Being an ERISA litigator isn\u2019t as easy as one may think. For class action lawsuits, you\u2019re fronting money with the hopes of getting a large settlement in a class action. You\u2019re pushing novel legal theories and sometimes, the court pushes back.<\/p>\n\n\n\n
A U.S. District Court judge in Denver sanctioned Jerry Schlicter\u2019s law firm Schlichter Bogard & Denton $1.5 million for \u201crecklessly\u201d pursuing claims in a shareholder derivative lawsuit against Great-West.<\/p>\n\n\n\n
That lawsuit alleged that fees charged by Great-West via its Empower Retirement record-keeping business violated the Investment Company Act\u2019s section that prohibits fees \u201cso disproportionately large that (they) bear no reasonable relationship to the services rendered and could not have been the product of arm\u2019s length bargaining.\u201d<\/p>\n\n\n\n
Judge Arguello threw out that case and hit Schlicter\u2019s firm with sanctions because she said the plaintiffs relied entirely on the opinions of one expert that both the court and defendants had warned were factually inaccurate. Despite that, Schlicter\u2019s firm and plaintiffs went to trial relying solely on this expert as the only means of calculating damages suffered. According to Judge Arguello, the witness was \u201cthoroughly discredited\u201d on the witness stand.<\/p>\n\n\n\n
I am not a litigator, but I know that sanctions asked by one party aren\u2019t usually approved by the Judge based on the view that each party should bear its legal costs. Schlicter\u2019s firm must have irritated the Judge so much with a case she thought was frivolous, that she wanted to send a message on how trivial she thought this case was. Of course, expect Schlicter\u2019s firm to appeal.<\/p>\n\n\n\n
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