Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca8-16-01127/USCOURTS-ca8-16-01127-0/pdf.json

Nature of Suit Code: 791
Nature of Suit: Employee Retirement Income Security Act (ERISA)
Cause of Action: 

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United States Court of Appeals

For the Eighth Circuit

___________________________

No. 15-2792

___________________________

Ronald C. Tussey; Charles E. Fisher; Timothy Pinnell

lllllllllllllllllllllPlaintiffs - Appellants

v.

ABB, Inc.; John W. Cutler, Jr.; Pension Review Committee of ABB, Inc.; Pension

& Thrift Management Group of ABB, Inc.; Employee Benefits Committee of

ABB, Inc.

lllllllllllllllllllllDefendants - Appellees

Fidelity Management Trust Company; Fidelity Management & Research Company

lllllllllllllllllllllDefendants

------------------------------

American Association of Retired Persons

lllllllllllllllllllllAmicus on Behalf of Appellants

Securities Industry and Financial Markets Association

lllllllllllllllllllllAmicus on Behalf of Appellees

Appellate Case: 16-1127 Page: 1 Date Filed: 03/09/2017 Entry ID: 4510253 
___________________________

No. 16-1127

___________________________

Ronald C. Tussey; Charles E. Fisher; Timothy Pinnell

lllllllllllllllllllllPlaintiffs - Appellees

v.

ABB, Inc.; John W. Cutler, Jr.; Pension Review Committee of ABB, Inc.; Pension

& Thrift Management Group of ABB, Inc.; Employee Benefits Committee of

ABB, Inc.

lllllllllllllllllllllDefendants - Appellants

Fidelity Management Trust Company; Fidelity Management & Research Company

lllllllllllllllllllllDefendants

____________

Appeals from United States District Court 

for the Western District of Missouri - Jefferson City

____________

Submitted: September 21, 2016

Filed: March 9, 2017

____________

Before RILEY, Chief Judge, MURPHY and SMITH, Circuit Judges.

____________

RILEY, Chief Judge.

A class of employees who participated in ABB, Inc.’s retirement

plans—“401(k) defined contribution savings plans,” to be precise, see generally

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26 U.S.C. § 401(k)—accuse ABB and its agents (collectively, the ABB fiduciaries)

of managing the plans for their own benefit, rather than the participants’. In an earlier

appeal, we directed the district court to “reevaluate” how the participants might have

been injured if the ABB fiduciaries breached their fiduciary duties under the

Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. §§ 1001, et

seq., when they changed the investment options for the plans. See Tussey v. ABB,

Inc., 746 F.3d 327, 338 (8th Cir. 2014). Because the district court apparentlymistook

that direction for a definitive ruling on how to measure plan losses, and as a result

entered judgment in favor ofthe ABB fiduciaries despite finding they did breach their

duties, we vacate the judgment on that claim and remand for further consideration

regarding whether the participants can prove losses to the plans. Because we thus

reopen one of the participants’ substantive claims, we also vacate and remand the

district court’s award of attorney fees.

I. BACKGROUND1

The plans offered participants a menu of options for investing the money in

their accounts. In 2000, ABB’s Pension Review Committee adopted a written policy 2

statement describing “the underlying philosophy and process for the selection,

monitoring and evaluation and, if necessary, removal of investment options.” The

policy statement said the plans would offer investmentsin three “tiers,” organized by

how much active involvement they demanded from investors. The first tier, meant

“[f]or participants unwilling or unable to make a personal asset allocation decision,”

was to “offer several ‘managed allocation’ funds designed to offer the participant a

Our prior opinion recountsthe facts of the case more completely. See Tussey,

1

746 F.3d at 330-33. Here, we focus on what is relevant to this appeal.

We accept the parties’ representations that the differences between the two 2

plans at issue—one for ABB’s unionized employees, one for the others—are

irrelevant here.

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professionally managed, well diversified fund or funds appropriate for the

participants’ [sic] investment goals.”

