Bailey Glasser Defeats Motion to Dismiss in Schwab Managed 401(k) Action

BG secured an important win for employee participants of the Vituity and MedAmerica 401(k) retirement plan. On Friday, U.S. District Court Judge Richard Seeborg of the Northern District of California ruled on a motion to dismiss filed by CEP America and the MedAmerica Retirement & Benefits Committee, which oversees the 401(k) plan offered to employees and retirees of Vituity and MedAmerica. In his ruling denying the motion in part, Judge Seeborg noted that the Complaint alleges that the fees charged by recordkeepers to other 401(k) plans “were multiples less than those charged” by Schwab.

The employees, represented by Greg Porter, BG’s ERISA Practice Group Leader, and ERISA partner Mark Boyko, allege that the Defendants violated ERISA laws by allowing millions of dollars of their retirement savings to go to Schwab’s recordkeeping arm and to MedAmerica. The Plaintiffs also alleged that Schwab’s excessive compensation included Schwab receiving benefits from the 401(k) Plan’s use of Schwab’s bank savings account.

“Employers need to understand and accept their responsibility for prudently managing 401(k) plans free from conflicts of interest and self-dealing,” Boyko said. “We look forward to pursuing this matter on its merits.”

The case is Nagy, et al., v. CEP America, LLC, et al, No. 23-cv-5648, and is pending in the Northern District of California.

BG’s award-winning ERISA, Employee Benefits & Trust Litigation practice has been ranked by Chambers & Partners in the Nationwide ERISA Litigation: Mainly Plaintiffs category. Learn more about our ERISA services here.

Greg Porter, BG’s ERISA Practice Group Leader, has also received top rankings by Chambers in Nationwide ERISA Litigation: Mainly Plaintiffs (Band One). Learn more about his practice here.

And for more on ERISA partner Mark Boyko, visit here.

#ERISA #401k #Retirement

Larry Lederer Named a 2024 Lawdragon Top 500 Plaintiff Financial Lawyer

Bailey Glasser partner Lawrence J. Lederer is included in Lawdragon’s 2024 500 Leading Plaintiff Financial Lawyers guide, now for a sixth year in a row. We thank Lawdragon and everyone who participated in his once again being included on this esteemed list, a true testament to how much Larry cares about his clients, the hard work he puts into their cases, and the results he achieves.

Larry has extensive experience litigating securities, commercial, consumer class actions, and other cases in federal and state courts throughout the United States. In the last year, he’s brought impactful litigations to help people who have had issues related to violation of privacy laws, mortgage lending and finance, telemarketing and the non-funding of PPP loans which continue to affect small businesses across the country.

This Lawdragon recognition is especially prestigious as the 500 lawyers were selected through a process of “select[ing] members of this guide through our time-honed process of submissions, independent research and vetting with friends and foes.”

See the full list here.

To learn more about Larry Lederer, please visit this link.

BG Wins Writ of Prohibition Before State of West Virginia Supreme Court of Appeals

A Bailey Glasser litigation team composed of founding partner Ben Bailey and lawyer Christopher Smith succeeded in obtaining a writ of prohibition from the State of West Virginia Supreme Court of Appeals on behalf of our client, Pachira Energy.

In this action for extraordinary relief, Pachira sought a writ of prohibition to prevent the Circuit Court of Monongalia County from a January 2023 order by that court which ordered disassociation of a partnership even though no party to the litigation sought disassociation in the underlying litigation. The underlying litigation involved the requested dissolution and winding up of a partnership under the West Virginia Revised Uniform Partnership Act. However, instead of ordering this dissolution, the circuit court disassociated Pachira from the partnership, effectively kicking it out of the partnership while allowing the partnership to continue operating.

In recognizing that “extraordinary remedies are reserved for ‘really extraordinary causes,’ the appellate court found for our client and determined that: “[a]fter a careful review of the parties’ arguments, the record before this Court and the applicable law, we conclude that the circuit court committed a clear legal error in ordering dissociation when that relief was not requested by either party. Accordingly, we grant the petition for writ of prohibition, vacate the order dissociating Pachira from the water system association, and remand this case to the circuit court for further proceedings.”

Obtaining relief of this nature is rare, but our litigators felt was warranted in this particular case. The case is now back before the Circuit Court for additional litigation. To read the Court’s Memorandum Decision, please visit here.

Sharon Iskra Argues Case Before Supreme Court of Appeals of West Virginia

On April 17, BG partner and Institutional Abuse and Neglect team leader Sharon Iskra argued before the Supreme Court of Appeals of West Virginia in support of a $3.5 million jury verdict rendered against a residential care facility on behalf of two developmentally disabled individuals who had been abused as children.

