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Compliance April 20, 2023
Eversource Energy Agrees to Settle 401(k) Lawsuit for $15 Million
The settlement from a case brought in 2020 received preliminary approval from a federal judge in Connecticut.
Reported by Noah Zuss
Eversource Energy and retirement plan plaintiffs have agreed to the terms of a terms of a proposed settlement, closing for $15 million a 2020 lawsuit, Garthwait v. Eversource Energy Service Company et al., in U.S. District Court for the District of Connecticut.
U.S. District Judge Janet Hall gave preliminary approval on April 14 for the proposed class action settlement and appointed the lead plaintiffs to represent the class.
The lawsuit alleged breach of fiduciary duty to participants of the Eversource 401(k) plan under the Employee Retirement Income Security Act.
The plan for allocating the settlement would make prorated distribution of settlement proceeds based on class members’ account balances in the plan.
The settlement agreement provides payments to go to participants, former participants, beneficiaries and alternate payees of the plan guided by the plan of allocation. The payments will be made by Eversource Energy’s fiduciary liability insurer, according to Hall’s preliminary approval order.
Hall wrote that the preliminary settlement amount and the plan of allocation are “fair, reasonable and adequate.”
Eversource Agreed to Terms
Eversource Energy and attorneys for the plaintiffs—Kimberly Garthwait, Cumal Gray, Kristine Torrance and Michael Hushion—submitted a memorandum of law in support of unopposed motion for preliminary approval of class action settlement.
“The proposed settlement would provide significant and immediate benefit to the settlement class, while recognizing the complexity, risk, and delay associated with continued litigation,” the plaintiffs’ memo stated. “Indeed, the parties have confronted numerous complex and novel factual and legal issues in the litigation to date, including around class certification, theories of liability and damages, and plan participants’ Seventh Amendment right to a jury trial for certain relief sought under ERISA.”
Attorneys for the plaintiff class asked in the motion for the court to certify the settlement class as applicable to all persons who participated in the plan at any time during the class period, including beneficiaries and alternate payees and excluding the defendants and their beneficiaries. The applicable dates for the class period were not defined by Hall.
Under terms of the order and subject to final court approval, class counsel requested one-third of the gross settlement amount to pay attorney’s fees, and additional reimbursement for litigation expenses that should not exceed $500,000. The applications are subject to court approval and are consistent with amounts regularly awarded in complex litigation of this type, the attorneys for the plaintiffs stated.
The preliminary approval order and the settlement must be finalized at a forthcoming hearing that is yet to be scheduled.
“The lawsuit brought against Eversource is similar to other ERISA lawsuits over the last several years numbering in the hundreds around the country against companies of similar size,” an Eversource Energy spokesperson commented in an email. “Eversource determined it was in the best interest of the company and its employees to … resolve the lawsuit with no finding or acknowledgement that Eversource did anything wrong or otherwise acted improperly.”
The plaintiffs were represented by attorneys from the law firms Capozzi Adler, based in Harrisburg, Pennsylvania, and Miller Shah, based in New York. The defendants were represented by counsel from Steptoe & Johnson, based in Washington, D.C., and Eversource in-house attorneys.
