Cigna to Pay $32.3M in Fees in 17-Year Old Pension Case

Nov. 29, 2018, 8:54 PM

Cigna Corp. must pay $32.3 million to counsel representing workers accusing the insurer of making certain misrepresentations when it converted its pension plan to a cash balance plan in 1998.

The fee award—17.5 percent of the relief received by workers, currently valued at $184 million—comes 17 years after the workers sued Cigna in federal court in Connecticut.

Class counsel “vigorously litigated” the case from the district court through the U.S. Supreme Court, expending over 12,000 hours, Judge Janet Bond Arterton held Nov. 29.

A 2011 supreme court decision upheldthe order that allowed the plan reformation to remedy the false or misleading information provided by Cigna. It also allowed other remedies, including equitable estoppel and surcharge.

The fee is reasonable in relation to the value of the total monetary recovery, which the parties significantly disputed, Arterton said. Cigna argued that the present value calculation was $184 million in relief to the class; the class calculated its recovery at $280.6 million.

The class consisted of 27,549 members, of which only four objected to the fee request. Arterton rejected the objectors’ request that Cigna pay the fee award on top of the common fund recovery.

Counsel will also recover $513,927 in litigation expenses from Cigna. That amount won’t be deducted from the common fund, Arterton said.

Arterton also granted $240,000 in incentive fee awards for class representatives and witnesses, to be paid from the fee award.

The Law Offices of Stephen R. Bruce represents the workers. Morgan Lewis & Bockius LLP, and Robinson & Cole represent Cigna.

The case is Amara v. Cigna Cop., 2018 BL 439238, D. Conn., No. 3:01-cv-02361-JBA, 11/29/18.

To contact the reporter on this story: Carmen Castro-Pagan in Washington at ccastro-pagan@bloomberglaw.com

To contact the editors responsible for this story: Jo-el J. Meyer at jmeyer@bloomberglaw.com; Nicholas Datlowe at ndatlowe@bloomberglaw.com

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