January 26, 2023
Cohen Milstein Sellers & Toll PLLC finalized several multimillion-dollar settlements in federal benefits lawsuits last year and defeated an Illinois casino’s bid to escape a suit from workers alleging mismanagement of their employee stock ownership plan, earning the firm a repeat selection as one of Law360’s 2022 Benefits Groups of the Year.
A federal judge’s Jan. 28 denial of a motion to dismiss in the ESOP suit from Casino Queen employees and plan participants is one of what Cohen Milstein’s Employee Benefits and ERISA practice group leader Michelle Yau described as a streak of dispositive motion wins in 2022 for the firm in Employee Retirement Income Security Act lawsuits.
Victory on the dismissal denial was especially sweet for the firm, because months earlier, the employer’s bid to exit the case by forcing arbitration was also decisively scuttled, thanks to precedent in the Seventh Circuit that Cohen Milstein helped set in another case, Smith v. Board of Directors of Triad Manufacturing .
In that case, a three-judge panel of the Seventh Circuit in September 2021 affirmed a lower court’s ruling that a St. Louis manufacturing company couldn’t force arbitration of a federal benefits lawsuit, because doing so would prevent ESOP participants from being able to seek relief and obtain remedies under ERISA.
Shortly after the Smith decision, Casino Queen defendants in October 2021 moved to voluntarily dismiss their appeal of an arbitration denial from earlier in the year.
“We’re very thoughtful about the cases we bring. And we’re just ecstatic about the success we’ve had, for example, on the arbitration issue,” Yau said on Monday.
Yau said the Casino Queen victory added to a winning streak on dispositive motions for the firm that by her count is 8-0 for the 2022 season, where the firm has defeated largely or entirely defendant motions to dismiss, to compel arbitration, or for summary judgment. Other notable victories in that list include defeating a motion for judgment on the pleadings or for summary judgment in an ESOP case in California in December 2021 and in March 2022 overcoming a radiology company’s ERISA arbitration bid in Colorado federal court.
“Outside of the ERISA context, arbitration class waivers have certainly had little success,” Yau said. “It’s just really exciting that ERISA is such a protective statute that it provides participants — and really retirement plans — protection even without Rule 23, essentially.”
Yau’s reference to the class certification rule touches on a live debate before the Tenth Circuit in the Colorado case, Harrison v. Envision Management Holding Co. et al., regarding the extent of ERISA’s protections for representative action. The case was originally brought by Cohen Milstein in January 2021.
“Envision has now gotten out in front. … it’s probably going to be the next appellate decision on the issue,” Yau said.
Cohen Milstein’s ERISA and employee benefits practice group is eight attorneys strong, and the firm has plans to grow. Kai Richter recently joined as a partner in March 2021, and plans to work out of the firm’s brand-new Minnesota office.
Richter said in an interview about the firm’s award that while he could not take credit for any of the 2022 accomplishments, having joined so recently, the designation was “obviously very gratifying.”
Richter said, “I’m hopeful we’re going to get a favorable result” in the Envision case, noting that he was “very involved in the mocks” prior to arguments on Jan. 17.
A long-sought victory in the settlement realm for the firm came July 15, when U.S. District Judge Jon S. Tigar of the Northern District of California granted final approval to a $100 million settlement between workers and the Dignity Health hospital system. The approval capped proceedings on a case that began in 2013, when workers claimed that their pension plan was underfunded by $1.8 billion due to the erroneous use of ERISA’s exemption intended for churches and their affiliates.
A final settlement came after the case was consolidated with several others and went all the way to the U.S. Supreme Court, resulting in the 2017 decision Advocate Health Care Network v. Stapleton , which settled a long-running fight over whether religiously affiliated hospitals and plans could make use of ERISA’s church plan exemption, even if the retirement plans weren’t originally established by churches.
Settlement proceedings in the case took years, with a California federal judge twice rejecting a motion for preliminary settlement approval before finally giving his blessing to the deal in October 2021.
“We litigated the case hard and we got a very good outcome for the participants,” Yau said, noting that “it took a little while to get approved.”
A particularly notable settlement for Yau came when the firm on Aug. 10 clinched final approval of a $32.5 million deal between Wells Fargo and its workers in a lawsuit alleging mismanagement of an employee 401(k) plan. A deal to end the case came after plaintiffs fought and lost the bank’s bid to switch venues from California to Minnesota district court. That was a potential setback, as case law in the Eighth Circuit, which includes Minnesota, is much less friendly to employees in ERISA cases challenging fund offerings, Yau said.
Yau characterized the outcome of the settlement in the Wells Fargo case as “what Cohen Milstein is about.”
Despite a less favorable circuit for a fund challenge from plaintiffs, “we ultimately prevailed both on the motion to dismiss, and we got a very, very good recovery for the class,” Yau said.
Read the complete profile on Law360.