Good morning, ERISA Watchers! It’s been a beautiful sunny weekend here in San Francisco. Unfortunately, it hasn’t been so sunny for participants investing in SunEdison stock. This week’s notable decision is Usenko v. MEMC LLC, No. 18-1626, __F.3d__, 2019 WL 2344827 (8th Cir. June 4, 2019), where the Eighth Circuit affirmed the district court’s dismissal of this putative class action alleging that Defendants breached their duty of prudence with respect to keeping SunEdison stock in the defined-contribution retirement savings plan. Plaintiffs alleged that Defendants knew, or should have known, that between July 20, 2015 and April 21, 2016 that SunEdison was in poor financial condition and they should have removed SunEdison stock from the plan’s assets.
Continue Reading Second and Eighth Circuits Affirm Dismissal of Imprudent Investment Lawsuits Involving SunEdison Stock
Court Holds Employer Has No Affirmative Duty to Inform Participant of Change in Disability Insurers
Good morning, ERISA Watchers! There were several appellate court decisions this past week, but I want to highlight a district court case that presents a good lesson for employers and plan participants alike when it comes to changes to plan benefits. In Boyles, Jr. v. American Heritage Life Insurance Company, et al., No. 3:15-CV-274, 2019 WL 1767565 (W.D. Pa. Apr. 22, 2019), Plaintiff Boyles brought suit for the denial of disability benefits against his former employer, St. Marys Insurance Agency; the president of his former employer, Jeffrey Azzato; the employer’s former long-term disability insurer, Allstate; and the employer’s current LTD insurer, Unum. He also alleged that Azzato and St. Marys breached their fiduciary duties to him.
Continue Reading Court Holds Employer Has No Affirmative Duty to Inform Participant of Change in Disability Insurers
Fourth Circuit Affirms Multi-Million Judgment Against Trustee for Breach of Fiduciary Duty to Employee Stock Ownership Plan
This week’s notable decision is Brundle v. Wilmington Tr., N.A., No. 17-1873, __F.3d__, 2019 WL 1287632 (4th Cir. Mar. 21, 2019), as amended (Mar. 22, 2019), where the Fourth Circuit Court of Appeals affirmed the district court’s findings that the ESOP trustee caused the ESOP to overpay for the corporation’s stock by $ 29,773,250. The district court awarded attorneys’ fees to the participant’s counsel under 29 U.S.C. § 1132(g)(1) in the amount of $ 1,819,631.11 and an additional $1.5 million in fees from the damages award.
On appeal, Wilmington challenged the district court’s liability and damages determinations and its award of $1.5 million in non-statutory attorneys’ fees. Brundle cross-appealed and challenged as inadequate the same portion of the attorneys’ fees award.
Continue Reading Fourth Circuit Affirms Multi-Million Judgment Against Trustee for Breach of Fiduciary Duty to Employee Stock Ownership Plan