Sonnenschein Nath & Rosenthal LLP has one of the best-known and best-regarded ERISA practices in the country. Its wide-ranging experience in all aspects of employee benefits and executive compensation law includes handling significant and complex ERISA litigation on behalf of plan sponsors, fiduciaries, third-party administrators, insurance companies and other clients in both class action and individual matters. We have successfully represented scores of clients in health care and other benefit plan claims matters, successfully defended numerous lawsuits brought by trustees of multi-employer pension plans against employers and have represented various sides of employee benefit plan issues in a number of Chapter 11 cases, including that of United Airlines, in which we serve as counsel for the creditors’ committee. Lawyers in our Employee Benefits and Executive Compensation Group also have extensive experience in the area of the fiduciary responsibility rules of ERISA. Our work is in both federal and state courts across the country and includes successful representation in one of the most significant ERISA cases before the U.S. Supreme Court in the last decade.
In Mertens v. Hewitt Associates, 508 U.S. 248 (1993), we successfully argued on behalf of Hewitt Associates that ERISA does not authorize money damage actions against non-fiduciary service providers such as actuaries, accountants and lawyers who are alleged to have participated knowingly in a breach of fiduciary duty under ERISA.
We also represent numerous clients in connection with controversies before the Internal Revenue Service (IRS), the U.S. Department of Labor (DOL) and the Pension Benefit Guaranty Corporation. We counsel plan sponsors and committees, institutional and individual trustees and other clients regarding prohibited transactions, related excise tax issues and various ERISA fiduciary standards and issues. Recently, Sonnenschein successfully represented the fiduciary of a leveraged ESOP in an alleged fiduciary breach case involving multi-million dollar claims by the IRS and other claims by the Department of Labor that resulted in a full concession by the IRS and an avoidance of any claims by the Labor Department.
We represent Prudential in a putative nationwide class action raising both ERISA and other claims against a variety of defendants involving an employee welfare benefit plan marketed generally to smaller or mid-size companies or professional associations, such as law firms, with highly compensated employees. In that case, we have briefed opposition to a motion for class certification, have successfully obtained a ruling that our client is not an ERISA fiduciary and have moved against cross-claims brought by the ERISA fiduciary defendants.
Also on behalf of Prudential, we served as coordinating counsel in nearly 150 personnel cases, including 12 successful trials and appeals; many of those cases involved ERISA claims, including retaliatory denial of benefits claims and claims on portions of the plans themselves.
We represented Towers Perrin Company in a putative class action alleging Towers Perrin was a fiduciary under an American Airlines retirement plan and that as a fiduciary it had made actionable misrepresentations to alleged plan participants. After successful rulings by the Fifth Circuit Court of Appeals, Towers Perrin was dismissed from the case with prejudice.
In other class action work, we represented Allstate Corporation in a case in federal court in Illinois brought by several hundred employees who alleged that the company misled them into retiring in order to avoid paying pension and other benefits. Our motion to dismiss resulted in the dismissal of two out of three counts of the complaint.
Other benefit plan litigation clients have included General Motors Corporation, Seabourn Cruise Line, Snap-on Incorporated and SAP America; these cases involved the denial of short- and long-term disability benefits and the denial of health benefits. We represented MetLife in several ERISA benefit claims disputes in federal court in Illinois and also have represented Aetna USHealthcare and Monsanto in ERISA litigation. We represented both Belo Corporation and fiduciaries under The Williams Companies 401(k) plan in connection with alleged “stock drop” cases where sponsor stock was owned in the sponsor’s 401(k) plan. We have worked on ERISA matters on behalf of Eoff and Touch America involving failed investments by an ESOP and KSOP in company stock. In another success, we received a summary judgment on behalf of Duke Engineering on an ERISA disability claim.
Sonnenschein represented Monsanto Company in defense of a suit arising out of nonqualified benefits obligations that had been transferred during the spin-off of Solutia, Inc. in 1997. Plaintiffs were former Monsanto employees who had gone to Solutia during the spin-off and who had ceased to receive benefit payments after Solutia filed for bankruptcy. We worked closely with actuaries to understand and articulate the special programs implemented during the conversion of the nonqualified pension plan to a cash balance plan, the effects of changing limits on benefits and contributions under the tax code on nonqualified plans, the nonratable accrual of nonqualified benefits, and to submit a framework for calculating damages consistent with plan designs. While the court eventually held for plaintiffs, it relied primarily on the defense calculation and found total damages to be approximately $1.7 million less than plaintiffs claimed at trial.
We defended an ERISA Plan and related persons and entities set up by Bernard D. Bergreen against an action brought by a former employee seeking increased pension benefits and other damages. The plaintiff alleged that he had been wrongfully discharged for asserting his rights under the Plan, in violation of ERISA, and also claimed that he had not received the full pension benefit to which he was entitled because various Plan amendments, which allegedly reduced his benefit amount, were invalid under ERISA. We obtained dismissal of some causes of action at the pleading stage and, at trial in federal court in New York, the matter was settled following a court-ordered, post-trial mediation. We also helped represent Mr. Bergreen in a DOL investigation arising out of the same allegations.