John Cutler, Jr., the director of the committee’s staff, thought those “‘managed

allocation’” funds should be “target-date” or “life-cycle” funds, which dynamically

change their mix of investments to become more conservative as a specified date

(such as an employee’s expected retirement) approaches. Cutler favored the Fidelity

Freedom Funds, a family of funds with target dates at ten-year intervals from 2000

to 2040. Cutler also suggested removing the Vanguard Wellington Fund, an

established fund that invested in stocks and bonds in a generally static ratio. The

committee agreed on both points. Removing the Wellington Fund raised the question

of what to do with the money participants had invested in it—roughly $123 million,

representing about 8.4% of the total assetsin the plans. The ABB fiduciaries decided

to move the money into the Freedom Funds, a process called “mapping” assets from

one investment to another. Participants whose money was mapped to a Freedom

Fund remained free to choose a different investment option (or options) at any time,

but the mapping decision made the Freedom Funds the default for anyone who had

been invested in the Wellington Fund and did not take affirmative steps to do

something else with their money.

In 2006, the participants sued the ABB fiduciaries and two Fidelity

companies—the recordkeeper forthe plans and the investment advisor for the Fidelity

mutual funds included in the plans—under ERISA. See 29 U.S.C. §§ 1109,

1132(a)(2) (fiduciary liability and cause of action). After a bench trial, the district

court found both sets of defendants “breached some fiduciary duties that they owed

to the . . . Plans.” See id. § 1104(a)(1) (fiduciary duties). In particular, the district

court found the ABB fiduciaries breached their fiduciary duties by (1) deciding

effectively to replace the Wellington Fund with the Freedom Funds based on selfinterest rather than what was best for the plans, (2) failing to properly monitor and

control recordkeeping costs, and (3) agreeing to make the plans overpay for Fidelity’s

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services in return for Fidelity charging ABB less for corporate services it bought for

itself. The Fidelity defendants were liable as well, according to the district court,

because interest earned when money in the process of being added to or taken out of

plan investments wasinvested overnight—called “float income”—should have been

credited to the plans, not back to the investments. The district court awarded the

participants $21.8 million against the ABB fiduciaries for swapping the Wellington

and Freedom Funds, $13.4 million for the ABB fiduciaries’ other breaches, and $1.7

million against the Fidelity defendants on the float claim, plus attorney fees of $12.9

million from all the defendants jointly and severally, see id. § 1132(g)(1) (attorney

fees).

The defendants appealed. We vacated the finding of breach for changing the

investment options, explaining the district court should have affordedmore deference

to the discretion the plans explicitly granted the ABB fiduciaries. See Tussey, 746

F.3d at 338. Because the issue could be relevant again on remand—if the district

court still found a breach after a properly deferential review—we added that, “[a]s

calculated,” the original award for switching the funds was “speculative and

exceed[ed] the ‘losses to the plan[s] resulting from’ any fiduciary breach.” Id. at 338

n.7, 339 (quoting 29 U.S.C. § 1109(a)). The district court had calculated the plans’

losses by comparing the returns on the Freedom Funds to what the participants would

have earned if they had invested in the Wellington Fund instead. We suggested “it

seems the participants’ mapping damages, if any, would bemore accuratelymeasured

by comparing the difference between the performance of the Freedom Funds and the

minimum return of the subset of managed allocation funds the ABB fiduciaries could

have chosen without breaching their fiduciary obligations.” Id. at 339. We affirmed

the ABB fiduciaries’ liability on the other claims, reversed the judgment against the

Fidelity defendants, and vacated the fee award—now only against the ABB

fiduciaries—so the district court could account for the resolution of the remanded

issue. See id. at 336-37, 340-41.

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On remand, the district court again held the ABB fiduciaries breached their

fiduciary duties. Yet the district court concluded the participants had failed to prove

any losses under the theory we “tacitly approved” in the first appeal—comparing the

Freedom Funds’ returns to the worst-performing of the funds the ABB fiduciaries

could have properly chosen—so the ABB fiduciaries nonetheless prevailed on that

claim. In light of that result, the district court reduced the participants’ attorney fee 3

award for work through trial by almost $2.2 million, to $10,768,474. The district

court also awarded the participants $900,000 for work on the appeal—just over twothirds of what they requested—for a total of $11,668,474. The participants appeal the

district court’s ruling on measuring losses and liability for the breach. In a

consolidated cross-appeal, the ABB fiduciaries argue both parts of the fee award are

still too high. See 28 U.S.C. § 1291 (appellate jurisdiction).

II. DISCUSSION

A. Liability

We start with the ABB fiduciaries’ assertion, presented as an alternative ground

for affirming the district court’s judgment on the merits, that they did not actually

breach their fiduciary duties, so there is no need to reach the issue of how much the

plans lost. Whether the ABB fiduciaries’ actions constituted a breach is a legal

question we must answer de novo. See, e.g., Tussey, 746 F.3d at 333. But what they

did, and why, are factual matters on which we accept the district court’s findings

unless they are clearly wrong. See, e.g., id.; Herman v. Mercantile Bank, N.A., 137

F.3d 584, 586 (8th Cir. 1998); see also Fed. R. Civ. P. 52(a)(6).

