U.S. Supreme Court Will Hear Case Brought by Schlichter, Bogard & Denton
As reported by the New York Times, the U.S. Supreme Court has agreed to hear a case brought by the attorneys of Schlichter, Bogard & Denton. In Tibble v. Edison, No. 13-550 (U.S), the Schlichter team represents the workers of energy company Edison International who participate in the company’s 401(k) plan. The suit argues that the administrators of the plan violated federal law by only offering high-fee investment options when identical, lower-cost options were available. Additionally, Edison told its workers that it would pay the costs of administering the plan yet, in fact, charged participants hidden fees to pay those costs. As a result, Edison’s profits were higher while employee retirement savings were lower.
Earlier this year, a federal judge in California agreed with the 401(k) participants that there was no credible explanation for Edison offering only high-fee investment options, and that doing so had caused the plan substantial damage. However, the judge also found that because most of the funds had been offered more than six years before suit was filed, the plaintiffs were barred by a statute of limitations from pursuing the claims. After an appeals court upheld the judge’s ruling, Schlichter, Bogard & Denton successfully petitioned the Supreme Court to take up the question of whether corporate fiduciaries can escape liability for failure to monitor 401(k) plan investments for excessive fees, simply because that failure had been ongoing for more than six years.
“The law requires large 401(k) plan fiduciaries to use their enormous bargaining power to obtain fees that are dramatically lower than those paid by the Edison workers,” said Jerome J. Schlichter, founder and senior partner. Mr. Schlichter has been called a private attorney general by a federal judge who presided over a similar case, remarking on the office of Schlichter, Bogard & Denton risking breathtaking amounts of time and money while overcoming many obstacles for the benefit of employees and retirees. Oral arguments in the case are likely to be held in early 2015.
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