Believe it or not, there’s some unfinished business from the case of Tibble v. Edison.
We last heard of the case back in September 2017, when the parties reached agreement on the remaining piece of the damages calculation in the long-running suit. The case involved 17 mutual funds that were chosen as investment options for the plan in March 1999. For each of those funds, the Edison plan fiduciaries initially selected the retail shares instead of the institutional shares, or failed to switch to institutional share classes once one became available.
Here the plaintiffs contend that the fiduciary defendants breached their duty of prudence by not switching the retail shares of the 17 funds at issue to institutional shares. The funds at issue remained in the plan beyond Aug. 16, 2001 (the relevant date for the statute of limitations), and many remained in the Plan until Feb. 1, 2011, when the plan fiduciaries removed all mutual funds from the plan.
Schlichter Bogard & Denton represented the participants in the case, which has gone all the way up to the U.S. Supreme Court and back (for those who have lost count, we’re talking two trials, a number of trips to the U.S. Court of Appeals for the Ninth Circuit, and a ruling by the U.S. Supreme Court regarding the scope of a fiduciary’s obligation to review investment option.
Back in September, what had looked to be the last element of the suit – calculation of damages from the period 2011 to the present – resulted in an agreement that Edison would pay $5.6 million in additional damages.
So, what’s the deal?
Well, Schlichter Bogard & Denton, which had already been awarded $5,800,000 in attorney fees in the class action settlement (of some $13,161,491), subsequently filed a motion to deduct $964,212 from the class award… to reimburse class counsel for expert witness fees. A district court denied that motion, leading to the current appeal.
The appellate court (Tibble v. Edison Int’l, 9th Cir., No. 18-55974, unpublished 1/6/20) noted that the district court denied the motion “because they prevailed on only one of ten claims, the district court did not rely on any particular expert’s conclusions in reaching its decision on that claim, and the evidence offered in support of the motion did not show that any particular expert’s work was crucial or indispensable to the claim upon which Appellants prevailed.”
That all said, the appellate court concluded that “…it cannot be said that the district court (1) relie[d] on an improper factor, (2) omit[ted] a substantial factor, or (3) commit[ted] a clear error of judgment in weighing the correct mix of factors.” And affirmed the decision of the district court in denying the motion.