The heart of the ruling on remand was the district court’s conclusion that “the

removal of the Wellington Fund from the . . . platform and the mapping of its assets

At the end of its order, the district court reassured the participants that “[i]f the

3

Court has misread the Eighth Circuit, its decision . . . can be corrected on appeal.” 

Thus, here we are.

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to the Freedom Funds . . . was motivated in large part to benefit Fidelity Trust and

ABB, not the Plan participants.” The ABB fiduciaries insist that determination was

the product of speculation, unfounded inferences, and the fallacy of “equat[ing] the

effect of a decision with its purpose.” To the contrary, strong evidence supported the

district court’s finding, notably the fact that Cutler—the director of the Pension

Review Committee’s staff—and ABB’s director of employee benefits openly

communicated with Fidelity about the “pricing implications” of changes to the plans’

investment lineup and the specific dollar amounts by which Fidelity would cut its fees

“if the Wellington money map[ped]/default[ed] to the Freedom Funds.”

The ABB fiduciaries stress that there was a great deal of other evidence too,

and some of it showed them acting against Fidelity’s interests in various ways. For

instance, the ABB fiduciaries dropped other lucrative Fidelity funds from the plans

and mapped their assets to non-Fidelity options. However, their examples all relate

to other investment decisions, not the Wellington-Freedom swap. The fact the ABB

fiduciaries apparently did not always favor Fidelity as much as they could, or seize

every opportunity to send Fidelity more of the participants’ money, does little to

undermine the district court’s finding about why they made the particular decisions

at issue in this case. That is all the more true given that we know conclusively the

ABB fiduciaries, in still other contexts, did “fail[] to monitor and control [Fidelity’s]

recordkeeping fees” and did “pay[] [Fidelity] excessive revenue sharing from Plan

assets.” Tussey, 746 F.3d at 336.

In addition to the direct evidence of meetings about “pricing implications,” the

district court’s finding was based on what it saw as “circumstantial evidence” of the

ABB fiduciaries’ motives. The ABB fiduciaries take issue with the district court’s

approach, which they say once again failed to afford proper deference to their choices

“in implementing the redesign and evaluating and selecting Plan investment options

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in accordance with the Plan.” Id. at 338. According to the ABB fiduciaries, the

4

district court was wrong to focus on perceived flaws in the ABB fiduciaries’ decisionmaking process, such as not considering other possible replacements for the

Wellington Fund and giving an explanation for mapping the assets from the

Wellington Fund to the FreedomFunds thatseemingly conflicted with the reason they

had given for dropping the Wellington Fund, because the ABB fiduciaries had

discretion over such things. The ABB fiduciaries overstate the deference they are

owed.

“[A] Plan administrator deserves discretion to the extent its ex ante investment

choices were reasonable given what it knew at the time.” Id. When the district court

considered the circumstances of how the ABB fiduciaries decided to swap the funds,

it was not second-guessing whether their decision was reasonable. Nor was it

naysaying their underlying determination of the appropriate procedure to use to make

such a decision. Rather, the district court was observing that the ABB fiduciaries’

actions—discretionary or not—when taken together and viewed in context, shed light

on their motivations. In particular, those actions tended to suggest the ABB

fiduciaries did what they did not because they thought it was best for the plans, but

The ABB fiduciaries, along with the Securities Industry and Financial Markets 4

Association (SIFMA) as amicus curiae, also point out that some parts of the district

court’s reasoning suggest it took a dim view of target-date funds in general, relative

to more traditional funds like Wellington, perhaps based on hindsight bias and a

failure to appreciate the differences between the two kinds of products. We agree that

simply comparing upfront costs or looking back at the funds’ earnings after the fact

would not have been a valid way to determine whether choosing the Freedom Funds

over Wellington was prudent. But the district court explicitly recognized that “[t]he

relative performance of the Freedom Funds and the Wellington Fund is only relevant

to determine whether a loss was sustained by the Plan,” not whether there was a

breach in the first place, and that “a non-conflicted fiduciary could have chosen the

Freedom Funds,” so we are satisfied any misunderstanding did not affect the district

court’s findings.

