Source: https://www.cov.com/en/practices-and-industries/practices/litigation-and-investigations/erisa-and-employee-benefits-litigation
Timestamp: 2019-04-26 07:19:30+00:00

Document:
With groundbreaking decisions in the U.S. Supreme Court and federal courts of appeal, we have successfully handled the spread of employee benefits litigation and contested agency proceedings, ranging from cases brought by individuals to class actions involving billions of dollars.
We have the requisite experience to represent clients in agency audits, investigations, and enforcement proceedings, and in challenges to plans’ tax-qualified status in U.S. Tax Court.
We have litigated many of the key Supreme Court and appellate cases that have shaped the law under ERISA, including Supreme Court cases establishing the role of the plan administrator, the importance of plan documents and the liability of a non-fiduciary party in interest to plan fiduciaries. We achieved the first appellate court victories upholding the cash balance formula against age discrimination claims and permitting plans to correct costly scrivener’s errors in plan documents.
For sophisticated clients such as Verizon, GE, IBM, Schering-Plough and UTC, we have successfully defended ERISA claims where the potential exposure ranged from the hundreds of millions to several billion dollars.
Our ERISA litigators work seamlessly with our highly skilled ERISA advisory practitioners who bring decades of experience dealing with Treasury and the Department of Labor, as well as a broad range of clients, on emerging issues under ERISA.
We have litigated ERISA cases throughout the country. Our ERISA litigators bring to the courtroom litigation skills developed in a range of cases, including jury trials and complex civil litigation, and we are recognized as one of the leading ERISA litigation practices in the country by both Chambers USA and Legal 500.
Defeated an effort by a class of retirees to block Verizon’s purchase of an annuity contract to settle $7.5 billion in pension liabilities.
Secured victory for Xerox in the Supreme Court on the deference owed plan administrators. Coming into the case after an adverse decision in the Second Circuit, and despite vigorous opposition from the Solicitor General, the Department of Labor, and the Internal Revenue Service, we persuaded the Supreme Court that the lower courts erred in refusing to give deference to the plan administrator's reasonable interpretation of the plan made in the course of litigation after his pre-litigation interpretation was held to be mistaken.
Obtained a court order for Verizon reforming a $1.7 billion drafting error in a pension plan formula. This was the first court order correcting a scrivener’s error in an ERISA plan.
Secured a unanimous Supreme Court decision holding that DuPont’s plan administrator “did its statutory ERISA duty” when it paid deceased worker’s retirement benefits to his ex-wife, whom he had named as beneficiary in plan documents, even though his ex-wife gave up any interest in the benefits in their divorce decree.
Won a Supreme Court victory for our client Harris Trust and secured ruling that ERISA permitted a fiduciary to sue a non-fiduciary party in interest that had participated in a prohibited transaction. Harris Trust and Sav. Bank v. Salomon Smith Barney, Inc., 530 U.S. 238 (2000).
Persuaded Third Circuit to vacate a district court's certification of a class of participants in a "stock drop" lawsuit against our client Schering Plough that alleged breach of fiduciary duty for imprudent retention of a company stock fund in a 401(k) plan. In re Schering Plough Corp. ERISA Litig., 589 F.3d 588 (3d Cir. 2009).
Resolved contentious investigations by the US Department of Labor and Internal Revenue Service, in which the government took positions that exposed our clients to many millions, and in some cases over $1 billion, of potential liability. In several of these cases, we replaced counsel that was unable to reach agreement with the government, when litigation appeared to be imminent.
Secured Second Circuit affirmance of a summary judgment ruling in favor of our client United Technologies in a 401(k) plan expense class action lawsuit, for which plaintiffs had calculated alleged damages of $230 million. Taylor v. United Technologies Corp., 354 Fed. Appx. 525 (2d Cir. 2009).
Persuaded plaintiffs to dismiss voluntarily ERISA “stock drop” claims against our client, the independent fiduciary of BNY Mellon Corp.’s employer stock fund, by filing motion to dismiss. In re Bank of New York Mellon Corp. Foreign Exch. Trans. MDL (Sansano v. Fiduciary Counselors) (S.D.N.Y. 2012).
Young v. Verizon’s Bell Atl. Cash Balance Plan, __ F. Supp. 2d __, 2009 WL 3677350 (N.D. Ill. Nov. 2, 2009). For Verizon, we secured a court order reforming a $1.7 billion drafting error in a pension plan formula. This was the first court order correcting a scrivener’s error in an ERISA plan.
Filed amicus briefs on behalf of The ERISA Industry Committee in a variety of other groundbreaking cases, including Black & Decker v. Nord, 538 U.S. 822 (2003); Lockheed Corp. v. Spink, 517 U.S. 882 (1996); Patterson v. Shumate, 504 U.S. 753 (1992); Hecker v. Deere & Co., 556 F.3d 575 (7th Cir. 2009); Langbecker v. Electronic Data Sys. Corp., 476 F.3d 299 (5th Cir. 2007); and Montesano v. Xerox Corp., 256 F. 3d 86 (2d Cir. 2001).
