a fiduciary's statutory duties and responsibilities. Second, the court concluded that the release plaintiff signed did not bar her from commencing an action under Section 502(a)(2) on behalf of the plan, although it may bar the plaintiff from obtaining any recovery. Third, the court ruled that, on remand, the district court should conduct a "rigorous analysis" to determine whether the release signed by plaintiff will cause her claims to be atypical of the class or cause her to be an inadequate class representative. Because the district court had concluded that the release was invalid under Section 410(a), it had not conducted this analysis.
- In Loomis v. Exelon Corp., 2009 WL 4667092 (N.D. Ill. Dec. 9, 2009), a district court dismissed an excessive fee case for failure to state a plausible claim because its claims alleging nondisclosure of revenue-sharing and excessive fees were “indistinguishable” from those in Hecker v. Deere. Exelon’s plan offered nineteen retail and wholesale investment funds with fees from 0.03% to 0.96%, whereas the plan in Hecker offered twenty-five retail funds with fees from 0.07% to just over 1%, as well as access to a brokerage window. Plaintiffs alleged, unlike in Hecker, that the funds were “far more expensive than what Defendants could have obtained for the same investment management services” and plaintiffs received no “additional benefits” from the retail fees. Observing that there was no allegation that the funds offered were “unsound or reckless,” the court concluded that these allegations were insufficient to distinguish the case from Hecker. The court also concluded that this case provided stronger support for dismissal on the pleadings because the fees in this case were lower than those in Hecker.
- In Hochstadt v. Boston Scientific Corp., 08 Civ. No. 12139 (D. Mass.), plaintiffs asserted various fiduciary breach claims in connection with maintaining the company stock fund as an investment fund option in the 401(k) plan. On December 1, 2009, plaintiffs submitted a motion for an order preliminarily approving a settlement that requires Boston Scientific to pay $8.2 million into a settlement fund. The proposed settlement also states that plaintiffs’ attorneys’ fee application will not seek more than one-third of the settlement fund.
A district court approved a $15.9 million settlement in the U.S. Sugar ESOP litigation, in which plaintiffs alleged that U.S. Sugar breached its fiduciary duties by not informing them of an offer to buy the company’s stock for around $300 per share, or considering that offer in valuing the stock, while repurchasing retirees’ stock at around $200 per share. In re United States Sugar Corp. Litigation, No. 08-80101 (S.D. Fla. Jan. 4, 2010). The settlement, in a suit that reportedly sought $150 million, calls for a payment of $8.4 million to plan participants ($5.5 million after fees and expenses), and another $7.5 million as long as U.S. Sugar sells its assets in the next two years as expected.