Collusive litigation is always a worry, as in name a class, get it through, and then sell out the class. Is this an instance of a greatly inadequate settlement amount?
More than 350,000 current and former employees at UnitedHealth Group have been sent notices about a proposed $69 million settlement in a class action lawsuit alleging workers lost millions in investment returns because the company offered low-performing 401(k) plan options from Wells Fargo.
The settlement notices, which were sent by email or regular mail as of March 24, say a federal judge in Minneapolis will decide during a fairness hearing on June 12 whether to grant the settlement final approval.
Each class member’s proportional share of the net settlement proceeds will be based in part on the balance they invested in certain Wells Fargo Target Date Funds at any time since April 23, 2015, according to a website with settlement details.
“Plaintiff filed a class action complaint … alleging that [UnitedHealth Group] violated ERISA’s fiduciary duties of prudence and loyalty,” according to the settlement notice, which used the abbreviation for the Employee Retirement Income Security Act. “Defendants deny all of the claims made in the complaint [and] deny all allegations of wrongdoing.”
Wells Fargo sold off its asset management business years ago.
[...] Judge John Tunheim of the U.S. District Court of Minnesota substantially denied UnitedHealth Group’s motion for summary judgement in the case in March 2024. In his ruling, Tunheim wrote that “a reasonable trier of fact could easily find” the lead plaintiff caught the company “with its hand in the cookie jar.”
The parties announced the $69 million settlement in December.
The fairness hearing is scheduled for June 12 at 10 a.m. at the federal courthouse in Minneapolis.
During the hearing, attorneys representing the class will seek an award of legal fees not to exceed one-third of the $69 million settlement plus their out-of-pocket costs. Legal fees, administrative costs and a proposed incentive award up to $100,000 for the lead plaintiff will reduce total settlement funds available to class members.
Class members don’t need to do anything to receive payment, according to the settlement notice, nor do they need to attend the hearing. Those objecting to the settlement, however, must notify the court and attorneys in writing by May 29 and may speak during the June hearing if they wish.
The calculator says $69,000,000 / 350,000 gives under $200 on average, and that's if attorney fees are $0. It gets lessened while the plaintiffs' law firm makes a killing.
Is the class being sold out? Is UnitedHealth happy to cap the cost and not take a risk of a substantially bigger hit after losing summary judgment; instead not risking a jury award?
Could be.
Would you do anything, if in the class, with those numbers, or shrug and say the lawyers did okay for themselves, and UnitedHealth got off cheap but it's not worth a fight for what, possibly another fifty bucks?
There is cause up front to opt out of class actions and preserve individual rights to sue, but wtf, let it move on without any cost to you then take the pittance and move on? Myself, I'd protest and say take it to trial, get a jury, and roll the dice. You hardly can do worse than two hundred bucks on average.
__________UPDATE________
You look at the lifetime of a 401k and $200 bucks against annual numbers here and here, and a chief/indians difference seems striking. However, in one of those items it is Brian Thompson under discussion, and he cashed in but only until he duly got "Luigied." Win a few, lose a few.
Hate the bastards! And go with Bernie and AOC the crowds they attract and their push to get Medicare for All. It's the only sane thing out there if we can move it past Dem donor money against it, into serious debate, then over the finish line.
Big if. But what's the option?