A billion-dollar plan has come to terms—cash and non-monetary terms—with participant-plaintiffs represented by Capozzi Adler that had made claims the plan paid $77 per participant, when plans of similar sizes were paying as little as $25 per participant.
The suit had been filed against Advance Stores Company, Inc.—the plan sponsor and a named fiduciary, as well as the Retirement Committee of Advance Auto Parts, Inc. 401(k) Plan (who were appointed by Advance through its Board of Directors for selecting and monitoring the investment options under the plans).
The Allegations
The suit was actually two suits later combined—one filed in October 2021, the other in December of that year—that had claimed that the plan fiduciaries (and those who appointed them) of breaching their duties as fiduciaries by “inter alia, (1) failing to actively monitor the Plan’s recordkeeping and administrative expenses and pursue reduction in Plan costs to participants; (2) failing to ensure investment funds in the Plan were prudent and in the best interest of Plan participants; (3) failing to monitor and mitigate the excessive total Plan costs; and (4) and Monitoring Defendants’ failure to monitor the performance and processes of the Committee Defendants to ensure the adequate performance of their fiduciary obligations.”
All of which rolled up into two basic counts: Breaches of Fiduciary Duty of Prudence (asserted against the Committee) and Failure to Adequately Monitor Other Fiduciaries (asserted against the Board and Advance Stores). For their part, the defendants deny all of these claims and deny that they ever engaged in any wrongful conduct.
The Settlement Terms
The settlement terms (Sweet et al. v. Advance Stores Company Incorporated et al., case number 7:21-cv-00549, in the U.S. District Court for the Western District of Virginia) were presented for review/approval of the court by plaintiffs Janet Sweet, Safi M. Riaz, Bessie M. McAdams, Keith O. Edwards, and Peter H. Dargel (represented by Capozzi Adler PC—and Fitzgerald Hanna Sullivan PLLC). In doing so, they noted that “after two years of hard-fought litigation”—and “only after vigorous arms-length negotiations between counsel experienced in ERISA class actions and under the auspices of Robert A. Meyer, Esq. of JAMS, a third-party private mediator with extensive experience mediating ERISA actions”—a settlement consisting of a cash payment of $1,700,000 and some “non-monetary relief” have been presented for approval.
This, they assert, is “an excellent result, providing a substantial, immediate payment to Settlement Class members and eliminating the risks and cost of trial. A trial could result in a reduced recovery or no recovery at all.”
As for the non-monetary relief, the settlement says that “within three (3) years after the Settlement Effective Date, if the Plan’s fiduciaries have not already done so, the Plan’s fiduciaries will conduct or cause to be conducted a request for proposal relating to the Plan’s recordkeeping services.” Beyond that, “[t]o the extent not already in place, the Plan’s fiduciaries shall institute two (2) hours of mandatory fiduciary training for all members of the Retirement Committee of Advance Auto Parts to take place on an annual basis.”
The settlement also includes “an attorney fees award not to exceed thirty-three and one third percent (33 1/3%) of the Gross Settlement Amount (a maximum of $566,610), as well as a reimbursement of attorney expenses up to $100,000.00 and a maximum of $10,000 incentive awards for each of the Class Representatives for their work in bringing the case forward. All that to be netted against the Gross Settlement Amount.”
Will the court agree? Stay tuned.