Represented the former CEO of IndyMac Bank in multiple securities and ERISA class actions.
Represented 21st Century Fox on a spinoff and termination of its pension plan, including the accompanying group annuity purchase.
Represented Verizon Communications on its pension plan’s $7.5 billion annuity purchase (one of the largest pension annuitization transactions in U.S. history), and successfully defended Verizon against an attempt by retirees to block the transaction in court.
Represented Fiduciary Counselors on two pension derisking transactions, each involving a transfer of over $500 million in liabilities to insurance companies.
Murphy v. Verizon Communications, Inc., et al.
Covington successfully represented Verizon in an ERISA class action case brought by three retirees claiming the transfer of their pensions to a spin-off company violated various requirements of ERISA. The Fifth Circuit granted summary judgment in favor of Verizon after discovery. When the case grew to a class action, the Fifth Circuit eventually affirmed the dismissal of all claims.
The U.S. Supreme Court held that a participant stated a colorable ERISA fiduciary breach claim for losses stemming from the alleged failure to implement investment directions for his 401(k) plan account. In a concurring opinion, Chief Justice Roberts cited our amicus brief for The ERISA Industry Committee in stating that such actions might need to be brought as benefits denial claims and subjected to exhaustion of administrative remedies.
Covington successfully represented Xerox Corporation’s pension plan in this ERISA case in which the Court held that a plan administrator’s reasonable interpretation of the plan is entitled to deference even if the administrator’s initial interpretation was erroneous.
In a unanimous decision, the Supreme Court vacated a ruling that had gone against our client Fifth Third Bancorp in an ERISA case concerning Employee Stock Ownership Plans (ESOPs). The Court held that ESOPs are subject to rules designed to weed out meritless stock-drop cases at an early stage of the litigation.
Defended claims threatened against a technology company in the US and the UK, involving alleged SOX whistleblower protections and unlawful detriment claims.
Successfully handled important ERISA litigation in the Supreme Court, including Conkright v. Frommert, 130 S. Ct. 1640 (2010) (requiring deference to the plan administrator’s interpretation of a plan, even though the administrator had previously relied on provisions that were not properly added to the plan), and Kennedy v. Plan Adm’r for Dupont Sav. & Invt. Plan, 129 S. Ct. 865 (2009) (applying ERISA’s “plan document” rule to affirm unanimously a plan administrator’s decision to follow a beneficiary designation that gave rights to a participant’s former spouse, even though a divorce decree had stated that the former spouse gave up her rights).
Taylor v. United Technologies Corp.
Taylor v. United Technologies Corp., 2009 WL 4255159 (2d Cir. Dec. 1, 2009), aff’g 2009 WL 535779, 46 Empl. Ben. Cas. (BNA) 1935 (D. Conn. Mar. 3, 2009). The Second Circuit affirmed the summary judgment entered in favor of our client United Technologies in a 401(k) plan expense class action lawsuit. The court upheld the rejection of all of plaintiffs’ claims concerning a variety of fiduciary decisions over more than a decade, for which plaintiffs had calculated alleged damages of $230 million.
In the first appellate ruling on the question of whether cash balance plans are age discriminatory, obtained the Seventh Circuit victory reversing the trial court and holding that IBM’s cash balance plan was not discriminatory. The appellate victory avoided $1.4 billion in damages. Cooper v. IBM Personal Pension Plan, 457 F.3d 636 (7th Cir. 2006).
After fully briefing motions to dismiss a suit alleging breach of fiduciary duty under ERISA with respect to the GE stock component of GE’s 401(k) plan, based on a “stock drop” theory, secured settlement that was approved by the court. Cavalieri v. Gen. Elec. Co., 47 Empl. Ben. Cas. (BNA) 2719 (N.D.N.Y. 2009).
For Verizon, in a companion case to a similar claim against Equitable, secured the first favorable ruling in the Second Circuit on claims that cash balance plans violate the age discrimination provision of ERISA. Hirt v. The Equitable Retirement Plan, 533 F.3d 102 (2d Cir. 2008).
Secured district court dismissal of ERISA notice and fiduciary breach claims against our client Verizon, arising from the spin-off of a business, on the basis of the statute of limitations. Murphy v. Verizon Commc’ns, Inc., 50 Empl. Ben. Cas. (BNA) 1855 (N.D. Tex. 2010).
Secured district court ruling dismissing a putative ERISA class action on the basis of the statute of limitations. Gelesky v. AK Steel Corp. Pensions Agmt. Plan, 828 F. Supp. 2d 935 (S.D. Ohio 2011).
Successfully defended Capital Cities/ABC, GE, the NFL, Verizon, and the Pharmaceutical Research and Manufacturers of America in separate suits against claims that independent contractors were entitled to benefits under company plans.
AT&T Overpaid Some Pensioners. Now It Wants the Money Back.

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