Labor Department Avoids Paying Fees in Failed Stock Plan Lawsuit

The Labor Department’s unsuccessful lawsuit targeting a Hawaii architectural firm’s employee stock ownership plan wasn’t so unreasonable that the department should have to pay attorneys’ fees, the Ninth Circuit ruled Wednesday.

The department’s case, which “crumbled” when the opinion of its expert witness was rejected as unreliable, was both “shoddy” and expensive to defend, the US Court of Appeals for the Ninth Circuit said. But the case wasn’t so flawed that the department wasn’t “substantially justified” in its litigation position when it went to trial, which is the standard that would allow the defendants to recover attorneys’ fees under ...