News
Judge grants preliminary approval of settlement in T. Rowe Price 401(k) Plan Litigation
Chief U.S. District Court Judge James K. Bredar granted Plaintiffs’ Motion for Preliminary Approval of Class Action Settlement on January 18, 2022. The Settlement in Feinberg v. T. Rowe Price Group Inc. et al, Case No. 1:17-cv-00427 (U.S. District Court, District of Maryland) will provide the following relief to the Class: (i) Defendants’ payment of seven million dollars ($7,000,000), the net amount of which is to be distributed to the Class, and (ii) the addition of a Brokerage Window feature to the Plan that will allow participants, for the first time, to invest in a wide range of non-T. Rowe Price investment funds. The Court has also found that the initiation of the Action served as the catalyst for Defendants’ payment of $6.6 million (the “Special Payment”) to many Class members in January 2019.
A Notice of Proposed Settlement of Class Action Lawsuit and Settlement Fairness Hearing has been sent to Class Members on March 25, 2022 (“Settlement Notice”). This Settlement Notice describes the Settlement terms and the rights of Class Members. The Class is defined in the Settlement Notice as follows:
All participants and beneficiaries in the T. Rowe Price U.S. Retirement Program (“Plan”) who had a balance in their Plan account at any time from February 14, 2011 through January 18, 2022 (the “Class Period”). (Excluded from the class are individual Defendants, members of the T. Rowe Price Board of Directors, the Management Committee, the Management Compensation Committee, and their beneficiaries and immediate families.)
A hearing on the final approval of the Settlement and for approval of Plaintiffs’ petition for Attorneys’ Fees and Expenses and for the Class Representatives’ Service Awards (“Fairness Hearing”) will take place on June 10, 2022, at 11:00 AM EDT before Chief U.S. District Court Judge James K. Bredar at the U.S. District Court for the District of Maryland, Courtroom 5A, 101 Lombard St., Baltimore, MD 21201. If finally approved, the Settlement will legally bind all members of the Class. More information about the hearing and how to appear or speak at the hearing, or object to the Settlement, is provided in the Class Notice.
See below for a summary of the litigation.
Summary of the Lawsuit
A federal class action lawsuit concerning T. Rowe Price’s 401(k) Plan, known as the T. Rowe Price U.S. Retirement Program (the “401(k) Plan”), was filed February 14, 2017. It is brought on behalf of current and former T. Rowe Price employees who have, or had, a balance in their 401(k) Plan accounts (their retirement savings) since February 14, 2011. I. The lawsuit alleges that Plan fiduciaries violated their duties under the Employee Retirement Income Security Act (“ERISA”) and caused the participants in the 401(k) Plan to pay millions of dollars in illicit fees by offering in the 401(k) Plan only T. Rowe Price’s own in-house investment funds, failing to offer the lowest cost versions of those funds, and failing to consider any funds from other companies that offered lower fees or better performance.
The lawsuit alleges that T. Rowe Price earned excess profits at the expense of its employees, who paid millions of dollars of their retirement savings in the form of excess fees, and have lost tens of millions of dollars due to investment underperformance.
The case name is Feinberg v. T. Rowe Price Group Inc. et al, Case No. 1:17-cv-00427, U.S. District Court, District of Maryland.
Summary of the Claims
The lawsuit specifically alleges that T. Rowe Price and its affiliates violated ERISA, the federal law governing employee benefit plans, by, among other things:
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Imprudent and disloyal selection and monitoring of 401(k) Plan investments by giving preferential treatment to the in-house funds resulting in millions of dollars in fee income for the company at the expense of the retirement savings of 401(k) Plan participants;
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Failing to offer the lowest cost version of certain in-house funds to 401(k) Plan participants (who are/were T. Rowe Price employees);
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Failing to remove and prudently monitor the performance of 401(k) Plan Trustees, who were breaching their duties of loyalty and prudence by exclusively offering in-house funds in the 401(k) Plan, and failing to consider lower cost and better performing non-proprietary alternatives;
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and
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Engaging in transactions prohibited by ERISA by causing the 401(k) Plan to participate in transactions that the company and its affiliates knew or should have known constituted sales or exchanges of property between the 401(k) Plan and parties in interest, furnishing of services between the Plan and a party in interest, transfer of Plan assets to a party in interest, and transactions between a Plan and its fiduciaries.
