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Compliance March 18, 2011
Employer in Stock Drop Suit Awarded $50K in Costs
March 18, 2011 (PLANSPONSOR.com) – A federal judge in Illinois has awarded the employer in a stock-drop case $50,000 in costs nearly a year after ruling against the employee filing the case.
Reported by Fred Schneyer
U.S. District Judge Joan B. Gottschall of the U.S. District Court for the Northern District of Illinois issued the decision in David E. Rogers’ 2004 suit filed under the Employee Retirement Income Security Act (ERISA) alleging Baxter International continued offering company stock in its 401(k) plan after it was no longer prudent to do so. Most of the costs awarded to Baxter and two of its executives dealt with photocopying and transcripts and video records of court proceedings; Gottschall refused to award costs for expert witness expenses and computerized research.
Gottschall ruled in May 2010 that the defendants were immunized from liability by ERISA’s Section 404(c) safe harbor provision (see Court Gives Baxter 404(c) Protection in Stock Drop Suit).
In the latest ruling, Gottschall turned away arguments by Rogers that he shouldn’t be hit with litigation costs because of an ERISA provision that generally allows such expenses only if the loser’s position was not “substantially justified.” Gottschall asserted that the prior cases interpreting the ERISA provision have dealt with attorneys’ fees and not other litigation costs.
The case is Rogers v. Baxter International Inc., N.D. Ill., 1:04-cv-06476.