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Washington University in St. Louis Agrees to Settle ERISA Class Action for $7.5 Million

by | Apr 19, 2022 | ERISA Cases

Edelson Lechtzin LLP is pleased to report that a settlement has been reached in a class action lawsuit against the defendant fiduciaries (“Defendants”) of the Washington University in St. Louis Retirement Savings Plan (“Plan”). The insurance carrier for the Defendants will pay a total of $7,500,000 to settle claims that the Defendants violated their fiduciary duties under the Employee Retirement Income Security Act of 1974 (“ERISA”) in managing the Plan and ensuring its fees and expenses remain reasonable. Eric Lechtzin of Edelson Lechtzin LLP is a member of the team of lawyers who represent the Plaintiffs in this case.

The case is Davis, et. al., v. Washington University in St. Louis, et. al., Civil Action No. 4:17-cv-01641-RLW, which is pending in the U.S. District Court for the Eastern District of Missouri (the “Court”).

What is this case about?

Plaintiffs filed a complaint alleging that Defendants breached their responsibilities under a federal law known as ERISA, by causing the Plan to incur excessive fees for recordkeeping and other administrative services. In addition, Plaintiffs allege that Defendants caused the Plan and its participants to pay unreasonable excessive fees by offering higher-cost “retail” investment options when lower-cost
“institutional” options were available.

Why have the parties agreed to a settlement?

Since this case was filed in 2017, the parties have vigorously litigated this action. Early in the case, the Court granted the Defendants’ motion to dismiss. Plaintiffs took an appeal to the U.S. Court of Appeals for the Eighth Circuit, which handed down an opinion and order on May 22, 2020, reversing in part the judgment of the Court and remanding for further proceedings. See Davis v. Wash. Univ. in St. Louis, 960 F.3d 478 (8th Cir. 2020). Notably, the Eighth Circuit Court of Appeals ruled that Plaintiffs had sufficiently alleged that Defendants breached their fiduciary duties by allowing the Plan to pay excessive administrative and investment fees. Id.

After the case was remanded, the Plaintiffs filed an amended complaint, which the Defendants answered. The parties then engaged in extensive pre-trial discovery, which included the Defendants’ production of more than 113,000 pages of documents, and depositions of numerous witnesses. The parties also present expert witnesses on damages and other topics.

How was the Settlement reached?

On January 26, 2022, the parties engaged in a mediation before a mediator who has extensive experience handling ERISA fiduciary-breach lawsuits. Although the parties did not reach an agreement during the mediation, discussions between the parties continued. Ultimately, the parties reached an agreement in principle to settle the case.

Who is included in the Settlement Class?

The Settlement Class consists of the following:

All participants in the Plan at any time during the Settlement Class Period [i.e., from June 8, 2011 through March 31, 2022], including any Beneficiary of a deceased person who participated in the Plan at any time  during the Settlement Class Period , and any Alternate Payee of a person subject to a Qualified Domestic Relations Order that was in effect before the end of the Settlement Class Period and who participated in the Plan at any time during the Settlement Class Period.

If you fit within the above definition, then you are a member of the Settlement Class.

Do you need to file a claim?

No. If the Court approves the Settlement, and you are a member of the Settlement Class who is entitled to a payment under the Court-approved plan of allocation, then you do not need to do anything to participate in the Settlement.