Citgo will increase the value of pensioners’ retirements by $10 million to settle a class action alleging it shorted early retirement payouts by basing the allowances on outdated mortality tables that used data from the 1970s, according to filings in Illinois federal court.
Citgo Petroleum Corp. retirees entered a motion for preliminary approval Wednesday in the Employee Retirement Income Security Act suit. Pensioners filed the settlement agreement, preliminary approval motion, supporting memorandum and other documents after first reporting a deal to resolve the case in September.
Citgo has agreed to increase the value of retirees’ annuities by $10 million, calculated as additional present value added to their benefits under terms spelled out in the settlement agreement. The agreement also sets the maximum amount of attorney fees, expenses and class representative service awards at $4.75 million.
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The retirees are represented by Kai Richter, Michelle C. Yau, Daniel J. Sutter, Ryan Wheeler, Carol V. Gilden and Eleanor Frisch of Cohen Milstein Sellers & Toll PLLC, by Rachana A. Pathak, Peter K. Stris, Victor O’Connell and John Stokes of Stris & Maher LLP, by Todd Jackson and Nina Wasow of Feinberg Jackson Worthman & Wasow LLP and by Shaun P. Martin of the University of San Diego Law School.
A Michigan federal judge on Thursday gave the final approval to a $25 million settlement to end claims from a class of Flint adults and businesses accusing a firm of failing to properly alert officials about the dangers of the city’s water, noting that the case took years to resolve because it involved complicated legal issues.
U.S. District Judge Judith E. Levy said the settlement with the class of about 45,000 plaintiffs and water firm Veolia North America is adequate and was reached through fair negotiations after about eight years of litigation, taking a moment to say she wished members of the public were better able to track case developments, because then they might have more understanding as to why the process took as long as it did.
“I wish the public had a closer ability to follow [this case] because it seems that I read articles in the media about how ‘it’s now 10 years and some months passed from the beginning of what’s called the Flint water crisis and why isn’t this done,’ and it turns out that the arguments are complex. The science is difficult. The number of people who were involved in this elevates the complexity of the process,” Judge Levy said.
The settlement received no objections and just four of the members opted out, the judge said.
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Ted Leopold of Cohen Milstein Sellers & Toll, co-lead counsel for the class, told Law360 on Thursday that the decision was appropriate.
“We are very pleased with today’s proceedings and believe today is one more step towards closure of a very sad period in the life of the Flint community,” Leopold said.
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The class is represented by Cohen Milstein Sellers & Toll PLLC, Pitt McGehee Palmer Bonanni & Rivers PC, Weitz & Luxenberg PC, Susman Godfrey LLP, Motley Rice LLC, the Law Offices of Teresa A. Bingman PLLC, Bronstein Gewirtz & Grossman LLC, the Law Offices of Deborah A. LaBelle, the NAACP, Goodman Hurwitz & James PC, Trachelle C. Young & Associates PLLC, Dedendum Group LLC, McKeen & Associates PC, the Law Office of Cirilo Martinez PLLC, Shea Aiello PLLC, Cynthia M. Lindsey & Associates PLLC, McAlpine PC and the Abood Law Firm.
As part of the proposed settlement, former female trainees can reapply to become agents and two outside experts will review the training program to make sure the evaluation process is fair.
The Justice Department agreed to a $22.6 million settlement for 34 women who sued the F.B.I., accusing the bureau of unfairly dismissing them from its agent training program because of their gender, according to court documents.
As part of the proposed settlement, the women can reapply to become agents and two outside experts will review the training program to make sure the evaluation process is fair.
“It was a long time coming,” said Paula Bird, 36, who was one of the women who filed the complaint in 2019. “They finally acknowledged there were problems, and they will hopefully do something about.”
The settlement still has to be approved by Judge Jia M. Cobb of Federal District Court in the District of Columbia.
The women, former recruits, filed the lawsuit, saying the F.B.I. had discriminated against them because of their gender and accusing the bureau of employing a double standard.
All the women had passed their fitness, academic and firearms tests at the F.B.I.’s facility in Quantico, Va. But they failed the last phase known as tactical training, which involves entering a house and confronting an armed attacker. The tactical training takes place at Hogan’s Alley, the F.B.I.’s mock town where hired actors portray terrorists and criminals.
