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New Cases and Developments

NACUA's Legal Resources staff summarizes current higher education cases and developments and provides the full text of selected cases to members. New cases and developments are archived here for up to 12 months.  Cases provided by Fastcase, Inc.

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Employee Benefits & ERISA; Faculty & Staff

Sacerdote v. New York University (S.D.N.Y. Feb. 13, 2018)

Opinion and Order granting Plaintiffs’ Motion for Class Certification. Plaintiffs allege that New York University breached fiduciary duties of loyalty and prudence under the Employee Retirement Income Security Act (ERISA).  In certifying the class of plaintiffs, the Court found that Plaintiff’s had established the numerosity requirement for class certification, since between 19,000 and 24,000 employees participated in the retirement plan, thus making joinder impracticable.  The court also determined that the was a commonality in questions of law and fact and a typicality of circumstances among the named Plaintiffs and the unnamed class of individuals. The court also determined that the Plaintiffs were adequate representatives of the proposed class.

2/14/2018
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Employee Benefits & ERISA; Faculty & Staff

In re Walker v. Long Island University (N.Y. App. Div. Dec. 20, 2017)

Decision and Order denying Petitioner’s Motion for Summary Judgment and granting Respondent’s Cross-Motion for Summary Judgment. Walker, a deceased former employee of Long Island University (LIU) and represented by her estate’s administrator, alleged that LIU’s death benefits should be turned over to Walker’s estate and distributed through intestacy, rather than distributed to Walker’s sister who was designated a beneficiary. The court found that LIU met its burden in proving that the death benefit was ancillary to the group term life insurance policy, that Walker while alive designated her sister as beneficiary of the death benefit, and that LIU acted according to its policy of paying the death benefit to a deceased’s designated beneficiary, while Respondent failed to show that LIU was required to pay the death benefit to the estate. 

1/4/2018
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Employee Benefits & ERISA; Faculty & Staff

Nicolas v. The Trustees of Princeton University (D. N.J. Dec. 19, 2017)

Opinion denying Defendant’s Motion for Reconsideration and granting Defendant’s Motion to Stay.  This is a class action suit that alleges breaches of fiduciary duties under the Employee Retirement Income Security Act (ERISA).  In particular, Plaintiff, as a participant in Princeton University’s retirement plan and on behalf of a class of other participants and beneficiaries, alleged that Princeton caused participants to pay excessive fees, failed to negotiate lower fees or conduct competitive bidding for record keepers, contracted with two record keepers instead of one, administered an asset-based model instead of a revenue sharing model, and failed to remove underperforming investment options.  In granting Defendant’s motion to stay proceedings pending the outcome of the Third Circuit case in Sweda v. University of Pennsylvania, the court found that a stay would promote judicial economy and “prevent[] needless back and forth” since the claims in the lawsuits were “strikingly similar.”  The Court denied Defendant’s Motion for Reconsideration, hesitant to “disturb its previous ruling, given that the Third Circuit will soon resolve many of the precise issues that Defendant Requests this Court to reconsider.”

1/3/2018
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Employee Benefits & ERISA; Faculty & Staff

Lane, et al. v. The Bd. of Trustees of California State Univ. (Cal. App. Nov. 22, 2017)

Unpublished Opinion affirming summary judgment for the Defendant. Plaintiffs are retired professors of California State University at Long Beach (CSULB) and members of the California Public Employees’ Retirement System (CalPERS) who seek declaratory relief or a writ of mandamus to correct alleged errors by the Defendant, which they argue resulted in CalPERS to under-calculate their pension payments.   Plaintiffs attribute the purported underpayments to their election to have their salaries paid over 12 months, instead of the 8-month academic year, during which Plaintiffs earned their compensation.  The court found that Plaintiffs failed to exhaust administrative remedies provided to them by California statutes and further, an exception to the exhaustion requirement did not apply because an adequate administrative remedy that addresses Plaintiff’s claim existed, and statements by a CalPERS retirement program specialist did not make the administrative process futile. 