As April is Child Abuse Prevention Month as well as Sexual Assault Awareness Month, Sharon was proud to argue on behalf of her clients before the Supreme Court of Appeals of West Virginia.

To learn more about Sharon and her work, visit this link.

To learn more about the work of Bailey Glasser on behalf of the survivors of sexual abuse, visit here.

Brian Glasser Named a Top 200 Lawyer in America by Forbes

Bailey Glasser founding partner Brian Glasser has been named one of “America’s Top 200 Lawyers” by Forbes in its first-ever elite lawyer list.

Forbes described its criteria as follows: “[t]he elite lawyers on this list were selected through a rigorous, multi-stage process of researching, evaluating and rating thousands of candidates, conducted by an editorial team with broad experience in law practice and the legal marketplace. The result is a collection of top lawyers involved in the most consequential cases, deals or legal trends in recent years . . . . they all share reputations for integrity, records of excellence—and Forbes’ recognition as the best in the business. What follows is a power list of lawyers whose skill, passion and purpose set them apart—for when you or your business need it most.”

In the last two years alone, Brian won a $5 million award against MyPillow CEO and election conspiracist Michael Lindell; helped lead the challenge to Johnson & Johnson’s “Texas Two Step” bankruptcy maneuver on behalf of people injured by J&J’s asbestos-riddled talc products; helped win dismissal of the bankruptcy of 3M subsidiary Aearo Technologies by a federal judge which thereafter resulted in the $6 billion settlement of more than 260,000 lawsuits brought by veterans and U.S. service members alleging that 3M military earplugs caused their hearing loss; and has won tens of millions of dollars for his clients in other lawsuits. He has also led the filing of hundreds of lawsuits on behalf of people abused as minors by the State of Maryland’s juvenile hall facilities via a new law passed in October 2023 that permitted previously time-barred claims by abuse survivors.

Read more here.

Bailey Glasser Wins Partial Summary Judgment in Symbria ESOP Litigation

On March 25, 2024, Bailey & Glasser, LLP won a motion for partial summary judgment in the U.S. District Court for the Northern District of Illinois in the case Placht v. Argent Trust Company, Case No. 21-cv-5783. The lawsuit claims that Argent, the trustee for the Symbria Inc. Employee Stock Ownership Plan (the “ESOP”), caused the ESOP to purchase $66,500,000 of Symbria, Inc. stock for more than fair market value, violating federal pension law in the ERISA statute. The court held that the plaintiff proved every element of her ERISA prohibited transaction claims, removing the need to provide additional proof of these elements at trial.

The court made important rulings of law in favor of the plaintiff and beneficiaries of employee benefit plans generally.

First, the court rejected Argent’s argument that the plaintiff’s claim that Argent caused the ESOP to engage in a prohibited transfer of plan assets to “parties in interest” to the ESOP requires a showing of subjective intent to benefit such parties through the transfer. The court explained that rejecting a subjective intent requirement comports with Congress’ intent for the statute to set forth per se violations, for which the parties’ intent should have no bearing as to whether a violation occurred. This has been a hotly contested issue in ERISA litigation.

Second, the court rejected Argent’s argument that an affirmative defense that the ESOP paid “adequate consideration” thwarted the plaintiff’s claims concerning the allegedly prohibited and imprudent stock transaction. Referring to facts adduced by the plaintiff and the plaintiff’s experts’ analyses, the court held that “factual questions exist as to whether Argent acted prudently and ensured that the Plan paid no more than ‘adequate consideration’ for the Symbria stock.” Therefore the plaintiff’s “claims and Argent’s defenses with respect to the ESOP Transaction must proceed to trial.” This decision puts plan fiduciaries to their proof and is precedent that, rather than being decided on a premature summary judgment, trials are required on the fact-intensive inquiry into the diligence of trustees’ stock valuations and transaction negotiations.

For more visit here.

Arthur Bryant Speaking at Class Action Law Forum

BG’s Arthur Bryant is speaking at next week’s 6th annual Western Alliance Bank Class Action Law Forum (CALF) held in collaboration with the University of San Diego School of Law. Attendees will hear insights and take part in discussions on the most important developments and issues surrounding class actions and mass torts, with panelists including sitting federal judges and top defense and plaintiffs’ attorneys.

For more information and to register, please visit: https://events.westernalliancebank.com/2024-CALF

WaPo: “Mike Lindell Must Pay Man $5M in ‘Prove Mike Wrong’ Challenge, Judge Says”

Mike Lindell, MyPillow founder and 2020 election conspiracy theorist, has lost his challenge to the multi-million-dollar arbitration award made in favor of Robert Zeidman, a respected cyber expert. BG’s Brian Glasser and Cary Joshi represent Mr. Zeidman in this matter, as well as partner Lori Bullock and paralegal Manuel Rios.