The women accused instructors of treating women differently and running a “good-old-boy network” at the training academy.
“When male trainees do the same, they are praised for having a ‘command presence,’” the lawsuit said.
The women were dismissed from new-agent training between April 2015 and August 2024.
The complaints eventually prompted a review by the Justice Department’s inspector general.
In a report released in December 2022, the inspector general found that female trainees received a “disproportionate number of performance citations and were dismissed at rates higher than expected based on their share of the population.”
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“The F.B.I. would have been a much better agency if they had all of these women among their agents,” said Christine E. Webber, one of the lawyers who worked on the case.
“They showed they had what it takes to pass every objective test,” Ms. Webber said. “It was the one subjective test that led to their dismissal.”
The U.S. Department of Justice has agreed to pay $22.6 million to settle a lawsuit by 34 women who claim they were wrongly dismissed from the FBI’s agent training academy because of their sex, according to a court filing on Monday.
The settlement, which must be approved by a federal judge in Washington, D.C., would resolve a 2019 class action claiming the FBI, which is part of the Justice Department, had a widespread practice of forcing out female trainees.
The plaintiffs say that they were found unsuitable to graduate from the training academy even though they performed as well as, or better than, many male trainees on academic, physical fitness, and firearms tests. Some of them also say they were subjected to sexual harassment and sexist jokes and comments.
Along with the payout, the proposed settlement would allow eligible class members to seek reinstatement to the agent training program and require the FBI to hire outside experts to ensure that its evaluation process for trainees is fair.
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Christine Webber, a lawyer for the plaintiffs, said the settlement reflects “a genuine desire by the FBI to turn the page on the past history of discrimination in new agent training.”
The lawsuit accused the FBI of violating Title VII of the Civil Rights Act of 1964, which bars workplace discrimination based on sex and other characteristics.
A Connecticut-based hedge fund that went bankrupt and owner George A. Weiss have agreed to pay $7.9 million to end an ex-worker’s suit alleging the company plowed its employees’ retirement savings into two substandard proprietary funds, according to filings Friday in Connecticut federal court.
The proposed class of participants in a 401(k) plan for employees of George Weiss Associates Inc. entered a motion for preliminary approval of the class action settlement in the Employee Retirement Income Security Act suit, disclosing the terms of the deal with GWA LLC and its owner, George A. Weiss.
The proposed class said in a memorandum in support of the motion for preliminary approval that the $7.9 million gross settlement amount to be paid by GWA LLC or its insurers to resolve the suit represented an “outstanding outcome for the class” that would result in an average gross recovery of about $40,000 per class member.
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The proposed class is represented by Michelle C. Yau, Daniel R. Sutter, Caroline E. Bressman and Jacob T. Schutz of Cohen Milstein Sellers & Toll PLLC.
The UFC and its fighters have reached a revised settlement that upsizes the payout to $375 million, resolving a portion of their long dispute over wages and leaving claims from a similar class action unresolved, the organization said Thursday.
UFC, a subsidiary of TKO Group Holdings Inc., said in a statement it was responding to concerns raised by Nevada U.S. District Judge Richard F. Boulware II, who rejected the initial $335 million agreement that would have ended claims from the mixed martial arts fighters in two class actions accusing UFC of suppressing their wages. A spokesman for UFC declined to discuss more details about the judge’s concerns referred to in the statement.
The court must approve the most recent settlement.
“While we believe the original settlement was fair — a sentiment that was also shared by plaintiffs — we feel it is in the best interest of all parties to bring this litigation to a close,” Thursday’s statement says.
The court had expressed concern that the prior settlement included both the Le et al. v. Zuffa LLC case, filed in 2014 by fighter Cung Le and nearing trial, and Johnson et al. v. Zuffa LLC et al., filed in 2021 by fighter Kajan Johnson, which has not progressed as far. Judge Boulware also questioned the amount being offered to resolve the two cases.
The revised settlement resolves the Le case, and the Johnson case remains open.