Class Action
On May 17, 2019, the Court certified a class of T. Rowe Price Plan Participants that includes all participants in the T. Rowe Price U.S. Retirement Program who had a balance in their plan account at any time from February 14, 2011 through the date of judgment [now defined as January 18, 2022]. Any individual Defendants, any members of the T. Rowe Price Board of Directors, the Management Committee, the Management Compensation Committee, and their beneficiaries and immediate families are excluded from the class.
Status of the Litigation
McTigue Law LLP filed the first Complaint in the United States District Court for the District of Maryland (Baltimore) on February 14, 2017, on behalf of David G. Feinberg. Defendants filed a motion to dismiss, contending, among other things, that Plaintiff lacked standing with respect to some of his claims.
On July 21, 2017, McTigue Law LLP and the law firm of Cohen Milstein filed an Amended Complaint adding ten additional named Plaintiffs. Defendants moved to dismiss again but dropped their standing objections. One of Defendants' principal arguments for dismissal was that their actions as fiduciaries with respect to offering T. Rowe Price's own funds in the Plan were mandated by the governing Plan document. After the Defendants' second motion to dismiss was fully briefed, oral argument was held before the Hon. Judge Garbis. Judge Garbis subsequently retired; Chief U.S. District Judge James K. Bredar was assigned to the case. Judge Bredar listened to the recording of the oral argument and denied Defendants' motion to dismiss on August 20, 2018.
On May 17, 2019, Plaintiffs filed a Second Amended Complaint which modified the list of Defendants named in the case. Defendants answered the Second Amended Complaint on May 31, 2019, and the Parties continued to engage in discovery.
On February 10, 2021, the Court denied in large part the Parties' motions for summary judgment. Plaintiffs subsequently filed a motion for reconsideration and a motion for certification for interlocutory appeal to the United States Court of Appeals for the Fourth Circuit. The District Court denied both motions on March 23, 2021.
A trial date of September 13, 2021 was set by the Court. The trial was subsequently postponed in light of the Parties' agreement on a settlement in principle on July 23, 2021. A full settlement agreement was finalized on December 16, 2021.
For additional information:
Further information regarding the lawsuit and the Settlement is available on the Settlement Website, www.TRP401kSettlement.com.
You also may contact the Settlement Administrator or Class Counsel listed below.
Settlement Administrator
In re T. Rowe Price 401(k) Plan Litigation c/o Rust Consulting, Inc. - 7546
PO Box 2396
Faribault, MN 55021-9096
Toll- free 1-(877) 456-1184
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COHEN MILSTEIN SELLERS & TOLL PLLC
Mary Bortscheller |
MCTIGUE LAW LLP |
JUDGE GRANTS FINAL APPROVAL OF SETTLEMENT IN BANK OF NEW YORK MELLON FOREIGN EXCHANGE LITIGATION
U.S. District Judge Lewis D. Kaplan has granted final approval of settlement in the Bank of New York Mellon Foreign Exchange Transactions Litigation, 12-md-2335, Southern District of New York.
In a September 24, 2015, order, Judge Kaplan approved a class action settlement resolving allegations that the Bank of New York Mellon (BNYM) violated its fiduciary and statutory duties to thousands of clients, including hundreds of ERISA pension and 401(k) plans, which used BNYM’s “standing instruction” foreign exchange transactions service.