Following the 2020 election, Lindell prominently trumpeted the false theory that the 2020 presidential election involved alleged Chinese government hacking that resulted in votes cast for Donald Trump being switched to Joe Biden. In July 2021, Mike Lindell sponsored his own so-called “Cyber Symposium”, which he said would provide an opportunity for technical experts in cyber forensics to examine and evaluate the evidence presented by Lindell. Lindell was so confident in the validity of his so-called “evidence” that, as part of his Cyber Symposium, he held the “Prove Mike Wrong Challenge” and offered a $5 million prize to anyone who could prove the data was not valid.

As described in this Washington Post article, Zeidman compiled a report of his findings and sent a letter to Lindell’s firm asking for the reward, and filed for arbitration after Lindell denied his payment request. The arbitration panel required Lindell to pay Zeidman within 30 days, and when it was not paid Zeidman asked a federal court to confirm his arbitration award. On Wednesday, the federal district judge in Minnesota upheld the previous ruling from the arbitration panel and Zeidman is now owed the $5 million payout plus interest.

“The chances of a confirmation were in Zeidman’s favor,” Brian Glasser said, as arbitration rulings are upheld unless they are found to be obtained by “corruption, fraud or undue means.”

Read the full Washington Post article here.

To learn more about this case please visit here.

#ProveMikeWrong #BaileyGlasser #Electionfraud #Arbitration #Litigation

BG Defeats Attempt to Dismiss Federal Class Action ESOP Lawsuit

Another win on behalf of protecting company employees’ hard-earned money: today, our ERISA team defeated a motion to dismiss that challenged a class action brought on behalf of a class of investors in the Churchill Holdings, Inc. Employee Stock Option Plan where we alleged that the trustees breached their fiduciary duties and engaged in prohibited transactions in violation of ERISA law.

The federal court in Arnold v. Parades (filed in the Middle District of Tennessee), rejected virtually every argument made by defendants. Judge Crenshaw held that the plaintiffs’ individual releases did not bar them from suing on behalf of their ESOP, that the plan’s class action waiver was unenforceable because it prevented effective vindication of statutory rights and violated ERISA’s anti-exculpatory provision, section 410, and that plaintiffs adequately alleged breaches of fiduciary duty and prohibited transactions. Plaintiffs are challenging the fair market value of the stock determination made by the trustee when it terminated the Churchill Holdings, Inc. ESOP.

The Bailey Glasser team includes partner and ERISA Practice Group Leader Greg Porter, partners Mark Boyko, Ryan Jenny, and Patrick Muench, and associate Laura Babiak. Our ERISA team is a leader in protecting ERISA and ESOP plans, and is ranked nationally by Chambers & Partners and Best Law Firms, with Greg Porter also being ranked Band One in ERISA Litigation, Mainly Plaintiffs – USA-Nationwide. For more about our ERISA work, please visit here.

To read the Court’s opinion, visit this link.

Federal Appeals Court Vacates District Court Decision in Fresno State Title IX Case, Opens Door for All-Female-Student-Athlete Class Action

In an important appellate victory for six former members of the women’s lacrosse team at Fresno State, the U.S. Court of Appeals for the Ninth Circuit vacated the district court’s orders denying class certification, paving the way for the lawsuit to continue on behalf of all female student-athletes at the university.

First filed in 2021, the lawsuit alleged Fresno State violated Title IX by depriving women of equal opportunities to participate in varsity athletics and equal treatment and benefits. In February 2022, the women sought certification as a class action on behalf of all female student-athletes and/or potential athletes at the school. However, the district court twice denied certification, finding an inherent conflict between athletes who played on different teams.

The Ninth Circuit disagreed, finding the lower court “clearly erred” by holding such a conflict exists as to the equal opportunities claim. The court reached a similar conclusion as to the equal treatment claim, holding the district court erred by failing to analyze it separately.

“Today, the Ninth Circuit opened a door the district court twice tried to slam shut. In a real sense, this order vindicates the brave young women who stood up and demanded that Fresno State provide what Title IX promises—equality,” said BG partner Joshua I. Hammack, who briefed and argued the appeal. “The court confirmed that those who seek equality are not in conflict with those who stand to benefit from it. The fight isn’t over, of course, but today is an important step toward justice.”

In addition to Hammack, the Plaintiffs are represented by lead counsel and Title IX team leader Arthur Bryant, and partners Cary Joshi and Lori Bullock of Bailey Glasser, and Cynthia Chapman, Mike Caddell, and Amy Tabor of Caddell & Chapman.

To read the full press release and Ninth Circuit opinion, please visit here.

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