Stock drop litigation has increased dramatically in the past decade. Winston & Strawn helps employers, fiduciaries, executives, boards of directors, benefit plans, and plan administrators in all aspects of ERISA litigation, including issues relating to:
- pension plan modification and termination
- benefit claims
- employment law and benefits plan claims
- fiduciary issues, mutual fund fees, and insurance company commissions
- change in control
- corporate investigations and executive matters
- executive malfeasance and forfeiture
The increase in ERISA class actions in recent years has resulted in new legal challenges for employers, retirement plan fiduciaries, as well as officers and directors. The groundwork for our successes in court often is laid years in advance by our proactive design, drafting, and process strategies. Winston & Strawn’s ERISA litigation attorneys have pioneered certain defensive strategies and training programs to help protect plan fiduciaries before litigation is filed.
Representative Matters
National Foreign Trade Council, et al. v. Giannoulias
National Foreign Trade Council Inc.
Winston & Strawn represented the National Foreign Trade Council, eight municipal fire and police pension funds, and eight individual beneficiaries of public pension funds in a lawsuit challenging the constitutionality of the 2005 Illinois Act to End Atrocities and Terrorism in the Sudan (the Illinois Sudan Act). The Act prohibited the deposit of Illinois state funds in any financial institution failing to certify that neither it nor any of its borrowers did business related to the country of Sudan. It also prohibited public pension funds from investing in any company that has direct or indirect commercial connections to that country. Winston attorneys argued that the Illinois Sudan Act intruded on the federal government’s exclusive power over foreign affairs, violated the clause of the Constitution that vests in Congress the power to legislate regarding foreign commerce, and is preempted by the federal government’s own trade sanctions against Sudan and by the National Bank Act. On February 23, 2007, a Northern District of Illinois judge ruled that the Illinois Sudan Act is unconstitutional and permanently enjoined its enforcement. The defendants have appealed the decision, but briefing on the appeal has been stayed pending passage of a new, narrower bill.
Peggy Hawkins-Dean v. Metropolitan Life Insurance Co., et al.
Metropolitan Life Insurance Company
Our attorneys were successful on behalf of MetLife in having the United States Supreme Court vacate and remand a decision of the Ninth Circuit Court of Appeals in an ERISA disability benefits case. Our attorneys represented MetLife, administrator of Robert Half International’s long-term health and disability plan, in case brought by a Robert Half employee. The Ninth Circuit held that MetLife should have included the amount the employee earned from stock options in her disability benefits.
RLJCS Enterprises, Inc. et al. v. Professional Benefit Trust, Inc. et al.
Professional Benefit Trust, Inc.
Winston & Strawn secured a summary judgment decision, which was affirmed by the U.S. Court of Appeals for the Seventh Circuit, for the Professional Benefit Trust Multiple Employer Welfare Benefit Plan and Trust (the “Trust”) in a unique case involving a welfare benefit plan that was designed and operated to allow employers to pre-fund certain benefits on a tax-deferred basis pursuant to IRC § 419A(f)(6). The plaintiffs, who contracted with our client for death benefits, alleged 16 counts including violations of civil RICO, ERISA, breach of contract and fiduciary duty, fraud, conversion, civil conspiracy, and other state law claims. As a means of reinsuring itself for payment of the death benefits, the Trust purchased life insurance from various mutual insurance companies, which subsequently demutualized. As a result of the demutualization, every policy owner was distributed an amount of stock equivalent to the ownership interest under the policy. In the Trust’s case the stock was worth approximately $5 million, an amount that the plaintiffs alleged belonged to them. The court agreed with our argument that the plaintiffs did not own the stock because they did not own the insurance policies and could not own the policies under the relevant plan documents and the requirements of IRC § 419A(f)(6). The court, on cross-motions, granted partial summary judgment for our client on the matter of ownership of the stock. The plaintiffs then dismissed with prejudice all other claims in the case in order to pursue an appeal of the ownership issue, which was unsuccessful.
Paulsen v. CNF, Inc. et al.
Pension Benefit Guaranty Corporation (PB
Winston & Strawn attorneys represented the Pension Benefit Guaranty Corporation (PBGC) in a class action alleging breach of fiduciary duty under ERISA. PBGC won summary judgment on the pleadings that a plaintiff could not bring such an action under Title I of ERISA against PBGC.
People of the State of New York by Eliot Spitzer, the Attorney General of the State of New York v. Richard A. Grasso, et al.
New York Stock Exchange
Winston & Strawn is representing the New York Stock Exchange and its former interim Chairman and Chief Executive Officer, John Reed, in litigation brought by the New York Attorney General relating to the compensation of former NYSE Chairman and CEO Richard Grasso. The Attorney General sued Grasso for the return of more than $100 million in compensation awarded while at the NYSE and that the Attorney General claimed violated New York’s Not-For-Profit Corporation Law because his level of executive pay from the non-profit was unreasonable. The Attorney General’s lawsuit was filed after an internal investigation conducted by Winston & Strawn during 2003, now known as the “Webb Report,” had determined that Grasso received approximately $150 million in excessive compensation. Upon being sued by the Attorney General, Grasso asserted cross-claims against the NYSE and Reed in which he sought approximately $95 million in additional compensation. Grasso’s cross-claims also sought additional unspecified damages against the NYSE and Reed based on claims that the NYSE and Reed allegedly defamed him and that the NYSE allegedly breached the non-disparagement clauses of his employment contracts. In November 2006, the court granted the NYSE’s motions for summary judgment on Grasso’s cross-claims in their entirety and dismissed all five of the causes of action that Grasso had asserted against the NYSE and Reed. Separately, the court had also issued rulings granting partial summary judgment in favor of the Attorney General and requiring Grasso to repay substantial amounts of compensation that he was awarded at the NYSE, as well as interest on that compensation.