Judge Kaplan called the Bank of New York Mellon’s actions “an outrageous wrong” and praised the work of plaintiffs’ counsel, including McTigue Law LLP, which was lead counsel for the ERISA class and co-Lead Settlement Class Counsel.
“This really was an extraordinary case in which plaintiff's counsel performed, at no small risk, an extraordinary service,” Judge Kaplan said in remarks from the Bench during the final approval hearing. “They did a wonderful job in this case, and I've seen a lot of wonderful lawyers over the years. This was a great performance.”
For more information regarding the settlement, please visit the settlement website http://www.bnymellonforexsettlement.com/
Wells Fargo Mutual Fund Fee Litigation
US District Court Judge Paul A. Magnuson has preliminarily approved settlement of an ERISA class action now pending in the US District Court for the District of Minnesota. In the case, Figas v. Wells Fargo, et al, 08-04546, Plaintiff Robin Figas has alleged that Wells Fargo violated its fiduciary duties under Federal pension law by directing the assets of participants in the Wells Fargo & Company 401(k) Plan (the “Plan”) into high-fee, low-performance mutual funds managed by affiliates of Wells Fargo.
McTigue Law, along with co-counsel Bailey & Glasser LLP, has been named Lead Counsel for a class of Plaintiffs that includes all Participants in the Wells Fargo & Company 401(k) Plan whose Plan accounts had a balance in certain Wells Fargo mutual funds from November 2, 2001, to October 8, 2009. If you are a current or former participant in the Plan and would like additional information, please visit www.wf401ksettlement.com, or call 1-877-340-6603.
federal mogul corporation
$12.75 Million Settlement Reached in federal mogul ERISA Litigation
July 13, 2007 — United States District Court Judge Avern Cohn today granted final court approval to a $12.75 million settlement in Sherrill v. Federal Mogul Corp. Retirement Programs Committee, et al. The settlement will be used to offset financial losses suffered by participants in and beneficiaries of the Federal Mogul Corporation Salaried Employees Investment Plan. McTigue Law LLP served as co-lead counsel for the plaintiffs in the suit.
The Complaint in the the Federal Mogul ERISA litigation was filed in 2003 in the U.S. District Court for the Southern District of Illinois. The case was subsequently transferred to the U.S. District Court for the Eastern District of Michigan. In the Complaint Plaintiffs alleged that participants in the Federal Mogul Corporation Salaried Employees Investment Plan suffered significant financial losses as a consequence of mismanagement of the Plan by Federal Mogul during the period preceding the auto parts manufacturer's Bankruptcy. Federal Mogul filed for Chapter 11 bankruptcy protection in October 2001.
CMS Energy corporation
$28 Million Settlement Reached in CMS Energy Corporation ERISA Litigation
May 1, 2006 — United States District Court Judge George Caram Steeh has granted preliminary court approval of a $28 million settlement in the CMS ERISA Litigation. The settlement will be used to offset financial losses suffered by plaintiffs in the suit. McTigue Law LLP served as co-lead counsel for the plaintiffs.
Notice of the settlement was mailed to plaintiffs on May 1, 2006, and a final Fairness Hearing will be held on June 15, 2006. At that time, Judge Steeh will determine whether to grant final approval of the settlement.
The Complaint In re CMS Energy ERISA Litigation was filed in the U.S. District Court for the Eastern District of Michigan in July of 2002 on behalf of a “Class” of Plaintiffs comprised of participants and beneficiaries of the Employees’ Savings Plan of Consumers Energy Company. The Complaint alleges that Savings Plan participants suffered significant financial losses as a consequence of mismanagement of the Plan by CMS and a failure by its designated fiduciaries to fulfill their duties under federal pension law, including:
- failing to prudently and loyally manage the Plan’s assets;
- failing to provide participants with complete and accurate information regarding CMS stock sufficient to advise participants of the true risks of investing their retirement savings; and,
- failing to properly monitor the performance of their fiduciary appointees, and remove and replace those whose performance was inadequate.