The court in Tussey v. ABB Inc. has awarded attorney fees roughly equal to the total damages assessed in the excessive fee case — but it won’t come close to covering their costs.
According to an analysis by Proskauer Rose LLP, the court awarded class counsel $11.7 million in attorneys’ fees and affirmed its earlier award of $2.28 million in costs and class representative awards.
The court explained that the defendant, in its view, “was not merely negligent but rather motivated by self-interest,” and the case made a “significant, national contribution” toward educating “plan administrators, the Department of Labor, the courts and retirement plan participants about the importance of monitoring recordkeeping fees and separating a fiduciary’s corporate interest from its fiduciary obligations.”
In so doing, the court also rejected defendant’s argument that the fee award was disproportionate to the $13.4 damage recovery because defendant had spent $42 million in attorneys’ fees defending the case, and that “[t]ying Plaintiffs’ counsel’s fees to a percentage of the monetary recovery would unfairly deprive them of compensation for the time spent successfully litigating important claims and issues.”
Tussey v. ABB Inc. was a long-running suit alleging that ABB failed to monitor recordkeeping fees and improperly mapped participants’ investments. In the most recent iteration (the ABB case was initially filed in 2006; the district court issued its ruling in 2012), the court found the ABB defendants breached their ERISA fiduciary duties when making a fund menu mapping change. But since the plaintiffs failed to provide damages calculations consistent with the 8th Circuit’s narrow mandate, the court gave the “win” to the defendants.
