ABB Case Shows Danger of “Scorched Earth” Approach to Defending Retirement Plan Cases, Says Law360 Article
On September 4, 2019, Law360 published an article describing the settlement of a class action lawsuit handled by Schlichter Bogard & Denton as a “cautionary tale” for defendants and insurers in retirement plan litigation. The case, brought by participants in ABB Inc.’s retirement plan, settled in March 2019 for $55 million after over 12 years of litigation, including a trial and multiple appeals.
The $55 million settlement was $18.1 million more than the trial court ordered ABB to pay in 2012. ABB had paid its attorneys $42 million to defend the case as of 2010—and the case was litigated for nine more years.
Prior to 2006, when the suit was filed, there “had never been a case brought for excessive fees in a 401(k) plan,” said Jerry Schlichter, managing partner of Schlichter Bogard & Denton. Insurance companies took a “scorched-earth approach to defending cases,” refusing to settle, or “even entertain the concept of settlement” regardless of cost or exposure, he said.
The article may be found here (subscription req’d). For further information about Schlichter Bogard & Denton’s ERISA and Financial Abuse practice, please contact Schlichter Bogard & Denton at 1-800-873-5297 or firstname.lastname@example.org.