March 8, 2019
The lawyers who negotiated a $21.9 million settlement with Deutsche Bank over its 401(k) plan won $6.57 million in attorneys’ fees and more than $850,000 in expenses.
The fee award, which represents 30 percent of the settlement, is justified because the reasonable baseline fee in a complex retirement plan class action is 27 percent, Judge Lorna G. Schofield of the U.S. District Court for the Southern District of New York said. And an upward adjustment to the baseline is warranted because the deal also provides significant “non-monetary relief” in the form of changes to Deutsche Bank’s 401(k) plan, Schofield said in her March 7 order.
The settlement, which received final court approval earlier this month, resolves a class action involving more than 34,000 current and former bank employees. They accused the bank of filling their retirement plan with expensive, poorly performing mutual funds that paid fees to the company. The parties reached an agreement one day before the case was scheduled to go to trial in July 2018.
The Deutsche Bank settlement, in addition to paying an average of $631 per class member, requires the company to delegate decisions involving affiliated funds to an independent fiduciary. The bank also agreed to seek guidance from an independent fiduciary regarding whether any plan mutual funds should be replaced with separate accounts or collective trusts.
The bank employees were represented by Nichols Kaster PLLP, which frequently represents employees bringing class suits over their retirement plan investments. The firm in December won a won a $2 million fee award for its work negotiating a $6 million settlement in a case targeting Oasis Outsourcing Holdings Inc.'s 401(k) plan.
Goodwin Procter LLP represented Deutsche Bank.
The case is Moreno v. Deutsche Bank Ams. Holding Corp., 2019 BL 77818, S.D.N.Y., No. 1:15-cv-09936-LGS, 3/7/19.