Back from spending a week in the great state of Maine (you go, Palace Diner!), but even when I am away, “the sun comes up [a]nd the world still spins,” nowhere more, it seems, then in the world of ERISA litigation. So over the next few days, I am going to try to pass on some links and thoughts concerning a few things that caught my eye while I was away.
First off, of course, is the barrage of lawsuits against university retirement plans. I have previously tweeted my cynicism over the fact that all of the defendants are bold faced name universities, asking whether only prestigious universities have retirement plans or whether, instead, only they have ones large enough to attract plaintiffs’ lawyers. Obviously, neither is true and the comment, standing alone, is tongue in cheek. But I have to ask this question. Years ago, I tried, and essentially won (the plaintiff/patent holder gave up mid-trial after its expert spit the bit on the stand), a patent infringement case where the patent holder had embarked on a litigation campaign built around suing smaller fish who couldn’t afford to vigorously defend the suits so as to develop helpful rulings and precedents before taking on bigger fish (the campaign worked until they ran into my emerging company client, for whom we were able to work out a cost efficient defense strategy that allowed us take the case to trial and demonstrate the invalidity of the patent; see my article on that approach here). I am wondering if it works in reverse here, with regard to excessive fee claims against universities. Is the idea to win against large, prestigious and well-lawyered universities and their plans, creating precedents that make it easy to then pick off low hanging fruit in the form of the nation’s numerous non-bold faced name colleges and universities, who may then just settle quick if bigger name and richer universities have already, in years past, had to pay up? Time will tell, but it’s the strategy I would use.
I also wonder, but haven’t had the time to look into it, whether the universities selected for suit reflect a deliberate approach to forum shopping. In past articles, presentations and blog posts discussing the early excessive fee cases, I have argued that certain circuits were simply not the best place for the plaintiffs to have brought the first of those cases, and that it might be fair to say that the plaintiffs’ bar picked the wrong hills on which to fight at the outset of those cases. Here, I wonder if the determination of the universities to sue can be linked, in part, to the circuits in which they sit. I also wonder whether the nearly simultaneous filing of the current round of suits likewise reflects an intentional decision to move the cases along on a parallel track in multiple circuits, with at least two purposes in mind. The first might be thought of as hedging, which is kind of ironic since we are talking about lawsuits that strike at the massive amounts of retirement assets managed by the financial industry, to whom we all owe either debt or blame for the excessive use in modern discourse of the word “hedging.” But if you think about it from that perspective, the multiple suits in multiple circuits makes complete sense: all you have to do is hit in one circuit to make up for losses in other circuits. In other words, the plaintiffs’ lawyers are hedging their bets, assuming that even if the development of the law in one circuit on these theories of liability turns out unfavorable to them, the development of that law in others may not be. The second possible purpose could be seen as typical of a deliberate litigation strategy: to create conflicts among circuits, increasing the possibility of bringing the issues eventually to the Supreme Court if the law does not break in favor of the plaintiffs as these cases develop.
Anyway, that’s enough for a first day back in the office, other than to note why I was thinking about this while lying on the beach, which was Bloomberg BNA’s Jacklyn Wille’s excellent and on-going coverage of these suits, which included this piece that popped up in my twitter feed while I was away.