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Excessive Fee Suit Appeal Runs Out of Time


There’s that old caution about being a day late, and a dollar short – well, the plaintiffs in an excessive fee suit were two days late – and missed a key date.

The plaintiffs here were participants in the Georgetown University 403(b) plan – who had been soundly rebuffed in January by U.S. District Judge Rosemary M. Collyer. At that time, Judge Collyer recounted their allegations “thusly” (her word choice): that the plan “retained not one, but three separate recordkeepers” that “charge asset-based fees,” that the defendants “…ignored the abysmal historical investment performance” of the CREF Stock Account and the TIAA Real Estate Account,” that they offered “an overwhelming 300 investment options” and that they “…failed to provide accurate reporting ... in reports filed with the DOL,” and finally that they “approved a loan program that ... violated federal regulations,” and the TIAA Traditional Annuity violates regulations “that all contracts be terminable on reasonably short notice without penalty.” 

All pretty standard fare for the litany of 403(b) university cases that have been filed since August 2016, almost exactly a decade after similar allegations began to be made about 401(k) plans. 

Judge Collyer was no less harsh in her response to the plaintiffs’ ill-timed attempt to amend their complaint, and thus revive the suit that she had dismissed in January “…in part for lack of jurisdiction and in part for failure to state a claim.”

Rules Ruling

In a short but somewhat complicated analysis (for those who don’t fully appreciate the Rules of Civil Procedure, anyway, which apparently includes both parties here – Judge Collyer pointed out that, “Neither party quite appreciates the interaction of these Rules of Civil Procedure”), Collyer explained that “the preliminary issue is whether the Court terminated the case pursuant to its January 8 Order. Since, as the Court confirms, its Order was indeed final, the Court cannot consider a motion to amend without first setting aside the earlier dismissal of the case under the provisions of Rules 59(e) or 60(b),” and the proceeds to outline those standards (we’ll pass on those – but if you’re interested, the link to the ruling is below). If the plaintiffs wanted to revive the case through a new complaint, they needed to do so within 28 days of the January 8 decision – and their February 7 motion to file an amended complaint was two days too late.

In summary, Judge Collyer noted that the plaintiffs “…filed too late to comply with Federal Rule of Civil Procedure 59(e), which governs motions to amend or alter a judgment,” and that while the plaintiffs argued that “…no judgment has been entered in this case and thus they were not required to comply with Rule 59(e),” in fact “…a final judgment was entered and Plaintiffs' motion does not survive analysis under Federal Rules of Civil Procedure 59(e) or 60(b).”

In other words, too little – and too late…

The case is Wilcox v. Georgetown Univ., 2019 BL 196302, D.D.C., No. 1:18-cv-00422-RMC, 5/29/19. 

The State of Litigation

While there have been roughly two dozen of these 403(b) university lawsuits filed since 2016, Georgetown was the fifth university to prevail at trial, joining New York UniversityNorthwestern University, the University of Pennsylvania and Washington UniversityThe University of Chicago settled a similar suit in May 2018, as have Duke University and Vanderbilt. A similar suit against the University of Rochester was dropped.

However, Judge Nora Barry Fischer of the U.S. District Court for the Western District of Pennsylvania has ordered a supplemental briefing after conducting her “own research” and without the parties submitting filings about the University of Pennsylvania decision, ordering the Department of Labor and Severstal Wheeling Inc.’s retirement plan committee to file briefs explaining how the decision affects their pending litigation.