A federal judge has rejected a “friend of the court” filing in an excessive fee case against the American National Red Cross.
In late August, noting that “converting subpar allegations into settlements has proven a lucrative endeavor—mostly for the lawyers bringing these lawsuits,” the U.S. Chamber of Commerce filed an amicus brief[i] in a suit filed last March challenging the practices of the fiduciaries of the $1.2 billion retirement plan of the American Red Cross in the U.S. District Court for the District of Columbia.
“What began as a steady increase has exploded in the past 18 months, culminating in over 100 excessive-fee suits in 2020—a five-fold increase over the prior year—and many more lawsuits filed this year,” the Chamber wrote in the brief, going on to explain that, “Just five firms were responsible for the vast majority of 401(k) litigation in 2020, and almost half of recent lawsuits were filed by Plaintiffs’ counsel in this suit, Capozzi Adler.”
However, amicus briefs filed by outside parties are typically allowed only when a party lacks competent representation or when the outside party has unique information or perspective that will help the court, Judge Emmet G. Sullivan of the U.S. District Court for the District of Columbia said Tuesday, according to Bloomberg Law.
Citing precedent, the order notes that, “An amicus brief should normally be allowed when a party is not represented competently or is not represented at all, when the amicus has an interest in some other case that may be affected by the decision in the present case (though not enough affected to entitle the amicus to intervene and become a party in the present case), or when the amicus has unique information or perspective that can help the court beyond the help that the lawyers for the parties are able to provide. Otherwise, leave to file an amicus curiae brief should be denied.”
Sullivan then noted that, “the Court, in its discretion, finds that (1) movants have not shown that a party is not adequately represented, and (2) several of movant’s arguments are duplicative of those in the defendants’ motion to dismiss.”
Sullivan hasn’t yet ruled on the Red Cross’ motion to dismiss the case.
The Chamber has recently filed similar briefs in cases challenging the retirement plans of Xerox Corp., Humana Inc., and Cornell University. Meanwhile, Capozzi Adler PC (representing the plaintiffs in the American Red Cross) has been one of the more active litigants of late. In May 2021, they also filed suit against the $5.3 billion Humana Retirement Savings Plan, and in June against the $2.3 billion Wake Forest University Baptist Medical Center. The firm also had a busy 2020, having filed suit against LinkedIn, Universal Health Services, Inc., and before that Aegis Media Americas Inc., as well as the $2 billion health technology firm Cerner Corp., Pharmaceutical Product Development, LLC Retirement Savings Plan, Gerken v. ManTech Int’l Corp—and the appeal of losses at the district court in a case involving Salesforce.
Goodwin Procter LLP and the U.S. Chamber Litigation Center filed the brief.
[i] An amicus curiae (in Latin, “friend of the court”) brief is one filed by someone who is not a party directly involved in a case in an attempt to help the court by providing information, expertise, or insight that has a bearing on the issues in the case. However, and as the situation above suggests, it is up to the court as to whether it chooses to consider those perspectives.
