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USC Settles Retirement Plan Class Action on Eve of Trial (1)

Jan. 25, 2023, 10:20 AMUpdated: Jan. 25, 2023, 2:17 PM

The University of Southern California struck a tentative deal to settle a six-year-old lawsuit challenging its retirement plan management shortly before the 30,000-person class action was scheduled to go to trial.

The court order, filed Tuesday in the US District Court for the Central District of California, comes the same day the case was set to begin a six-day, non-jury trial before Judge Virginia A. Phillips.

Phillips gave the parties 30 days to file their settlement for court approval. She also canceled a status conference scheduled for Wednesday morning at the request of the parties.

The lawsuit claims USC’s retirement plan charges unreasonable administrative fees, offers underperforming and expensive investment options, and is mismanaged by conflicted third-party service providers.

In 2019, Phillips allowed portions of the case to advance and certified it as a class action. She previously denied USC’s motion to send the dispute to arbitration and saw that decision affirmed on appeal.

The parties attempted to resolve the dispute through private mediation in 2022, but they failed to reach a settlement.

USC is one of more than 20 prominent universities to be accused of retirement plan mismanagement since 2016. These cases have spawned about $125 million in settlements, one trial, four major appeals court rulings, and a recent US Supreme Court decision reviving claims against Northwestern University.

USC is represented by Gibson, Dunn & Crutcher LLP. The plan participants are represented by Schlichter Bogard & Denton LLP and Steven M. Goldsobel of Los Angeles.

The case is Munro v. Univ. of S. Calif., C.D. Cal., No. 2:16-cv-06191, settlement notice 1/24/23.

(Updates story to note deadline for seeking settlement approval in third paragraph)

To contact the reporter on this story: Jacklyn Wille in Washington at jwille@bloomberglaw.com

To contact the editors responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com; Patrick L. Gregory at pgregory@bloomberglaw.com; Carmen Castro-Pagán at ccastro-pagan@bloomberglaw.com