Company Stock Litigation

Sidley has extensive experience in defending claims that challenge the prudence of company stock as an investment option in 401(k) plans and ESOPs (also known as “stock drop” cases). We are defending corporations and officers and directors against such claims in venues across the country.

Representative matters include:

• White v. Marshall & Ilsley Corp., No. 10-CV-311 (E.D. Wisc. June 21, 2011). The court dismissed with prejudice all claims in a “stock drop” class action against our clients, finding that plaintiffs had failed to state a plausible claim for either imprudently offering a company stock fund or failing to disclose material information about the company’s financial condition to plan participants.
• Brown v. Owens Corning Investment Review Committee, 622 F.3d 564 (6th Cir. 2010). The Court of Appeals upheld judgment in favor of our clients based on the expiration of the statute of limitations.
• Pugh v. Tribune Company, 521 F.3d 686 (7th Cir. 2008). The firm represented Tribune Company in a class action that was filed on behalf of the company’s 401(k) plans and their participants. The Seventh Circuit held that “ERISA imposes no duty on plan fiduciaries to continuously audit operational affairs” and rejected each of plaintiffs’ theories of liability.
• In re Washington Mutual, Inc. Securities, Derivative and ERISA Litig., 2009 WL 3246994 (W.D. Wash. Oct. 5, 2009). On behalf of JPMorgan Chase Bank, N.A., we won the dismissal with prejudice of claims that Chase was liable in a “stock drop” case as a successor to Washington Mutual, Inc.
• In re Huntington Bancshares Inc. ERISA Litig., 620 F. Supp. 2d 842 (S.D. Ohio 2009). We successfully defended Huntington Bancshares Incorporated, members of its Board of Directors and senior management on a motion to dismiss a stock drop lawsuit brought by employees who participated in the Huntington 401(k) plan.