Washington University in St. Louis and a group of workers who say they got a bad deal from the school’s retirement plan will argue their case today before the Eighth Circuit.
The arguments come as the litigation series against elite college retirement plans enters its third year, with six settlements, one appeals court decision, and one trial under its belt.
The 20 lawsuits—which target Yale University, New York University, Massachusetts Institute of Technology, and others—claim the schools’ retirement plans charge excessive fees and offer too many bad investments. The retirement benefits of at least 470,000 people, along with more than $64 billion dollars in plan assets, are at stake.
With today’s arguments, the U.S. Court of Appeals for the Eighth Circuit will become the third federal appeals court to hear arguments on the merits of these cases. With several of the pending lawsuits heading toward resolution and the possibility of a trip to the U.S. Supreme Court on the horizon, here’s a look at where the three-year litigation push stands.
One Appellate Ruling, Five on Ice
The Third Circuit in May became the first federal appeals court to wade into these cases, handing a loss to the University of Pennsylvania. The court partially revived the case against Penn—which a federal judge dismissed entirely in 2017—after finding the Penn workers plausibly alleged that the school didn’t prudently manage administrative fees or address the plan’s costly and duplicative investment options.
Penn has announced plans to appeal this decision to the U.S. Supreme Court.
The next ruling may come from the Seventh Circuit, which heard arguments in a case against Northwestern University in May. Northwestern won at the district court level, and the AARP, the Pension Rights Center, the American Benefits Council, and the U.S. Chamber of Commerce have jumped into the appeal by filing supporting briefs.
The D.C. Circuit has been asked to hear two university retirement plan cases against Georgetown University and George Washington University. Both schools won at the district court level. The Georgetown appeal centers on whether the workers missed a court-imposed deadline, and the George Washington case asks whether the case is blocked by a release agreement.
In the Washington University case, the Eighth Circuit has been asked to address the merits of the workers’ lawsuit.
$50 Million in Settlements...So Far
Six schools have signed settlement agreements that together total more than $49 million.
The University of Chicago was the first school to strike a deal, signing a $6.5 million settlement in 2018, several months after a federal judge declined to dismiss the case.
Most recently, MIT announced its settlement Sept. 12, four days before the case was scheduled to go trial. Details of the settlement, including the dollar value, aren’t yet public.
One Trial, Lots of Controversy
The Second Circuit is also hearing a university retirement plan appeal involving New York University.
NYU workers want the appeals court to undo a decision by a former judge in the Southern District of New York. Judge Katherine B. Forrest ruled for NYU on all claims after an eight-day trial in 2018. Forrest identified some deficiencies in how NYU managed its retirement plans, but said the workers failed to show that the school acted imprudently under the Employee Retirement Income Security Act or that the plans suffered losses as a result.
The NYU workers asked for a new trial after Judge Forrest left the bench to rejoin Cravath Swaine & Moore LLP shortly after deciding their case. Forrest’s decision may have been tainted by her talks with Cravath, because another firm partner is a member of NYU’s board of trustees, the employees argued.
A different judge from the Southern District of New York rejected this argument and declined to schedule a new trial. The NYU workers have appealed this decision to the Second Circuit, as well.
Six schools are still duking it out with employees in district court after early rulings in those cases favored the employees.
Judges have certified class actions against Emory, Columbia, Cornell, and Yale, and the parties have engaged in discovery. Both Columbia and Cornell have filed motions asking that their cases be resolved without trial.
The cases involving Princeton University and the University of Southern California are ongoing after the schools failed to win early dismissal. USC spent more than two years trying to have the case against it sent to arbitration, ultimately losing the issue in the Ninth Circuit and failing to obtain relief in the U.S. Supreme Court.