General Electric 401(k) Lawsuits Poised for Law Firm Battle

Posted December 6th, 2017.

As It Appeared On

By Jacklyn Wille

General Electric Co. is trying to streamline the recent flood of litigation over its retirement plan fees, but at least one plaintiffs’ law firm is promising to put up a fight.

GE Dec. 4 asked a judge to transfer a proposed class action over its $28.5 billion 401(k) to a federal court in Massachusetts, where three similar lawsuits have been filed in the past six weeks. Sanford Heisler Sharp LLP, the law firm that brought the first lawsuit against GE in a California federal court, responded the same day by asking for the Massachusetts cases to be transferred to California.

“It is a truth, universally acknowledged in our federal court system, that—absent special circumstances—’in all cases of concurrent jurisdiction, the Court which first has possession of the subject must decide it,’” the firm wrote in its request to change courts, quoting both the U.S. Supreme Court and Jane Austen’s “Pride and Prejudice.”

Each lawsuit accuses GE of filling its 401(k) plan with affiliated mutual funds that drained workers’ retirement savings while earning hundreds of millions of dollars for a subsidiary company that GE eventually sold to State Street in 2016. Dozens of companies have been hit with similar allegations in recent years, and judges have allowed cases to move forward against American Century, Insperity, Edward Jones, BB&T, Allianz, and Franklin Templeton.

As class actions filed under the Employee Retirement Income Security Act have picked up in recent years—more than 130 were filed in 2016, representing a big jump from previous years, according to a Bloomberg Law analysis—plaintiffs’ law firms have increasingly targeted the same defendants. Companies that have been sued by multiple law firms over similar alleged ERISA violations include Wells Fargo, Target Corp., Sears Holding Corp., JPMorgan, DST Systems Inc., Columbia University, Washington University, several hospitals, and parties related to Allergan Plc and L-3 Communications.

In the cases against GE, the company says the litigation belongs in Massachusetts because that’s where the company is headquartered and where relevant documents and witnesses are located. Sanford Heisler, which calls the Massachusetts cases “copycat actions,” says that its choice of court is entitled to deference and that GE’s headquarters were located in Connecticut, not Massachusetts, when the relevant actions took place.

“ERISA cases take an enormous amount of work on the front-end before a claim is ever filed,” Leigh Anne St. Charles, an associate in Sanford Heisler’s Nashville office, told Bloomberg Law. “The problem becomes, why go through nearly a year of complex investigation when you know a month later a rush of virtually identical complaints will be filed in another forum? Keeping the original case in the original forum solves this problem in part by discouraging copycat litigation, which in turn encourages plaintiffs and their firms to keep investigating and bringing claims that challenge abusive practices.”

Attorneys for the plan participants who sued in Massachusetts didn’t respond to requests for comment. A GE spokeswoman declined to comment on the litigation but said the company intended to “fully defend” the case.

GE is represented by Goodwin Procter LLP. The plan participants litigating in Massachusetts are variously represented by Squitieri & Fearon LLP, Hutchings Barsamian Mandelcorn LLP, Block & Leviton LLP, Robbins Geller Rudman & Dowd LLP, and Shapiro Haber & Urmy LLP.

The cases are: Haskins v. Gen. Elec. Co. , S.D. Cal., No. 3:17-cv-01960-CAB-BLM, motion to transfer venue 12/4/17 ; Sullivan v. Gen. Elec. Co. , D. Mass., No. 1:17-cv-12123-DJC, motion to intervene and transfer venue 12/4/17 ; LaTorre v. Gen. Elec. Co. , D. Mass., No. 1:17-cv-12267-DJC, motion to intervene and transfer venue 12/4/17 ; Powell v. Gen. Elec. Co., D. Mass., No. 1:17-cv-12139, consolidated with Sullivan action 11/20/17.

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