Nauman v. Abbott Laboratories
Abbott Laboratories
We currently represent Abbott in connection with a class action Section 510 claim arising out of Abbott’s spin-off of its Hospital Products Division. The putative class of approximately 10,000 employees allege that the spin-off was intended to interfere with their accrual of additional pension and retiree health benefits, as well as a breach of fiduciary duty.
USAirways Pension Litigation
AON Corporation
We represented the named fiduciary of the USAirways retirement plans against allegations that the plan’s investments in Company stock violated fiduciary duties under ERISA.
Morrison v. Marsh & McLennan Companies, Inc.
Marsh & McLennan Companies, Inc.
The plaintiff's claim for allegedly owing benefits under the client's life insurance plan was denied as untimely. The plaintiff relied on alleged discrepancies in the plan document and SPD to argue a different limitations period should apply.
Cokenour v. Household International, Inc., et al.
Household Interntional - Board of Direct
The firm represented Household International in a national class action brought in the Northern District of Illinois against our client alleging violations of ERISA related to the investment of plan assets in Company stock.
Hammond v. Wise Alloys
Wise Metals Group LLC
The firm won a motion to dismiss an ERISA class action suit brought against client Wise Alloys.
Black & Decker v. Nord
Black & Decker
The firm secured a 9-0 victory from the United States Supreme Court on behalf of Black & Decker in an ERISA matter.
Clingerman v. Smurfit Stone Container Corp.
Smurfit Stone Container Corporation
Winston & Strawn represented Smurfit-Stone Container in a commercial arbitration in July 2002 involving claims for high-level executive severance and bonus pay following a merger "change in control."
Perrin J. Pinta v. Pharmacia Corporation
Pfizer Inc.
Our attorneys represented a Pharmacia in an administrative hearing before the Department of Labor involving claims for severance pay, pro rata bonus amounts and vacation pay.
Friz v. Marsh & McLennan Companies Inc.
Marsh & McLennan Companies, Inc.
We represented Marsh & McLennan in an ERISA class action suit in which the plaintiffs sought millions of dollars in damages in connection with the administration of a severance pay plan.
Blackwell v. Deluxe Corp.
Deluxe Corporation
We represented Deluxe in an ERISA class action in which the plaintiffs sought millions of dollars in damages in connection with the company’s failure to pay severance benefits after the sale of a business unit.
Jackson and Serment v. Brach’s Confections
Brach's Confections, Inc.
We defended Brach in a case filed in the Northern District of Illinois in which the plaintiffs claimed they were entitled to substantive benefits due to Brach’ s alleged procedural violations of ERISA.
Gilbert, et al. v. Ameritech Corporation, et al.
AT&T
A group of 39 former employees terminated during a reduction-in-force filed an ADEA and ERISA suit against Ameritech and related entities, including class action allegations for violations of ERISA Section 510.
Armstrong, et al. v. Jefferson Smurfit Corporation
Smurfit Stone Container Corporation
This action was filed in Massachusetts District Court by two retirees who claimed that Jefferson Smurfit breached its fiduciary duties under ERISA by failing to advise them of the tax consequences of accepting lump-sum payments in exchange for discontinuing their health insurance benefits.
Gardner v. Container Corporation of America, et al.
Container Corporation of America
We defended Container Corporation of America (CCA) against a plaintiff’s claims of breach of fiduciary duty under ERISA after our client’s benefit plan administrator declined to provide the plaintiff with health insurance coverage.
UPIU v. Jefferson Smurfit Corporation
Smurfit Stone Container Corporation
We represented Jefferson Smurfit Corp. (JSC) in a class action filed by various unions and more than 3,500 retirees under ERISA and Section 301 of the Labor Management Relations Act challenging changes to JSC’s retiree medical benefits plan and the portion of the cost charged to retirees.
Goggans v. Container Corporation of America
Container Corporation of America
We represented Container Corporation of America (CCA) in a class action filed by former employees of three plants that had been sold.
Alday v. Jefferson Smurfit Corporation
Smurfit Stone Container Corporation
Winston & Strawn represented JSC in a nationwide class action lawsuit filed on behalf of thousands of salaried retirees who claimed that the company's changes to and increases in the cost charged for retiree medical benefits violated, inter alia, ERISA.
Monroe-Higman v. United Air Lines, Inc.
United Airlines, Inc & UAL Cor
The threshold issue in this case was whether United’s mandatory age-60 policy for all flight-deck crew members was legal under ADEA.
UIFO v. United Air Lines, Inc., et al. - I
United Airlines, Inc & UAL Cor
A group of dissident pilots filed this $140 million ADEA and ERISA suit against United and the Air Line Pilots Association (ALPA) alleging that United’s pilot-defined benefit pension plan was age discriminatory, violated ERISA benefit accrual and fiduciary standards, and failed to refund employee contributions and to give full credit under the plan for all years of service of its older pilots.
UIFO v. United Air Lines, Inc., et al. - II
United Airlines, Inc & UAL Cor
This unrelated suit filed by the same dissident group against United and ALPA alleged a multimillion-dollar breach of the duty of fair representation and breach of fiduciary duty under ERISA in connection with United’s pilot-defined contribution pension plan.
Addison v. United Air Lines, Inc.
United Airlines, Inc & UAL Cor
In this case, dissident pilots and others sued to prevent United from conducting a spinoff/termination of the pilots’ defined benefit pension plan to recover over $500 million in excess assets.
