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Edison International agreed to pay $5.8 million in attorneys’ fees and costs to Schlichter Bogard & Denton, which represented a class of current and former employees who sued the utility company over including high-fee mutual funds in its 401(k) plan ( Tibble v. Edison Int’l , C.D. Cal., No. 2:07-cv-05359, joint stipulation for payment to plaintiffs’ attorney fees and costs 10/16/17 ).
Edison agreed to pay that amount in exchange for a waiver of the class’s right to seek additional payment of fees or costs for breaching its fiduciary duties under the Employee Retirement Income Security Act, according to a joint stipulation filed Oct. 16 in federal court in California.
The agreement comes just weeks after a federal judge issued a $7.5 million judgment against Edison for its decision to include high-fee retail share mutual funds in its 401(k) plan when identical, lower-cost institutional share classes were available. Last month, the parties also agreed that Edison would pay $5.6 million in additional damages to the class.
This has been a hard fought case going on for 11 years and this is the culmination of that process, Jerome Schlichter, founder and managing partner of Schlichter Borgard told Bloomberg Law Oct. 17. Defendants decided to fight every step of the way as the case underwent multiple proceedings in trial court, appeals court and the Supreme Court, Schlchter said.
St. Louis-based Schlichter Bogard & Denton is best known for triggering the litigation frenzy over excessive fees in 401(k) plans more than 10 years ago. Since then, the firm has reached multimillion-dollar settlements in almost a dozen cases over 401(k) fees.
These settlements have led the firm to recover more than $111 million in fees for its work in actions against major companies, including Lockheed Martin ($20.7M), Boeing ($19M), and Cigna ($11.7M), according to an analysis of Bloomberg Law dockets.
The judgment against Edison was only the second one reached after trial in a case accusing a retirement plan fiduciary of imprudent and disloyal investment selection. In 2015, a federal judge in Missouri ordered ABB Inc. to pay more than $11.6 million in attorneys’ fees and expenses after issuing a $13.4 million judgment in 2012. The fees award against ABB was later vacated and remanded to the district court. In that decadelong case, the district court pointed out that ABB and Fidelity were paid $42 million in fees through the end of trial.
The participants in Edison’s 401(k) plan will seek an award of their expert witness fees and an incentive award to the class representatives from the judgment amount, according to the stipulation. Under the law, the loosing party, as Edison in this case, must pay attorneys’ fees but isn’t required to pay the expert witnesses’ fees, Schlichter said. The amounts remained to be calculated, he added.
Edison declined Bloomberg Law’s request for comments.
O’Melveny & Myers LLP represents Edison.
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Text of the joint stipulation is at http://www.bloomberglaw.com/public/document/Glenn_Tibble_et_al_v_Edison_International_et_al_Docket_No_207cv05/10?doc_id=X1Q6NTNJJ482&fmt=pdf.
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