How much injury do you need to suffer in order to bring an excessive fee suit?
That issue arose in one of a half-dozen cases that had been frozen in place last fall pending the U.S. Supreme Court’s decision in Hughes v. Northwestern University, decided this past January.
The case at hand was brought by plaintiff Alison J. Nohara, a participant in the Prevea Clinic, Inc., 401(k) and Retirement Plan against Prevea Clinic Inc. and the Board of Directors of Prevea Clinic Inc. with regard to the $281 million 401(k) plan. Judge William C. Griesbach had placed that case (and five others) on hold, but lifted the stay and invited the parties to submit simultaneous supplemental briefing in light of the Supreme Court’s decision. They did so on Feb. 7, 2022.
Amend Mien
As it so happens, plaintiff Nohara wanted to amend her suit to add another plaintiff (Patti Szydel), asserting that her injuries/claims were “substantially identical” to hers—she also included some additional allegations to support the claims in her original suit. The Prevea defendants opposed that attempt, arguing that she couldn’t change her complaint to “correct a defect in Article III standing that deprives the Court of jurisdiction.” (Standing refers to whether or not the party has the legal right to bring suit.)
Now, according to the defendants here (Nohara v. Prevea Clinic Inc., 2022 BL 164942, E.D. Wis., No. 2:20-cv-01079, 5/12/22), Nohara didn’t have that legal right to bring suit because “she could not have sustained an injury-in-fact that is anything but de minimis.” Prevea explained that she only participated in the plan for two weeks at the time she brought suit and “…this action results in alleged damages of, at most, $0.22 and that federal jurisdiction is not available for such de minimis claims.”
Standing, Still
Well, Judge William C. Griesbach of the U.S. District Court for the Eastern District of Wisconsin didn’t see it that way. Citing another case, Judge Griesbach outlined the standard: “Standing exists when the plaintiff suffers an actual or impending injury, no matter how small; when that injury is caused by the defendant's acts; and when a judicial decision in the plaintiff's favor would redress that injury.
“Because Plaintiff has alleged an injury to her own account, the Court cannot find that Plaintiff lacks standing on the ground that her injuries are de minimis,” Griesbach concluded.
Further, because the standards for considering amendments to the original claim are relatively lenient—"[u]nless it is certain from the face of the complaint that any amendment would be futile or otherwise unwarranted, the district court should grant leave to amend.” He explained, “In this case, the Court is not certain that any amendment would be futile. Plaintiff filed her motion to amend while Defendants’ motion to dismiss was pending and no discovery had been conducted. Given Rule 15’s liberal amendment policy, the Court will grant Plaintiff's motion to amend. Because the Court grants the motion to amend, Defendants’ motion to dismiss is denied as moot.”
And granted plaintiff Nohara’s motion to amend her original suit.
In sum, it’s not the extent of the injury to bring suit—but that there was an injury at all.