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because they wanted to get a better deal for themselves. As the district court

explained, “there [were] too many coincidences to make the beneficial outcome for

ABB serendipitous, particularly considering the powerful draw of self-interest when

transactions are occurring out of sight and are unlikely to ever be discovered.” A

fiduciary can abuse its discretion and breach its duties by acting on improper motives,

even if one acting for the right reasons might have ended up in the same place. Cf. 5

Metro. Life Ins. Co. v. Glenn, 554 U.S. 105, 117 (2008); id. at 123 (Roberts, C.J.,

concurring in part and concurring in the judgment); id. at 131 (Scalia, J., dissenting).

Because the choice of whose intereststo favor, the plans’ or their own, was not

one over which the ABB fiduciaries could claim any discretion, cf. 29 U.S.C.

§ 1104(a) (“[A] fiduciary shall discharge his duties with respect to a plan solely in the

interest of the participants and beneficiaries.” (emphasis added)); Tussey, 746 F.3d

at 333-35, there was no place for deference in the district court’s factfinding on their

motives. There was no clear error in that factfinding either, so we will not disturb the

district court’s determination that “but for its conflict ofinterest, ABB would not have

made the same decisions.” And we see no reason to reject the legal conclusion the

district court drew from that fact—the ABB fiduciaries abused their discretion and

breached their fiduciary duties.

That brings us back to the question which prompted this appeal: how to

determine what that breach cost the plans? We answer de novo, because the method

for measuring losses, as distinct from the calculation itself, is a legal issue, see id. at

338-39, as is the explication of our previous decisions.

Such a breach might not be actionable, if it truly did not change the result and

5

thus did not cause any harm, but that is a separate question. See Roth v. SawyerCleator Lumber Co., 16 F.3d 915, 919 (8th Cir. 1994).

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What we said on this point was:

On remand, the district court should reevaluate its method of

calculating the damage award, if any, for the participants’ investment

selection and mapping claims. First, the district court awarded the

amount that participants who had invested in the Wellington Fund

presumably would have had if (1) ABB had not replaced the Wellington

Fund with the Freedom Funds, and (2) the participants remained

invested in the Wellington Fund for the entire period at issue. In light

of the [policy statement’s] requirement to add a managed allocation

fund, itseemsthe participants’ mapping damages, if any, would be more

accurately measured by comparing the difference between the

performance of the Freedom Funds and the minimum return of the

subset of managed allocation funds the ABB fiduciaries could have

chosen without breaching their fiduciary obligations.

Second, the district court determined “it [was] a reasonable

inference that participants who invested in the Freedom Funds would

have invested in the Wellington Fund had it not been removed from the

Plan’s investment platform.” Such an inference appears to ignore the

investment provisions ofthe [policy statement], participant choice under

the Plan, and the popularity of managed allocation funds. And the

participants fail to cite any evidentiary support for inferring the

participants’ voluntary, post-mapping investmentsin the FreedomFunds

would have instead been made in the Wellington Fund, even if that fund

remained as a Plan option for all of the years at issue. A reasonable

inference is one which may be drawn from the evidence without resort

to speculation. As calculated, the $21.8 million damage award for the

participants’ mapping claim is speculative and exceeds the losses to the

plan resulting from any fiduciary breach.

Id. (second alteration in original) (emphasis added) (footnote, quotation marks, and

citations omitted). According to the ABB fiduciaries, the italicized language was a

“binding alternative holding,” and thus became the “law of the case,” because it was

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necessary to give the district court a standard to apply on remand. We think that 6

gives the highlighted language too much weight.

To be sure, we did clearly rule that the original award was wrong “[a]s

calculated.” Id. at 339. At the same time, we left open exactly how it should be

fixed. We suggested two points in the district court’s explanation that “seem[ed]” or

“appear[ed]” to be mistaken, but we did so in tentative, qualifying terms, rather than

the firm, definite language we used for our holdings (the award “is speculative and

exceeds” the plans’ losses, and the district court “should reevaluate” its

methodology). Id. at 338-39 (emphasis added). Properly read, the passage at issue

7

proposed an alternative we thought warranted consideration (if measuring the plans’

losses became necessary again on remand), it did not require that the district court

adopt our proffered approach. That is why our overarching instruction to the district

court was to “reevaluate its method of calculating the damage award.” Id. at 338. 

