NYU Seeks Sanctions Against Staff, Attorneys in Retirement Case

By Carmen Castro-Pagan

New York University’s retirement plan committee wants a federal judge to impose monetary sanctions against six employees and the law firm representing them in a dispute over how the university manages its retirement plans.

St. Louis-based Schlichter Bogard & Denton LLP is best known for spearheading 401(k) fee litigation some 12 years ago. Schlichter in 2016 filed a dozen lawsuits against prominent universities, including NYU, accusing them of allowing excessive fees and imprudent investments in their retirement plans.

Sanctions should be imposed against the employees and Schlichter for filing a duplicative lawsuit in a “blatant attempt to avoid” the court’s prior rulings, the NYU retirement plan committee said in a motion filed Sept. 18 in the U.S. District Court for the Southern District of New York. The committee asked, in the alternative, for an award of attorneys’ fees

Second Lawsuit

NYU employees last year filed a second lawsuit against NYU’s plan committee and 21 individuals after Judge Katherine B. Forrest partially dismissed their original lawsuit and rejected their request to amend the complaint.

Forrest earlier this year dismissed the second lawsuit as duplicative. She held a trial in the original case in April, and later ruled in the university’s favor, holding that the evidence didn’t support the employees’ claims of fiduciary breach.

The request for sanctions comes as part of the second case, which until last month was pending appeal before the U.S. Court of Appeals for the Second Circuit. The employees dropped the appeal after Forrest ruled for the university in the original case.

The committee relied partially on the statements made by another judge in New York who is presiding over a similar lawsuit against Cornell University. In that case the judge ordered the employees’ counsel to meet with their clients and discuss the wisdom and propriety of adding 29 individual defendants. The judge mentioned the negative effects on the individual defendants who will be required to list the lawsuit on every auto, mortgage, or student financial aid application they file.

DLA Piper US LLP represents the committee.

The case is Sacerdote v. N.Y. Univ. Sch. of Med., S.D.N.Y., No. 1:17-cv08834-KBF, defendants’ motion for sanctions 9/18/18.