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S.D.N.Y. Denies Estee Lauder Inc.’s Motion to Stay ERISA Class Action

by | Aug 22, 2021 | ERISA Cases, Firm News

On August 22, 2021, the United States District Court for the Southern District of New York issued an order denying a Motion to Stay All Proceedings filed by Defendants Estee Lauder Inc., the Board of Directors of Estee Lauder, and the Estee Lauder Inc. Fiduciary Investment Committee.

The Motion to Stay asked the court to halt a class action lawsuit alleging violations of the Employee Retirement Income Security Act, 29 U.S.C. §§ 1001, et seq. (“ERISA”), until the U.S. Supreme Court issues a decision in Hughes v. Northwestern Univ., 953 F.3d 980 (7th Cir. 2020), cert. granted, No. 19-1401 (U.S. July 2, 2021).

Defendants’ Arguments in Support of the Motion to Stay

Defendants’ motion asserted that the Supreme Court’s decision in Hughes could control whether Plaintiffs in Estee Lauder assert viable claims for breach of ERISA’s fiduciary duties. Estee Lauder argued that, like Hughes, the participants in The Estee Lauder Companies 401(k) Savings Plan claim that Defendants breached their fiduciary duties of prudence based on allegedly unreasonable recordkeeping fees, excessive investment fees, and poor investment performance.

Plaintiffs’ Opposition to the Motion to Stay

Counsel for Plaintiffs, including Edelson Lechtzin LLP, opposed the motion, arguing that it could take eleven months before the Supreme Court issues a decision in Hughes. Plaintiffs would surely be prejudiced by a lengthy stay, which would prevent them from moving forward with discovery and from securing the evidence they need to proceed to trial.

Plaintiffs further argued that Estee Lauder has continued to maintain imprudent investment options in the 401(k) Plan and the per-participant recordkeeping costs remain unreasonable. A stay of this action will put the Plan and its participants on hold without recourse for nearly a year. During this time, the Plan will continue to incur excessive fees and lower investment returns further dwindling the Plan participants’ retirement savings.

On the other hand, Defendants would not be inconvenienced by moving ahead with the litigation. Nor would a stay promote judicial economy.

What should you do if you suspect that your retirement plan is being mismanaged?

Call the attorneys of Edelson Lechtzin LLP at 844-696-7492 (toll-free) to learn more about your rights concerning your 401(k) or 403(b) retirement account or click here to submit your info.

Edelson Lechtzin LLP is a national class action law firm with offices in Pennsylvania and California. In addition to cases involving employee retirement plans, our lawyers focus on class and collective litigation in cases alleging violations of the federal antitrust laws, securities and investment fraud, wage theft and unpaid overtime, consumer fraud and consumer protection, and dangerous and defective drugs and medical devices.