18th Annual Workplace Class Action Report - 2022 Edition

360 Annual Workplace Class Action Litigation Report: 2022 Edition requested fee corresponded with the appropriate 3.3 lodestar multiple that the Court analyzed. Moreover, in light of the reasonable calculation of costs and benefit obtained for the class, the Court approved Plaintiffs’ requests for litigation expenses, settlement administration costs, and class representative service awards. Finally, the Court analyzed the parties’ settlement against the class certification requirements of Rule 23. The Court found numerosity easily satisfied, and also reasoned that Plaintiffs’ action raised common questions over whether the Plan’s investment options created a conflict of interest and whether its allegedly uncontrolled recordkeeping expenses amounted to a breach of duty under the ERISA. Id. at *34. The Court further held that the class representatives shared common interests with the class members and that Plaintiffs’ counsel adequately represented the interests of the class. Finally, because Plaintiffs could have obtained class certification pursuant to either Rule 23(b)(1)(A) or (b)(1)(B), the Court found the settlement to be sufficient under Rule 23. Therefore, the Court granted Plaintiffs’ motion for final settlement approval and awarded attorneys’ fees, costs, and representative service awards. Pledger, et al. v. Reliance Trust Co., 2021 U.S. Dist. LEXIS 105868 (N.D. Ga. March 8, 2021). Plaintiffs, participants in the Insperity 401(k) Plan (the "Plan"), a defined contribution pension retirement benefit plan, filed a class action alleging that Defendants breached their fiduciary duties and conducted prohibited transactions under the ERISA in several ways including: (i) by selecting untested proprietary funds as investment options for the Plan and retaining those funds despite their poor performance, which benefited Defendants at the expense of participants; and (ii) by paying the Plan’s record-keeper excessive administrative expenses and failing to monitor and control the amount of those administrative expenses. The parties reached a proposed class action settlement that resolved Plaintiffs’ claims and jointly moved for final approval of the settlement. Plaintiffs also moved for an award of attorneys’ fees as well as representative awards. The Court granted the parties’ motions in all respects. Under the settlement agreement, Reliance agreed to pay $39.8 million into an interest-bearing account ("Settlement Fund") to compensate class members for their alleged losses, attorneys’ fees and expenses, class representatives’ fees, and notice and administration costs. After conducting a fairness hearing, the Court found that the terms of the settlement were fair, reasonable, and adequate within the meaning of Rule 23(e)(2). Further, the Court determined that the relief provided to the class was adequate, taking into account the complexity of the case and the likelihood of a protracted appeal regardless of the Court’s decision after trial. The Court noted that the size of the settlement was one of the largest of its type, and continued litigation would likely would have involved additional attorneys’ fees and expenses inherent with an appeal with a final resolution potentially many years later. The Court also approved class counsel’s request for a percentage-based award of attorneys’ fee equal to one-third of the monetary recovery, amounting to $13,266,266, reimbursement of $705,172.30 in litigation expenses, and class representative awards of $25,000 for each of the class representatives. As to the attorneys’ fees, the Court opined that class counsel obtained a substantial award for the class, which was one of the largest settlements of this type of litigation. Furthermore, most class members would not have to file a claim form, but instead would automatically receive their distributions into their tax- deferred retirement accounts, which the Court concluded weighed in favor of the requested fee. For these reasons, the Court approved the settlement, and found that the plan for distribution of the Settlement Fund was fair, reasonable, and adequate, and in the best interest of the class members. (xix) Standing Issues In ERISA Class Actions Fisher, et al. v. Secchitano, 2021 U.S. App. LEXIS 365 (9th Cir. Jan. 7, 2020). Plaintiff brought a putative class action asserting that the Inlandboatmen’s Union of the Pacific National Pension Plan (“the Plan”) violated the ERISA. The District Court previously had dismissed Plaintiff’s complaint, as the alleged breach of fiduciary duty involved modification of Plan benefits to address unfunded vested benefit (“UVB”) and the District Court had found that the amendment of Plan benefits was not subject to fiduciary review. Plaintiff’s complaint depended upon the allegation that the Defendant Trustees breached their duty not to incur UVB liability in the first place based on the 1981 Trust Agreement. The District Court concluded that the six-year statute of limitations of the ERISA precluded the claim because the challenged amendment occurred in 2009 and the suit was not brought until 2018. On appeal, the Ninth Circuit affirmed the District Court’s ruling. The Ninth Circuit concluded that Plaintiff lacked Article III standing to maintain his lawsuit. While the appeal was pending, the U.S. Supreme Court held in Thole v. U.S. Bank N.A., 140 S. Ct. 1615 (2020), that retired participants in a single- employer defined-benefit plan lacked Article III standing to bring a breach of fiduciary duty claim because any breach of fiduciary duty by the plan trustees would not have any impact on their future benefit payments. Id . at