Presenting a live 90-minute webinar with interactive Q&A ERISA Breach of Fiduciary Duty Class Actions: Avoiding and Defending Claims Against Companies and Fiduciaries Leveraging Standing, Statute of Limitations, Exhaustion and Mandatory Arbitration to Defeat Claims; Proactive Methods to Prevent Claims TUESDAY, JULY 25, 2017 1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific Today’s faculty features: James O. Fleckner , Partner, Goodwin Procter , Boston Brian D. Netter, Partner, Mayer Brown , Washington, D.C. The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions emailed to registrants for additional information. If you have any questions, please contact Customer Service at 1-800-926-7926 ext. 10 .
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ERISA Breach of Fiduciary Duty Class Actions: Avoiding and Defending Claims Against Companies and Fiduciaries Brian D. Netter James O. Fleckner Mayer Brown LLP Goodwin Procter LLP 1999 K Street NW 100 Northern Ave. Washington, DC 20006 Boston, MA 02210 P: 202.263.3339 P: 617.570.1153 jfleckner@goodwinlaw.com bnetter@mayerbrown.com
Brian Netter Partner, Mayer Brown LLP Brian D. Netter is a partner in Mayer Brown's Washington, D.C., office and Co-Chair of the ERISA Litigation practice and the Supreme Court and Appellate Litigation practice. Brian’s innovative work has been recognized in The National Law Journal’s “Appellate Hot List” on four separate occasions, and he has been recognized by The Brian D. Netter National Law Journal and by Washington DC Super Lawyers as an emerging star in Partner appellate litigation. On ERISA questions, Brian litigates class-action disputes and t:202.263.3339 advises clients on issues prompting such litigation, particularly as relates to ERISA's bnetter@mayerbrown.com fiduciary standards. He is a frequent commentator on the Supreme Court’s ERISA docket. Brian has also been honored as the firm’s partner of the year for pro bono matters. In recent pro bono representations, he won a landmark victory for the District of Columbia, establishing that the District (rather than Congress) has the right to spend locally raised revenues. And he convinced a federal appellate court to vacate the sentence of a federal inmate facing a death sentence based on constitutional violations during the trial. Earlier in his career, Brian served as a law clerk to Associate Justice Stephen Breyer on the US Supreme Court and to Judge Judith W. Rogers on the US Court of Appeals for the DC Circuit. Prior to his career as a lawyer, Brian earned undergraduate and graduate degrees in Industrial & Operations Engineering. 6
James O. Fleckner Partner, Goodwin Procter LLP Jamie Fleckner is a partner in Goodwin’s Financial Industry Practice and Chair of its ERISA Litigation Practice. Mr. Fleckner represents clients in a wide array of complex commercial litigation, with a focus on financial services and products, including investment management. He regularly litigates class and derivative actions under ERISA, the Investment Company Act of 1940, the Securities Exchange Act of 1934, and related federal and state laws. His practice also focuses on regulatory investigations and governmental proceedings, and has represented clients before the U.S. Department of Labor, Securities and Exchange Commission, James L. Fleckner Partner Department of Justice, Pension Benefit Guaranty Corporation and state authorities. t: 617.570.1153 Mr. Fleckner represents companies and individual officers in class and derivative actions, jfleckner@goodwinlaw.com regulatory investigations and bankruptcy proceedings regarding the discharge of Investment Company Act, ERISA and other fiduciary duties. Currently, he is representing numerous clients in so- called “excessive fee” ERISA and Investment Company Act litigation, and other litigation challenging the discharge of fiduciary obligations. Since 2014, Mr. Fleckner has been listed in the nationwide ERISA Litigation category in Chambers USA: America’s Leading Lawyers for Business, where clients praise his "knowledge of the ERISA area and ability to distill concepts into practical strategic advice." Since 2015 he has been recognized as a leading lawyer in the list of Who’s Who Legal: Pensions and Benefits . Since 2013 he has been recognized as a national leader in ERISA litigation by The Legal 500 United States. Mr. Fleckner is a nationally recognized lecturer and author on ERISA, Investment Company Act, and related litigation topics. He has presented at over 90 conferences across the United States to legal and non-legal audiences. 7
Today’s Agenda I. Current trends in ERISA breach of fiduciary duty class actions A. Cases challenging mutual funds and other investment options B. Proprietary fund cases C. Stock-drop cases D. ESOP cases E. 403(b) university cases 8
Today’s Agenda II. Strategies for defeating certification A. Standing B. Statute of limitations C. Exhaustion of administrative remedies D. Mandatory arbitration E. Other effective strategies III. Best practices to avoid and reduce ERISA breach of fiduciary duty class actions 9
Current trends in ERISA breach of fiduciary duty class actions Title of Presentation | FileSite Number July 24, 2017 10
I. Current Trends in ERISA Breach of Fiduciary Duty Class Actions • Trend #1 : Cases challenging mutual funds and other investment options • Three of the most recent and prevalent challenges to investment decisions are claims that ERISA fiduciaries : - (1) Failed to provide lower cost products; - (2) Charged excessive fees; and - (3) Applied inappropriate investment benchmarks. 11
I. Current Trends in ERISA Breach of Fiduciary Duty Class Actions • Claim: Failing to provide lower cost products. • Sulyma v. Intel Corp. Inv. Policy Comm. , No. 15-CV-04977 (N.D. Cal. 2017) - Accused Intel of losing > $100,000,000 in its workers’ retirement savings by exposing them to alternative investments in hedge funds, commodities and private equity. - Motion to dismiss granted because claims were time-barred. • Cryer et al. v. Franklin Resources Inc., et al. , No. 4:16-cv-04265 (N.D. Cal. 2017) - Alleged Defendant used low-performing high cost funds, failed to offer stable value fund, and committed self-dealing by offering certain proprietary funds. - Motion to dismiss denied because investing in own products that had higher fees, performed poorly, and allowed Defendant to collect excessive fees stated a claim. 12
I. Current Trends in ERISA Breach of Fiduciary Duty Class Actions • Claim: Charging excessive fees. • Troudt v. Oracle Corp., No. 1:16-cv-00175 (D. Colo. 2017) - Plaintiffs claim that Oracle breached its fiduciary duties by failing to engage in a prudent process for selecting and retaining investment options, which consistently unperformed, and paying excessive fees for recordkeeping and administrative services. - Motion to dismiss denied because judge thought Rule 12(b)(6) was an inappropriate place to resolve the allegations. • White v. Chevron, No. 16-cv-0793 (N.D. Cal. 2016) - Plaintiffs claim Chevron breached its fiduciary duties by 1) providing “retail” instead of “institutional” investment options and 2) offering a money market fund as a capital preservation option. - Motion to dismiss granted as court found: - 1. “Fiduciaries have latitude to value investment features other than price.” Therefore, must allege more than fiduciaries could have used institutional investment options. - 2. Money market fund prudent as “one of an array of mainstream investment options.” 13
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