We successfully represented U.S. News & World Report’s 401(k) Plan and its participants of ERISA, securities and RICO claims against Crestar Bank arising out of the decline in value of Crestar-sponsored real estate funds and Crestar’s freeze on participants’ rights to withdraw from the funds. The case settled, with Crestar paying $19.8 million, 100 percent of the amount sought in the complaint. We successfully represented Burroughs Wellcome in ERISA and securities claims against Phoenix Mutual in a lawsuit arising out of a set of facts virtually identical to those of the Crestar case. That matter settled for close to the full amount sought in the complaint, which was $28 million.
Our lawyers currently represent the Trustees of the United Mine Workers of America (UMWA) Combined Benefit Fund in litigation involving coal companies’ obligations under a federal statute—the Coal Industry Retiree Health Benefit Act of 1992—to fund health care benefits for 100,000 retired coal miners and their dependents. The UMWA Combined Benefit Fund is an employee welfare benefit plan and a multi-employer plan under ERISA. The litigation involves issues concerning the Trustees’ fiduciary obligations under ERISA and matters of civil enforcement under ERISA. In addition to five cases we are litigating on behalf of the Trustees in federal district and appellate courts, we consult regularly with the Trustees and the General Counsel of the UMWA Health and Retirement Funds on matters pertaining to the Trustees’ fiduciary obligations and pursuit of delinquent premiums from the contributing coal companies.
We have long counseled highly compensated executives, including negotiating their sophisticated employment contracts and litigating their claims when negotiations fail, including a case involving substantial ERISA matters brought by Larry “Chip” Brown against Sonance pending in federal court in California. Sonnenschein represented former executives of a publicly held company on severance and employment claims, resulting in a recovery after trial of more than $30 million. Our lawyers also recently settled a large executive compensation litigation case against Aon.
In other executive compensation matters, we served as lead counsel for a Fortune 500 company in a jury trial in Platte County, Mo., involving a claim by 18 former executives for partial-year bonuses under an executive annual bonus program. Plaintiffs were executives with a group of subsidiaries divested by our client during the fiscal year and consequently did not receive bonuses under a longstanding policy of paying only those executives present on the last day of the fiscal year. We successfully obtained directed verdicts on a number of the plaintiffs’ claims, including their claims for fraud and for recovery of punitive damages, and in so doing eliminated claims for millions of dollars relating to “promises” of bonuses to the executives. We obtained a defense verdict on three of the 18 plaintiffs, and the verdict in favor of the remaining 15 was substantially below the recovery sought by the plaintiffs, as well as significantly below our last offer of settlement.
In employee benefit and executive compensation work arising out of our bankruptcy and restructuring representation, we provided a comprehensive review of the KERP, SERP and certain executive compensation contracts at United Airlines, including extensive work on the contract of Glenn Tilton, Chair and CEO of United. We also are involved in the analysis of various defined benefit plans at United covering more than 65,000 union and management employees. We have extensively litigated in the bankruptcy of Federal Mogul, for which we serve as counsel to the creditors’ committee, as well as in the bankruptcies of Philip Services Corp., Fruit of the Loom and others.
We represented Sam Gerson and Mone “Jim” Anathan, the two top executives of Filene’s Basement, in connection with their disputed claims in Filene’s bankruptcy case in Boston; in addition, we represented David Siegel in his separation as CEO of US Airways as well as an Einstein Bros. Bagels executive in its bankruptcy case.
A number of our lawyers are Certified Public Accountants and several, before joining Sonnenschein, served as lawyers for such federal agencies as the IRS, where one represented the agency in a case against the Central Conference of Teamsters involving the sale of an airplane to its pension fund.
Our lawyers also are active in a number of leading professional organizations, including the prestigious American College of Employee Benefit Counsel, the American Bar Association Taxation Section and its Employee Benefits Committee. They are national speakers and authors on subjects ranging from nonqualified deferred compensation and executive compensation to employee stock ownership plans and post retirement medical benefits.
We represented the Teamsters’ Central States, Southeast and Southwest Areas Pension Fund in employer withdrawal liability litigation under the Multiemployer Pension Plan Amendments Act of 1980 (MPPAA), obtaining a district court judgment overturning an arbitrator's decision in favor of the employer and instead confirming the calculation made by the Fund; which was affirmed by the Seventh Circuit. CenTra, Inc. v. Central States, Southeast and Southwest Areas Pension Fund, 585 F. Supp. 2d 1017 (N.D. Ill. 2008); aff’d., 578 F.3d 592 (7th Cir. 2009).