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The fighters are represented by Eric L. Cramer, Michael Dell’Angelo, Ellen T. Noteware, Patrick F. Madden, Najah A. Jacobs and Joshua P. Davis of Berger Montague, Richard A. Koffman, Benjamin D. Brown, Daniel H. Silverman and Daniel Gifford of Cohen Milstein Sellers & Toll PLLC, Joseph R. Saveri, Kevin E. Rayhill, Christopher K.L. Young and Itak Moradi of Joseph Saveri Law Firm LLP, Don Springmeyer of Kemp Jones LLP, Robert C. Maysey and Jerome K. Elwell of Warner Angle Hallam Jackson & Formanek PLC, and Crane Pomerantz of Clark Hill PLC.
The UFC reached a new settlement in one of its antitrust lawsuits Thursday and hopes a judge will green-light it.
TKO Group — the UFC’s parent company — reached an agreement with the plaintiffs of Le v. Zuffa that will pay $375 million in the class action lawsuit in which former fighters allege the MMA promotion violated antitrust laws.
This amount exceeds the proposed $335 million settlement that Judge Richard Franklin Boulware II of the U.S. District Court of Nevada rejected in July.
Following the filing to the Securities and Exchange Commission, the UFC released a statement about the settlement in the Cung Le case. However, a second antitrust lawsuit led by former UFC fighter Kajan Johnson was not mentioned in the disclosure.
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The antitrust lawsuit dates to 2014, when Zuffa was accused of violating antitrust laws by paying UFC fighters less than they were entitled to and hurting other MMA promoters with those practices. The lawsuit also alleges that the UFC has gained an unfair advantage in the mixed martial arts industry through years of anticompetitive tactics and engaged “in a scheme to acquire and maintain monopsony power in the market for elite professional MMA fighter services.”
College student data company National Student Clearinghouse has agreed to pay nearly $10 million to exit multidistrict litigation stemming from the 2023 hack of Progress Software’s MOVEit file transfer tool.
The deal, outlined in a Massachusetts federal court filing Friday, would resolve claims in a November 2023 class action filed in Virginia federal court that lax security practices by National Student Clearinghouse and Progress Software allowed the ransomware cybercriminals to steal the Social Security numbers and personal information of about 1.5 million people.
National Student Clearinghouse, based in Herndon, Virginia, operates as a service provider to higher education clients and receives data from the schools.
The settlement would create a $9.95 million fund that would pay class members for two years of credit monitoring, plus either accounted losses from the breach of up to $12,500 or a cash payment of $100, which could be increased or decreased depending on the number of claims made.
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Evangelista is represented by Kristen A. Johnson of Hagens Berman Sobol Shapiro LLP, E. Michelle Drake of Berger Montague PC, Gary F. Lynch of Lynch Carpenter LLP, Douglas J. McNamara of Cohen Milstein Sellers & Toll PLLC, Karen H. Riebel of Lockridge Grindal Nauen PLLP, and Charles E. Schaffer.
Democratic lawmakers urged the en banc Ninth Circuit to rethink a split decision tossing Cambodian workers’ human trafficking suit against a California importer, arguing Congress specifically amended the federal law following another erroneous Ninth Circuit ruling in the case, and the majority’s refusal to apply those amendments retroactively undermines congressional authority.
In a 21-page amicus curiae brief filed Monday, four lawmakers — Reps. Jerrold Nadler, D-N.Y.; Jan Schakowsky, D-Ill.; James P. McGovern, D-Mass.; and Mark Pocan, D-Wis. — argue that the panel’s 2-1 decision poses a significant challenge to the separation of powers, and the full Ninth Circuit should allow the Abolish Trafficking Reauthorization Act, passed in 2023, to apply retroactively to the workers’ claims against importer Rubicon Resources LLC.
The lawmakers note that following a prior erroneous Ninth Circuit 2022 decision in favor of the importer — in which the appellate court misinterpreted the scope of the Trafficking Victims Protection Reauthorization Act’s civil liability provision to be narrower than the criminal provisions — the four lawmakers, as well as other members of Congress, “acted immediately to clarify the statute” by unanimously passing ATRA.
The amended law “purposefully used clear language in the statute to indicate its clarifying and technical nature,” but the Ninth Circuit’s 2-1 opinion ignored that language in handing the importer a win for a second time, potentially jeopardizing the “comprehensive TVPRA statutory framework and threaten meritorious forced labor and human trafficking cases,” the lawmakers contend.
