Sidley has played a significant role in developing the case law that governs “stock drop” cases, and we have built an experience base that includes every nuance of defending against challenges to the prudence of company stock as an investment option in a 401(k) plan. Sidley is defending the nation’s leading companies, as well as their officers and directors, against these claims.
Owens Corning (6th Cir.)
- Based on the statute of limitations, we won summary judgment in favor of Owens Corning’s CEO and members of the senior management team.
- The Sixth Circuit clarified important questions about how to interpret ERISA’s three-year “actual knowledge” statute of limitations and when a claim for breach of fiduciary duty accrues. Brown v. Tober, 622 F.3d 564 (6th Cir. 2010).
Tribune Company (7th Cir.)
- The firm won dismissal of all claims against Tribune Company in a class action filed on behalf of participants in the company’s 401(k) plans.
- The Seventh Circuit observed that “ERISA imposes no duty on plan fiduciaries to continuously audit operational affairs.” Pugh v. Tribune Co., 521 F.3d 686 (7th Cir. 2008).
Hartford Financial Services Group (D. Conn.)
- Plaintiffs brought ERISA and securities class actions alleging that 401(k) plan fiduciaries acted imprudently by continuing to offer Hartford stock as an investment option during the financial crisis in 2008 and 2009.
- By preemptively producing key documents in advance of formal discovery, we were able to negotiate a highly favorable settlement without significant expense. We also won dismissal of the 10b-5 class action.
BMO Harris (Marshall & Illsley) (7th Cir.)
- The U.S. Court of Appeals for the Seventh Circuit for the first time announced that it was adopting the Moench presumption of prudence to evaluate claims alleging that it was imprudent for plan fiduciaries to follow plan terms requiring that company stock be made available as an investment option, and held that plaintiffs did not allege sufficient facts to overcome the presumption. The Court also expressed “fundamental doubts” about the common theories of liability in 401(k) stock drop cases, recognizing that “it will be difficult” for any future plaintiff to rebut the presumption of prudence. The Court noted that, absent misrepresentations or other misconduct, “plaintiffs in such cases under ERISA must try to hit a very small and perhaps non-existent target.”
Dex One (N.D. Ill.)
- We are defending Dex One Corporation (formerly known as R.H. Donnelley Corporation) in a putative class action arising out of Donnelley’s bankruptcy filing.
- We won the dismissal of plaintiffs’ misrepresentation claims at the pleadings stage and narrowed the scope of the class by arguing that releases signed by former employees barred their claims. This case has created favorable precedent supporting the enforcement of similar releases.
JPMorgan Chase Bank, N.A. (W.D. Wash.)
- We won dismissal of all claims against JPMorgan Chase Bank, N.A. in a stock drop case involving a 401(k) plan sponsored by Washington Mutual, Inc.
- After Chase acquired certain WaMu assets, plaintiffs sought to hold Chase liable on a successorship theory, but the district court rejected the theory and dismissed all claims against our client. In re Washington Mutual, Inc. Secs., Derivative & ERISA Litig., No. 2:08-md-1919, 2009 WL 3246994 (W.D. Wash. Oct. 5, 2009).
Huntington Bancshares (S.D. Ohio)
- We won dismissal of all claims against Huntington Bancshares, as well as its officers and directors, in one of the first stock drop cases arising from the subprime lending crisis.
- “ERISA was simply not intended to be a shield from the sometimes volatile financial markets.” In re Huntington Bancshares Inc. ERISA Litigation, 620 F. Supp. 2d 842 (S.D. Ohio 2009).
Kmart Corp. (E.D. Mich.)
- Sidley represented the former CEO and Chairman of the Board of Kmart Corporation in an ERISA stock drop case.
- After we prevailed in a separate arbitration that raised some of the same issues, the case settled on favorable terms.
Principal Trust Company (D. Neb.)
- We are defending Principal Trust Company in an ERISA class action arising out of the bankruptcy of TierOne Bank that challenges the prudence of continued investment in TierOne stock.
Aon Corporation (N.D. Ill.)
- This ERISA class action involving Aon’s 401(k) plan arose out of a subpoena that the New York Attorney General served on Aon and others seeking information about compensation arrangements between insurance companies and brokers. The case settled on favorable terms.
AT&T Corp. (D.N.J.)
- Plaintiffs filed ERISA and securities class actions alleging that 401(k) plan fiduciaries acted imprudently by continuing to offer AT&T stock as an investment option.
- This case was resolved on a favorable basis while AT&T’s motion for summary judgment was pending. We resolved the securities class action on a similarly favorable basis after several weeks of trial.