With that phrasing, we meant to make clear both that there was

work—“reevaluat[ion]”—left for the district court to do and the work involved

resolving the “method of calculating” losses, not just their ultimate amount. Such a

directive would have made little sense if, as the ABB fiduciaries assert, all we meant

The ABB fiduciaries also invoke the rules that one panel of this court cannot

6

overrule another, see, e.g., Maxfield v. Cintas Corp., No. 2, 487 F.3d 1132, 1135 (8th

Cir. 2007), and that the district court must strictly obey our mandate, see, e.g., Bethea

v. Levi Strauss & Co., 916 F.2d 453, 456 (8th Cir. 1990). Those theories boil down

to the same thing as the “law of the case” argument, namely an insistence that our

statement amounted to a definitive ruling on how to measure losses from the breach.

The ABB fiduciaries urge us to disregard this contrast in phrasing because in 7

1899 another court of appeals considered itself bound by a statement of law in a

Supreme Court decision even though it contained the words “it would seem.” See

Anderson v. Reid, 14 App. D.C. 54, 81-82 (D.C. Cir. 1899). We do not mean to

suggest such qualifications automatically render any statement to which they are

attached nonbinding. Yet they are not always superfluities either. Like any other

words in a judicial proclamation, they must be read and understood in context.

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for the district court to do was carry out the calculations under an approach we had

dictated on appeal.

The district court therefore should have considered other ways of measuring

the plans’ losses from the ABB fiduciaries’ breach, as well as the participants’

contentions about why, in their view, our proposal was misguided and contradicted

persuasive authority and the trust-law principles that generally inform ERISA

decisions, cf., e.g., Donovan v. Bierwirth, 754 F.2d 1049, 1056 (2d Cir. 1985)

(“Where several alternative investment strategies were equally plausible, the court

should presume that the funds would have been used in the most profitable of these. 

The burden of proving that the funds would have earned less than that amount is on

the fiduciaries found to be in breach of their duty.”). We leave to the district court’s

discretion whether and how to expand the record and hear additional argument from

the parties on thisissue. Although this case arguably illustratesthe dangers ofsaying

more than we need to, we add two observations to inform the analysis on remand.

First, the district court treated our reference to measuring the Freedom Funds

against “the subset of managed allocation funds the ABB fiduciaries could have

chosen,” Tussey, 746 F.3d at 339, as limiting the comparison to “alternative target[-

date] fund[s].” That reading is echoed in the ABB fiduciaries’ claim on appeal that

“this Court determined that the performance of the Freedom family had to be

measured against a dynamic ‘managed allocation’ alternative.” It is unclear where

the ABB fiduciaries find the requirement of a “dynamic” comparator—we certainly

did not use that word. See id. And we see no basis for reading such a restriction into

the phrase “managed allocation funds,” either in our opinion or in the investment

policy statement we took it from. According to the minutes of the meetings where the

changes to the investment options were considered, both times Cutler briefed the

Pension Review Committee about managed allocation funds he “not[ed] that there

were two types: static and dynamic.” So while dynamic target-date funds are one

kind of managed allocation fund, they are not the only one. Indeed, absent other

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evidence of a more limited technical definition, as a matter of plain meaning the

Wellington Fund itself would appear to be a static managed allocation fund—a

portfolio manager actively monitors how its assets are allocated, keeping the overall

mix of investments roughly constant but selecting the stocks, bonds, and other

securities it holds at any given time.

Second, it is a mistake to argue, as the ABB fiduciaries and SIFMA do, that

measuring any portion of the losses by comparing the returns from the Freedom

Funds with what the plans would have earned from the Wellington Fund is

necessarily inappropriate because it involves “an apples-to-oranges comparison.” 

True, the funds are designed for different purposes and thus choose their investments

differently, so there is no reason to expect them to make similar returns over any

given span of time. But the point of the comparison here would just be to determine,

as a factual matter, the effect of owning one fund rather than the other. The reason

for any difference in returns would be immaterial.

8

This is not to say we are sure a comparison with the returns on the Wellington

Fund must be part of measuring what the ABB fiduciaries’ breach cost the plans, just

that we are unpersuaded by these two arguments against it and do not want them to

unduly occupy the parties and the district court on remand. The measure and amount

of the plans’ losses remain for the district court to resolve. See generally Martin v.

Feilen, 965 F.2d 660, 671-72 (8th Cir. 1992) (insisting the district court perform its

“function ‘to fashion the remedy best suited to the harm’” even though the plaintiff

had “presented only an unsound . . . damage theory,” and explaining “the measure of

By the same logic, making the comparison would not imply a (mistaken) view 8

that whichever fund earned more over the relevant time frame “should” have been

offered to the participants, or even that it performed “better” in a meaningful sense. 

