The attorneys who negotiated a $28.5 million class settlement on behalf of Fidelity Investments employees challenging the company’s 401(k) plan asked a Boston federal judge to award them nearly $10.5 million in attorneys’ fees and expenses.
A fee award of one-third the settlement amount is consistent with market rates in complex Employee Retirement Income Security Act litigation, the attorneys said in a motion filed Tuesday in the U.S. District Court for the District of Massachusetts. And it’s justified by the valuable benefits obtained for class members, including a monetary award of nearly 30% of estimated damages in the case, along with forward-looking improvements to the company’s 401(k) plan, the attorneys said.
The settlement, which is expected to benefit about 41,000 participants and beneficiaries in Fidelity’s $17 billion 401(k) plan, resolves a lawsuit accusing Fidelity of filling the plan “exclusively” with Fidelity-affiliated investments that earned fees for the company. It follows Judge William G. Young’s March decision ruling that Fidelity breached its duties under ERISA in managing the plan.
Young granted preliminary approval to the deal in July, but cautioned that his approval is “allowed on the understanding that plaintiffs’ counsel will seek no more than 33% of the net settlement funds as attorney’s fees.”
The settlement is one of the larger deals negotiated in the recent series of lawsuits challenging financial companies that include affiliated investment products in their workers’ 401(k) plan. Other companies signing multimillion-dollar settlements include McKinsey & Co. ($39.5 million), SunTrust Banks Inc. ($29 million), BB&T Corp. ($24 million), and Deutsche Bank ($21.9 million).
Nichols Kaster PLLP and Block & Leviton LLP represent the plan participants. Goodwin Procter LLP represents Fidelity.
The case is Moitoso v. FMR LLC, D. Mass., No. 1:18-cv-12122, motion for attorneys’ fees 12/8/20.