“Amici are concerned that the court, in discounting the clear congressional intent expressed in the ATRA, implicates serious questions about the separation of powers and erodes the foundation upon which Congress legislates,” the brief adds.
In light of these “wide-reaching implications,” the lawmakers ask the full Ninth Circuit to grant the workers’ en banc rehearing request.
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The workers’ counsel, Agnieszka M. Fryszman of Cohen Milstein Sellers & Toll PLLC, said Tuesday that the question presented by this case is an important issue that merits en banc review.
“We welcome the support from the congressional amici,” Fryszman said.
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The plaintiffs are represented by Agnieszka M. Fryszman, Nicholas J. Jacques and Madeleine Gates of Cohen Milstein Sellers & Toll PLLC, Dan Stormer of Hadsell Stormer Renick & Dai LLP, Catherine Sweetser of UCLA Law Clinics, and Paul Hoffman and John C. Washington of Schonbrun Seplow Harris Hoffman & Zeldes LLP.
Michelle Yau is spearheading some of the most significant ERISA class actions in the nation. Her cases have garnered more than a billion dollars that will help workers in their retirement. She has successfully challenged the enforceability of arbitration agreements before three circuit courts of appeal in the past two years. The Supreme Court declined to review her clients’ most recent victory before the 10th Circuit in Harrison v. Envision Management Holding.
But like many plaintiff-side litigators, Yau, chair of Cohen Milstein’s ERISA/Employee Benefits practice, fears for ERISA’s future. As ERISA reaches its 50th anniversary, she is concerned that the Supreme Court’s recent overturn of Chevron deference, like arbitration agreements, will provide yet another avenue for bad-acting companies and plan managers to undermine employee protections and their rights to retirement benefits.
With a career forged in the fires of Wall Street and tempered at the U.S. Department of Labor, Yau, a first-generation American, is passionate about economic justice for retirees and workers.
Lawdragon: Congratulations on your appellate victories. First, tell us about ERISA and why it’s important.
Michelle Yau: Thank you. Yes, certainly. The Employee Retirement Income Security Act (ERISA) is a niche area of law. It was enacted by Congress in 1974, 50 years ago this September, to protect American workers’ retirement savings, whether invested in corporate pension plans, 401(k) plans, employee stock option plans (ESOPs) or other retirement plans, from being mismanaged or abused by companies and plan administrators.
In my opinion, ERISA is a hallmark of bipartisan efforts to protect workers, their retirement savings, their healthcare plans, and, in effect, to protect the American dream of upward mobility and prosperity.
LD: What do you do as a plaintiff-side ERISA litigator?
MY: Despite our having this incredibly protective worker rights law, not all plan providers and fiduciaries abide by ERISA. Sometimes it’s lack of oversight or some other form of negligence. Other times, unfortunately, it’s intentional and motivated by unchecked profits or just greed that causes hundreds of millions of dollars in retirement benefit losses. So, my litigation team tries to hold the people who control retirement plans accountable to the millions of employees and plan participants to whom they owe fiduciary duties by recouping their losses.
Plaintiff-side litigation, particularly class action litigation, plays an important role in enforcing ERISA. If we’re lucky, we can also create good law to further protect retirees and workers.
LD: What inspired you to become a plaintiff-side ERISA litigator?
MY: A few things. I taught English as a Second Language to new immigrants in high school and law school, and I saw how hard they worked. My students had several jobs, often taking multiple buses to get to each of them. They worked incredibly hard to provide for their families, which made me realize how important worker protection laws are. As an undergrad at the University of Virginia, I fought for campus workers to be paid a living wage. I planned to go to law school to fight for workers’ rights and against corporate malfeasance.
But my dad, an immigrant and consummate pragmatist, encouraged me to get a job and enter the real world before heading off to Harvard Law School. When I had the opportunity to work on Wall Street at one of the most successful investment banks, I decided to listen to my dad. I deferred my enrollment at Harvard Law and worked on Wall Street as a financial analyst doing mergers, acquisitions and initial public offerings.
LD: Big life decision. Good advice from your dad?
