On May 25, 2018, a judge dismissed with prejudice a proposed class action that accused Northwestern University of mismanaging workers’ retirement savings, a result that may have saved the university hundreds of millions of dollars in potential damages.
On June 1, 2018, The American Lawyer named Litigation Department Chair Craig C. Martin and Partner Amanda S. Amert “Litigators of the Week” for their role leading the team that represented Northwestern. “Martin and Amert successfully countered that the allegations were both unfounded and misplaced, and that the plans actually performed well,” the article says.
Mr. Martin is quoted saying, “We found that Northwestern’s programs are managed very well according to federal law, as opposed to the negative way they were portrayed in the complaint.” Ms. Amert added: “The judge noted that people have ample opportunities to choose what options they want and that the lineup Northwestern gave them was perfectly appropriate.”
“We are very happy with the outcome and believe that the opinion is thorough, well-reasoned, and consistent with Seventh Circuit case law,” said Northwestern’s General Counsel Phil Harris. “I said after this lawsuit was filed that we would defend the case aggressively because we strongly believe that our retirement plan investment committee acted prudently at all times and in all respects,” Mr. Harris said, adding that “Craig, Amanda, and their team have been fabulous. They are exceptional attorneys who understand higher education.”
Also on June 1, Law360 named the Northwestern victory a “Legal Lion” in its weekly “Lions and Lambs” column. “The case was the second to be thrown out in a recent wave of Employee Retirement Income Security Act lawsuits against prestigious universities,” Law360 observed.
All of the plaintiffs participate in the Northwestern University Retirement Plan; three of them participate in the Northwestern University Voluntary Savings Plan. The plaintiffs asserted six counts for breach of fiduciary duty and one count for failure to monitor fiduciaries.
According to the opinion by US District Judge Jorge L. Alonso, the plaintiffs alleged that they had too many options, leaving them with the “virtually impossible burden” of deciding where to invest their money. Regarding the plaintiffs’ complaint that the range of investment options was too broad and that the fees charged by some funds were too high, Judge Alonso wrote: “Once again, the Court cannot conclude that these allegations add up to a breach of fiduciary duty. Plaintiffs spend much of their lengthy amended complaint describing their clear preference for low-cost index funds, and the Court does not dispute that their preference is becoming conventional wisdom. Plaintiffs might have a different case if they alleged that the fiduciaries failed to make such funds available to them. Plaintiffs, though, allege that those types of low-cost index funds were and are available to them.”
In addition to Mr. Martin and Ms. Amert, others on the team included Partners Matthew R. Devine, Casey T. Grabenstein and Brienne M. Letourneau; Associates LaRue L. Robinson, Alexis E. Bates, Amit B. Patel, Patrick E. Cordova and Monika N. Kothari; Paralegals Tyler Stilley, Kevin Garcia and Nebojsa Rebic; and Project Assistant Jerome Molasky.