United States: ERISA and Employee Benefits Team Wins Three Breach of Fiduciary Class Actions in a Row
Last Updated: May 12 2006

Thelen Reid’s ERISA and Employee Benefits Team has achieved its third dismissal, with prejudice, of an ERISA breach of fiduciary duty class action suit against a NYSE-listed employer, in as many years.

Recently, in re Administrative Committee ERISA Litigation (N.D. Cal. 2005), Thelen Reid’s ERISA and Employee Benefits Team successfully defended a NYSE-listed employer in "stock drop" litigation. Two ERISA breach of fiduciary duty class actions had been filed in Texas and California by several law firms active in the Enron litigation.

The suits sought more than $30 million in damages arising from sharp declines in the value of pension plan accounts. However, in December 2005, the Northern District Court of California denied the plaintiffs’ motion for class certification and dismissed the consolidated class action with prejudice.

The Thelen Reid team was led by David Bacon, Michael Hallerud, Chuck Dyke and Ellen Papadakis. The Order Denying Motion for Class Certification and Dismissing Consolidated Amended Complaint has been published at 36 Employee Benefits Cas. (BNA) 1865 (N.D.Cal. Dec. 16, 2005); it also appears at 2005 WL 3454126 (N.D.Cal. 2005). 

Another case, Schultz v. Kirkland, U.S. District Court, Oregon, Case No. 00-1377-HA, involved over a dozen consolidated class action ERISA breach of fiduciary duty suits arising from the collapse of Capital Consultants LLC, an investment management firm that had recommended risky investments, primarily to union-sponsored pension plans.

At the time, the U.S. Department of Labor described it as the largest pension fraud case in U.S. history, with losses of approximately $500 million. Plaintiffs’ counsel included the Lieff, Cabraser and Lewis, Feinberg law firms. More than $290 million was recovered in settlements.

Thelen Reid represented one of the largest, deep-pocket employer defendants in the case, obtaining a dismissal with prejudice in December 2005 without the client’s paying a dollar in settlement, but collecting over $60,000 in fees and expense reimbursement from fiduciary liability insurance carriers for union trust funds.

The Thelen Reid team was led by David Bacon and Michael Hallerud.

In Paulsen v. CNF, Inc., 31 Employee Benefits Cas. (BNA) (N.D.Cal. 2003), 2003 U.S. Dist. LEXIS 217000, Thelen Reid obtained (in less than 90 days) a dismissal, with prejudice, of an ERISA class action suit filed by the Lieff, Cabraser and Lewis, Feinberg law firms in the Northern District of California. The suit sought over $250 million in damages for alleged underfunding of a spun-off pension plan.

The Thelen Reid team representing the employer who had spun off the plan was led by David Bacon, Michael Hallerud, Sherwin Kaplan and Michael Schloss.

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