MY: Best advice ever! My training in financial modeling, accounting and economics was invaluable. I learned about numerous complex financial products and became facile in corporate lingo. Perhaps most importantly, I experienced firsthand the immense pressure on Wall Street for corporations to push for greater and greater profits. Seeing Wall Street from the inside has been incredibly helpful for ERISA lawsuits which often involve complex valuation issues and financial concepts.
Perhaps not surprisingly, I felt uncomfortable in a culture where “synergies” that made corporate mergers profitable boiled down to the elimination of thousands of jobs and increasing the workload of the remaining employees. These experiences were deeply motivating. I understood that America’s workers needed someone in their corner fighting to make them visible to these profit-driven institutions.
Seeing Wall Street up close and in-person made everything click for me. The ruthless focus on the bottom line made me incredibly pragmatic. My analytical skills were sharpened by the frenetic pace of Wall Street deal-making. I also gained deep confidence in my quantitative skills and financial acumen. This has made me fearless when up against large financial institutions in court.
LD: Sounds like an impactful experience. How about your DOL experience?
MY: After law school, I went to the U.S. Department of Labor as an Honors Program Attorney. For me, the DOL was the perfect next step where I got hands-on experience enforcing the law. Plus, it fulfilled that do-gooder part of me.
Both experiences really shaped and informed my work at Cohen Milstein. Our job is to get the biggest and best deal for our clients who have been harmed. By making them pay where it counts: their bottom line, this deters companies from violating the law.
LD: So, why the switch to the private sector?
MY: I loved working at the DOL. We were changing people’s lives in meaningful ways. But I wanted to do more. It was about this time that the head of Cohen Milstein’s ERISA practice reached out to me. He convinced me that I could achieve the same meaningful worker relief in the private sector, but at a much faster pace.
I’m glad he was persistent! Here I am today, 20 years later. Cohen Milstein was (and still is) like a private attorney general’s office that enforces the law through, often, cutting-edge ERISA class actions.
LD: And are you doing more now?
MY: Absolutely! I’ve got a small, dynamite team. We handle 20 to 30 cases at any given time. Just in 2024 so far, we have achieved more than $83M in class settlements and won more than a dozen motions. Plus, some of our cases, like the recent appellate victories, involve novel legal issues.
LD: That is a lot! Tell us about your appellate victories and what else keeps you awake at night.
MY: ERISA is about to celebrate its 50th anniversary, but it is at a crossroads. In addition to being challenged by corporate greed, it’s facing two steep challenges before the courts. The first is arbitration clauses with class action waivers. We see these quite frequently, for instance, in ESOP agreements. The second is the Supreme Court’s recent decision in Loper Bright Enterprises v. Raimondo, which overturned the decades-old Chevron doctrine of judicial deference to federal agency’s interpretation of ambiguous statutes.
LD: Why are these two issues important?
MY: To date, ERISA has been implemented and interpreted through regulations issued by the IRS and the Department of Labor. Given the overturn of Chevron, these regulations may be jeopardized, which could give companies more incentive to ignore ERISA, particularly companies headquartered in circuits with less than favorable track records of upholding pro-employee statutes. This could glut the courts with unnecessary lawsuits and potentially undo decades of bipartisan work. It’s early days. A lot remains to be seen.
But even before the overturn of the Chevron deference, worker protections under ERISA faced significant legal hurdles before the courts due to corporate intervention. Namely, arbitration clauses with class action waivers and restrictions on collective remedies, which can prevent employees from bringing meaningful claims, pursuing fulsome awards, and fully holding companies and plan fiduciaries accountable.
LD: Why is challenging the enforceability of arbitration clauses so important?
MY: Companies inserting arbitration clauses with class action waivers in employment agreements is not new. But there has been a noticeable increase in arbitration clauses in employee retirement and health plans.
Congress took a lot of care in drafting and passing ERISA. As a result, it’s uniquely protective of worker rights for retirement benefits.
These arbitration clauses should be unenforceable because they undermine the very protections Congress wrote into ERISA. They are an attempt to prevent plan participants from exercising their statutory rights under ERISA and before the courts. Yet, plan providers and fiduciaries continue to insert arbitration clauses, presumably to purposefully deter such an exercise.
LD: How have you challenged this issue before the courts of appeal?