11/29/2017
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Employee Benefits & ERISA; Faculty & Staff

Cunningham, et al. v. Cornell University (S.D.N.Y. September 29, 2017)

Memorandum and Order granting in part and denying in part Defendant’s Motion to Dismiss. Plaintiffs, as participants and beneficiaries of the Cornell University Retirement Plan and Tax Deferred Annuity Plan (the Plans), alleged that Defendants engaged in prohibited transactions and violated their fiduciary duties under sections 404 and 406 of the Employee Retirement Income Security Act (ERISA). The court found that only Plaintiff’s claims of a fiduciary breach of the duty of prudence, duty to monitor, and co-fiduciary duty of liability could proceed based on allegations that Defendants allowed the Plans to pay unreasonable administrative fees, continued to include accounts with high fees but otherwise performed poorly, selected and retained investment options with high fees and poor performance relative to other available investment options, and chose and retained high-cost retail mutual funds instead of materially identical, lower-cost alternatives. 

10/5/2017
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Employee Benefits & ERISA; Faculty & Staff

Gould v. University of Miami (S.D. Fla. September 19, 2017)

Order denying Defendant’s Motion to Dismiss and directing Plaintiff to provide a more definite statement. Plaintiff, individually and seeking class representation, filed suit against the University of Miami for an alleged breach of its fiduciary duty under the Employee Retirement Income Security Act (ERISA).  Specifically, Plaintiff alleged that the University failed to provide him and similarly situated employees with ERISA plan benefits, and failed to advise  that certain plan benefits were available to “volunteer faculty” members. Concluding that Plaintiff failed to identify which ERISA and other benefit plans he and other similarly-situated persons were eligible for, the court directed Plaintiff to file a more definite statement. 

9/26/2017
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Employee Benefits & ERISA; Faculty & Staff

Sacerdote v. New York University (S.D.N.Y. Aug. 25, 2017)

Opinion and Order granting in part and denying in part New York University’s (NYU) Motion to Dismiss. Plaintiffs, individually and as the representatives of a class, filed suit alleging that NYU did not appropriately manage their pension plans in violation of the fiduciary duties of loyalty and prudence imposed on trustees under the Employee Retirement Income Security Act (ERISA). Specifically, Plaintiffs claim that NYU permitted participants to choose among imprudent investment options, allowed plan service providers to mandate that their own investment products and recordkeeping services be included, failed to remove poorly performing options, and engaged in prohibited transactions. Plaintiffs’ loyalty-based claims failed outright on account of their conclusory nature. However, the court found Plaintiffs’ allegations of recordkeeping procedural deficiencies, revenue sharing with plan providers, and failure to remove poorly performing options were sufficient to suggest potential imprudence by NYU. 

8/29/2017
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Employee Benefits & ERISA; Faculty & Staff

Hitchcock v. Cumberland University 403(b) DC Plan (6th Cir. Mar. 14, 2017)

Opinion reversing the district court’s judgment and remanding the case for further proceedings. Plaintiffs-Appellants were employees of Cumberland University and participants in the University’s defined contribution pension plan.  After enrolling in the pension plan, Cumberland amended the terms to reduce University contributions to employees’ plans. In response, Plaintiffs-Appellants filed a class action suit against Cumberland alleging wrongful denial of benefits, anti-cutback violations, breach of fiduciary duty, and failure to provide notice. The district court dismissed the first three claims for failure to exhaust administrative remedies and dismissed the final claim based on Plaintiffs’ failure to respond fully to Defendant’s Motion to Dismiss. On appeal, the Sixth Circuit found that Plaintiffs’ anti-cutback and fiduciary duty allegations were statutory claims under the Employee Retirement Income Security Act (ERISA) and therefore not subject to the exhaustion requirement. The district court also erred in finding that Plaintiffs-Appellants failed to oppose Cumberland’s argument as to the notice claim. 

3/15/2017
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