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Aug. 25 — The recent influx of ERISA class action filings is forcing judges to decide a different kind of dispute: one between competing plaintiffs’ attorneys who have, wittingly or unwittingly, targeted the same defendant.
With more than 130 Employee Retirement Income Security Act class actions filed over the past year, it was perhaps unavoidable that some defendants would face lawsuits spearheaded by different plaintiffs’ attorneys. In these cases, judges are often the ones to decide which plaintiffs’ firms will get to see the case through to completion—and share in a potential multimillion-dollar settlement or judgment.
On Aug. 24, a federal judge in Maryland resolved a stand-off between two pairs of plaintiffs’ firms, which each sued Bon Secours Health System Inc. for alleged ERISA violations within a week of each other.
In consolidating the lawsuits—which accuse the hospital of underfunding its pension plan because of a mistaken reliance on ERISA’s “church plan” exemption—the judge appointed a sole law firm, Washington-based Cohen Milstein Sellers & Toll PLLC, as counsel for the proposed class of hospital workers.
In deciding among four different firms, the judge focused on which firms had more experience litigating the relevant issues and which firms raised more “comprehensive” claims in their complaints.
Earlier in August, both Cohen Milstein and its frequent litigation partner, Keller Rohrback LLP, won class counsel appointment in a consolidated lawsuit against Missouri-based Mercy Health. In that four-page order, a federal judge denied class counsel status to the two other firms heavily involved in this area, Kessler Topaz Meltzer & Check LLP and Izard Kindall & Raabe LLP, despite noting that those firms would also be “adequate” representatives of the proposed class.
These appointments in the Bon Secours and Mercy Health cases may be a sign of things to come in other lawsuits challenging the pension plan management of large hospital systems. The law firms involved in these cases have filed competing complaints against six other hospitals, including Wheaton Franciscan, OSF Healthcare System, St. Joseph’s Hospital and a different Mercy Health entity. Most of those lawsuits are in the early phases of consolidation, and disputes over class counsel are likely to come in the future.
It’s not just church plan cases that can raise the possibility of standoffs between ERISA-focused plaintiffs’ attorneys.
On Aug. 19, a federal judge consolidated two recently filed cases challenging the inclusion of stock from Valeant Pharmaceuticals in the retirement plan for Walt Disney Co. workers. In that case, the plaintiffs filed a joint motion for three separate law firms to serve as interim class counsel. The judge denied the motion without prejudice, saying that an appointment wasn’t necessary “merely to maintain the status quo.”
These same questions may come to a head in the recent spate of lawsuits against university retirement plans. St. Louis-based Schlichter Bogard & Denton filed proposed class actions against 12 different universities, and one of the universities—Columbia—was hit with another lawsuit, filed by employment law firm Sanford Heisler.
Those cases are still in the early stages of litigation.
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