Not only can good bets go bust and bad bets hit the jackpot, but some investments are

simplymeant to pay off lessthan others, in return for lower risks, different exposures,

or countless other considerations.

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such damages need not be exact—‘it will be enough if the evidence show [sic] the

extent of the damages as a matter of just and reasonable inference, although the result

be only approximate’” (first quoting Garnatz v. Stifel, Nicolaus & Co., 559 F.2d

1357, 1360 (8th Cir. 1977); and then quoting Story Parchment Co. v. Paterson

Parchment Paper Co., 282 U.S. 555, 563 (1931))).

B. Attorney Fees

In light of that disposition, we again vacate the award of attorney fees and

remand for the district court to adjust the award as appropriate if the participants

ultimately prevail on the liability issue. What happens on remand cannot change the

9

outcome of the first appeal. Therefore, we need not wait to review the portion of the

fee award corresponding to appellate work. The ABB fiduciaries urge us to conduct

this analysis de novo. There is no reason for deference to the district court’s

determinations, they explain, because the district court had no particular familiarity

with what happened on appeal—if any court has special insight into the work

involved, it is ours. We note the district court is still significantly more experienced

than we are when it comes to analyzing and awarding attorney fees as a general

matter, even if it did not see this part of the litigation firsthand. Questions of relative

expertise notwithstanding, our case law is certain that when a district court’s fee

award is for work on appeal, “we review its amount for abuse of discretion.” Little

Rock Sch. Dist. v. Arkansas, 127 F.3d 693, 697 (8th Cir. 1997).

The main justification the ABB fiduciaries give for reducing the fee award is

that it was based on hourly rates the district court drew from another large ERISA

case involving the same plaintiffs’ law firm, Abbot v. Lockheed Martin Corp., No.

06-cv-701, 2015 WL 4398475 (S.D. Ill. July 17, 2015), which the ABB fiduciaries

We dismiss as moot the participants’ motion to strike a portion of the ABB 9

fiduciaries’ reply brief, because the challenged passages concern an issue we do not

reach.

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say were too high. They emphasize that the fee request in the other case was

unopposed—the case had settled, the award was to come out of the settlement pot,

and there was no meaningful objection fromthe plaintiffs’ class—and the amountwas

initially set as a percentage of the total recovery, with the hourly rates serving only

as a check on the product of that calculation. See id. at *1-3. Wherever the rates

originally came from, a federal judge, relying on the findings of a special master,

reviewed them and specifically concluded they were “reasonable and consistent with

market rates.” Id. at *3-4. The ABB fiduciaries do not counter the participants’

showing with any contrary evidence affirmatively suggesting the rates are excessive,

consequently, we are satisfied the district court’s use of them was not an abuse of

discretion.

The ABB fiduciaries also emphasize the participants’ lawyers won on only one

issue (out of three) before this court and accuse them of spending too much time on

the appeal. The district court acknowledged both points and reduced the amount it

calculated based on the hourly rates by about a third to account for them. We cannot

say it was an abuse of discretion not to reduce it further.

Finally, we agree with the ABB fiduciaries that we can review and correct the

incentive awards the district court ordered for the three named plaintiffs. The

awards—$25,000 each—should be paid out of the class recovery, not by the ABB

fiduciaries on top of the other amounts they owe. This might well be the result the

district court intended—it is what the district court ordered in its original award,

which its order on remand claimed to be simply “reaffirm[ing]” on this point. And

it makes sense. Incentive awards compensate lead plaintiffs for their work and the

benefit they have conveyed on the rest of the class. See, e.g., Koenig v. U.S. Bank

Nat’l Ass’n, ND (In re US Bancorp Litig.), 291 F.3d 1035, 1038 (8th Cir. 2002). 

There is no sound reason to make defendants pay for these awards.

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III. CONCLUSION

The district court did not err in deciding that the ABB fiduciaries abused their

discretion and breached their fiduciary duties by acting on improper motives when

they replaced the Wellington Fund with the Freedom Funds asinvestment options for

the plans. But the district court should have decided for itself how to measure what

the plans lost as a result, rather than considering itself bound by our prior comments

on the issue. That question is still for the district court to answer in the first instance,

so the judgment in favor of the ABB fiduciaries is at best premature. We therefore

vacate the judgment, vacate the award of attorney fees and costs, and remand the case

for further proceedings.

______________________________

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