Skip to main content

You are here

Advertisement


Excessive Fee Suit Defendants Now Seek Sanctions Against Schlichter

Having won their case in court, the targets of a 403(b) university excessive fee suit are pressing for a federal judge to impose monetary sanctions against the six employee-plaintiffs – and the law firm of Schlichter Bogard & Denton LLP that represented them.

The suit had been brought by participants in plans of New York University (NYU) – one of the first excessive fee suits filed against university 403(b) plans. The plaintiffs alleged that NYU’s imprudence resulted in losses totaling more than $358 million to the plans, which had over $4.6 billion in combined assets – but had their case rebuffed this past July by Judge Katherine B. Forrest of the U.S. District Court for the Southern District of New York.

The NYU defendants now say that sanctions should be imposed against the employees and Schlichter for “filing a duplicative – and now a dismissed – lawsuit which Plaintiffs and their counsel filed in a blatant attempt to avoid the Court’s prior rulings,” or in the alternative, award Defendant its attorneys’ fees and costs pursuant to ERISA § 502(g)(1).

In its motion (Sacerdote v. N.Y. Univ. Sch. of Med., S.D.N.Y., No. 1:17-cv08834-KBF, defendants’ motion for sanctions 9/18/18), NYU claims that “the factors militate in favor of an award of attorney’s fees and costs to Defendant,” specifically that the improper conduct was willful and in bad faith, as evidenced by the failure to voluntarily dismiss a second filing (Sacerdote II) when requested by Defense counsel (along with a warning that NYU would seek sanctions if Plaintiffs did not withdraw that case, testimony of numerous Plaintiffs, and the addition of a jury demand in the Amended Complaint).

NYU goes on to note that, “Plaintiffs and their counsel have the ability to satisfy an award of attorney’s fees, and Plaintiffs’ law firm boasts of multi-million dollar judgments,” and that “Plaintiffs’ counsel is currently counsel for plaintiffs in no fewer than 10 copycat complaints against universities across the country.” NYU notes that, “the addition of individual defendants is currently being questioned in ERISA-based litigation against Cornell University, in which the plaintiffs are represented by the same counsel as Plaintiffs in this action,” and that “an award of fees in this action would hopefully act as a deterrent to other improper, bad faith duplicative litigation.”

Moreover, NYU noted that this same court, in dismissing the previous case, “held that Plaintiffs and their counsel improperly filed duplicative litigation in an attempt to avoid the Court’s previous rulings.”