Supreme Court Revives Northwestern Retirement Class Action

By Top Class Actions | January 25, 2022

Category: 401k

Entrance sign and gardens to Northwestern University. — (Photo Credit: Ken Wolter/Shutterstock)

Northwestern University Retirement Plans Class Action Lawsuit Overview:

Who: The Supreme Court revived a class action lawsuit filed against Northwestern University by a class of its retired workers.
Why: Workers claim Northwestern provided them with expensive and underperforming retirement plans.
Where: The class action lawsuit was revived by the Supreme Court of the United States.

The U.S. Supreme Court has brought back to life a class action lawsuit alleging Northwestern University violated federal benefits law by providing workers with expensive retirement plans with badly performing investments.

The workers’ class action lawsuit, which brought claims under the Employee Retirement Income Security Act (ERISA), had been previously dismissed by the Seventh Circuit in May 2020.

“At times, the circumstances facing an ERISA fiduciary will implicate difficult tradeoffs, and courts must give due regard to the range of reasonable judgments a fiduciary may make based on her experience and expertise,” Justice Sonia Sotomayor wrote in the court’s decision.

In disagreeing with the Seventh Circuit, the Supreme Court ruled the workers’ ability to choose what investments to put their savings into didn’t invalidate their claims.

Seventh Circuit ‘Erred’ In Dismissing Retirees’ Claims

“The Seventh Circuit erred in relying on the participants’ ultimate choice over their investments to excuse allegedly imprudent decisions by respondents,” Sotomayor wrote.

The decision is a major victory for similar class action lawsuits that have been filed against U.S. universities in recent years over 403(b) tax-sheltered retirement plans.

Plaintiffs have argued against fees imposed by the Teachers Insurance and Annuity Association (TIAA) for the recordkeeping services in exchange for access to their annuity plan, Law360 reports.

Northwestern had filed a brief with the court in October, arguing that implementing lower cost recordkeeping relief would ultimately just cause the university to have to introduce new fees and drop its TIAA annuity offering, Law360 reports.

Last month, Walgreens agreed to pay $13.75 to resolve a class action lawsuit accusing the company of mismanaging its employees’ retirement plans.

Have you had your retirement plan mismanaged by your former employer? Let us know in the comments!

The plaintiffs are represented by David Frederick, Jeremy Newman and Jimmy Ruck of Kellogg Hansen Todd Figel & Frederick PLLC and Jerome Schlichter, Andrew Schlichter, Sean Soyars and Michael Wolff of Schlichter Bogard & Denton LLP.

The Northwestern University Retirement Plans Class Action Lawsuit is Hughes v. Northwestern University, et al., Case No. 19-1401, in the Supreme Court of the United States.