MY: The legal doctrine we’ve been relying on is Supreme Court law, which says “you can change where someone has to file a case” like a lawsuit. That’s just fine under arbitration law. (That’s why you could be pushed to an arbitral form.) But you can’t take away their rights in the process. ERISA is special and unique because the statute says a participant can sue on behalf of a plan and restore “losses to the plan,” not just to their personal account. Arbitration provisions that contain class action waivers typically bar collective remedies and therefore take away this plan-wide relief. Most of the courts of appeals have agreed that these arbitration clauses waive workers’ statutory rights. That is why we have prevailed.
So far, our clients have successfully challenged the enforceability of arbitration agreements before the 3rd, 7th, and 10th circuits. There have also been successful challenges in the 2nd and, most recently, in the 6th Circuit, although not by us. Last October, the Supreme Court declined to re-hear our clients’ victory before the 10th Circuit in Harrison v. Envision Management Holding.
LD: Congratulations. What else are you focused on?
MY: Thank you. We’ve been doing some exciting work in the pension plan space. We found that several large pension plan providers like AT&T and Citgo are using outdated mortality tables when converting retirees’ single life annuities to joint and survivor annuities. This error creates a penalty for married retirees who choose joint pensions that provide survivor payments for their spouses. This kind of “marriage penalty” can cost unsuspecting retirees of being chiseled out of tens of thousands of dollars from their hard-earned pensions.
I’m delighted to report that last week Citgo agreed to a settlement. The settlement terms are not yet public. But I can tell you that this past May, the Northern District of Illinois handed our Citgo pension plan clients two back-to-back wins by not only denying most of Citgo’s motion for summary judgment, but also granting our motion for class certification. In July, the 7th Circuit declined to hear Citgo’s appeal of the class certification ruling. We estimate that Citgo underpaid approximately 1,700 pensioners roughly $31M since the 1970s. So, I am hopeful the settlement will make up for a large portion of this loss.
LD: Wow. That is a lot of money. How about 401(k)s?
MY: In the 401(k) space, we continue to tackle self-dealing and fee-scraping practices involving large, sophisticated financial companies that have proprietary funds. This is a real and compelling issue. If you think about it, an extra ten basis points or 0.1 percent in fees can mean a windfall for the company or hundreds of millions of dollars in employee losses.
This past July, the Southern District of New York granted final approval of a $19M settlement against New York Life Insurance Company for allegedly steering participants of the company’s 401(k) to its own in-house funds.
We settled another case against a hedge fund manager that invested all their employees’ 401(k) accounts in their own niche hedge fund products. Then, even though the hedge fund company went bankrupt, we were able to recover millions of dollars for the employees, which on average will result in about $30,000 in recovery payments for each class member.
LD: What about ESOPs?
MY: ESOPs are one of my favorite areas to litigate. Our ESOP clients are usually tradespeople. Workers and professionals who are in construction, airplane repair services, food services, you name it – the backbone of America – who are invested in their work and companies.
In most of these cases, the company’s owner creates an ESOP retirement plan to enable the employees to own the company. For a lot of people that’s the American dream! Unfortunately, we have seen situations where the owner or the plan manager (intentionally or otherwise) sells the company to the ESOP at an exaggeratedly overvalued price only for the value of that company to tank shortly after.
LD: Can you give us an example?
MY: Yes. A recent case involves Triad Manufacturing’s ESOP. The company’s stock was sold to the ESOP for approximately $106M and was valued at just $3.3M two weeks later. We were able to recover $14.8M. That may not seem like much, but that was roughly $43,000 for each employee.
LD: Sounds like a big recovery. What’s the most gratifying part of your job?
MY: I love what I do! The nature of the work is incredibly gratifying because we can meaningfully change the lives of employees and retirees by getting them tens of thousands of dollars each when their rights have been trampled.
LD: You sound incredibly busy. Any final thoughts?
MY: We are incredibly busy. We also have a nice success rate. Fortunately, I have a talented team. It takes a village!
ERISA is an important area of law that some plan providers and fiduciaries abuse or ignore. Given corporate America’s use of arbitration clauses and class action waivers to thwart retirees from publicly holding them to account before the courts and Loper Bright potentially opening another avenue of abuse of ERISA, I’m not slowing down anytime soon!