This week’s notable decision is the district court opinion in Fitzwater, et al., v. Consol Energy, Inc., et al., No. 1:17-CV-03861, 2020 WL 6231207 (S.D.W. Va. Oct. 22, 2020), a case involving two key issues: (1) whether Plaintiffs, seven former employees of CONSOL Energy, Inc., were misled by ERISA plan fiduciaries about the nature and duration of their health benefits; and (2) whether Defendants discriminated against Plaintiffs based on health status-related factors in violation of ERISA. Specifically, Plaintiffs allege that Defendants made promises of lifetime medical insurance coverage to “non-union miners” and their beneficiaries, while Defendants dispute that any such representations were ever made. Defendants moved to dismiss all seven of Plaintiffs’ causes of action.
Continue Reading District Court Permits Retirees’ Breach of Fiduciary Duty Claim Based on Misrepresentation of Lifetime Health Benefits
Eighth Circuit Revives Excessive Fee Litigation against Washington University
Retirement plan participants received a partial victory from the Eighth Circuit Court of Appeals in one of several actions brought against large universities for the alleged mismanagement of their section 403(b) retirement-savings plans. In Davis v. Washington Univ. in St. Louis, No. 18-3345, __F.3d__, 2020 WL 2609865 (8th Cir. May 22, 2020), the plan participants alleged two separate breach of fiduciary duty claims. The first claim alleges that Washington University allowed the investment-management fees and record-keeping expenses “to get out of control.” The second claim alleges that Washington University allowed several underperforming investments to stay in the plan for too long. The district court (E.D. Mo. – St. Louis) granted the University’s motion to dismiss both claims. The plan participants appealed. The Eighth Circuit affirmed in part, reversed in part, and remanded for further proceedings.
Continue Reading Eighth Circuit Revives Excessive Fee Litigation against Washington University
Johnson & Johnson Escapes Breach of Fiduciary Duty Lawsuit Due to Dudenhoeffer’s Difficult Pleading Standard
This week’s notable decision, Perrone v. Johnson & Johnson, et al., No. CV 19-00923 (FLW), 2020 WL 2060324 (D.N.J. Apr. 29, 2020), is a case involving allegations of investing in company stock when corporate insiders knew, and actively concealed, its talc powder (baby powder) contains asbestos. This is yet another case dismissed for failing to meet the high pleading standard set by the Supreme Court in Fifth Third Bancorp v. Dudenhoeffer, 573 U.S. 409 (2014).
Plaintiffs filed this as a purported class action against Johnson & Johnson, Peter Fasolo and Dominic Caruso, senior executives of the company and members of the benefits committee. Plaintiffs complaint alleges that as early as 1957, Johnson & Johnson knew its talc powder contains asbestos and not only concealed its knowledge for decades but engaged in an active campaign of providing misinformation and misleading statements about the safety of its product. However, in December 2018, Reuters published an article revealing the long history of actively hiding the presence of asbestos in its talc powder. The news article caused Johnson & Johnson’s stock to decline by more than 10%.
Continue Reading Johnson & Johnson Escapes Breach of Fiduciary Duty Lawsuit Due to Dudenhoeffer’s Difficult Pleading Standard