Parties Settle on Plaintiff’s Attorney Tab in Excessive Fee Case

It’s taken more than a decade to get there, but the parties in the case of Tibble v. Edison have agreed upon a fee for the plaintiff’s attorneys in the case.

The recommendation of the parties to the court is that the law firm of Schlichter Bogard & Denton LLP will receive $5.8 million for all attorney fees and taxable costs and non-taxable litigation expenses, in exchange for which plaintiffs and their attorneys (including Class Counsel) waive and forever relinquish their right to seek any additional payment of attorney fees or costs from defendants. Assuming the court concurs with the recommendation, that sum is to be paid to the law firm on or before Nov. 1, 2017.

The issue – in a case that has made it all the way to the U.S. Supreme Court and back – here involved 17 mutual funds that were chosen as investment options for the plan in March 1999. In August, having found that a prudent fiduciary would have invested in the institutional-class shares for each mutual fund, Judge Stephen Wilson in the U.S. District Court for the Central District of California turned his attention to when the breach actually occurred, and applying guidance from the Supreme Court in Tibble I, found that the defendants were liable for breaching the duty to monitor from Aug. 16, 2001, onward, acknowledged a stipulation of damages, and directed the parties to come to an agreement on the calculation of damages. He then noted that the parties had stipulated that damages up until January 2011 was $7,524,424, and the parties subsequently agreed on a figure of another $5.6 million in additional damages (for a total of $13,161,491).

In addition to the plaintiff’s attorney fees, the plaintiffs will separately move for an award of their expert witness fees and an incentive award to the class representatives from the judgment amount by no later than Nov. 6, 2017, and the parties will also submit a plan for providing reasonable notice to class members of plaintiffs’ intended motion to recover non-taxable costs and fees from the judgment, and to afford them an opportunity to object to this motion, on or before Nov. 6, 2017.

A Bloomberg BNA analysis of Bloomberg Law dockets (see below) indicates that the Schlichter law firm has racked up more than $100 million in fees for its work over the past decade, with many cases still in the pipeline, including a series of lawsuits focused on university 403(b) and 401(k) plans.

schlichter settlements

Add Your Comments

2 Comments

  1. AJL
    Posted October 18, 2017 at 10:58 am | Permalink

    Why doesn’t somebody file a class action suit against the attorneys for excessive fees?

  2. Steff
    Posted October 27, 2017 at 3:54 pm | Permalink

    AJL – Yours is a very good Question. Does anyone stop to consider the “source” of funds when a provider is subjected to the settlement amounts listed in the Bloomberg BNA Table? Might that source be future Plan Sponsors or Future Plan Participants?

    Now seems like a great time to have that discussion. I refer you to the 2016 Spring edition of NAPAnet the magazine (Page 54).

    http://www.napa-net.org/wp-content/uploads/NAPANetTheMagazine_2016.06.01_pg54_InsideThePlanSponsorsMind_Fortune500PlansInTheCrosshairs.pdf

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