A recent Law 360 story by Kevin Stawicki, “Attys Score $27M Payday for $80M MetLife ERISA Settlement,” reports that three law firms will walk away with $26.6 million of the $80 million deal they negotiated with Metropolitan Life Insurance Co. to end a class action claiming the company violated federal benefits law by investing policyholders' benefits in its own accounts.
U.S. District Judge Richard W. Story granted Bell & Brigham, Lober & Dobson LLC and Bondurant Mixson & Elmore LLP’s request for the fees after the parties reached the deal in July. The settlement resolved a contentious five-year battle over whether MetLife violated the Employee Retirement Income Security Act by investing the plan’s life insurance death benefits into its own accounts.
The fees were split into $25 million for one nationwide class, for which MetLife has agreed to pay $75 million, and $1.6 million in fees for a second nationwide class the company settled for an additional $5 million. While several individuals objected to the settlement, Judge Story said none hold water. “Each and every objection to the settlement is overruled with prejudice,” the judge said.
Attorneys for the classes urged the court to approve the fees in October, saying the deal was a result of nearly six years of litigation, cross-country depositions and over 76,000 pages of documents. They said the case was an uphill battle from the start after MetLife and other insurers had defeated similar suits.
“From the outset, class counsel faced the daunting task of distinguishing this case from these adverse precedents,” the attorneys said. “Through these efforts on behalf of the class, class counsel obtained favorable rulings on summary judgment and class certification that allowed them to negotiate a favorable settlement.”
Laura A. Owens and Joshua R. Smith filed the suit in 2014 on behalf of hundreds of thousands of beneficiaries who accused MetLife of violating ERISA by maintaining a practice of using so-called total control accounts to settle death benefits claims under its employee benefit plans. MetLife breached its fiduciary duties under ERISA by moving the plan's death benefits assets into the accounts, the complaint said.
After five years of litigation and "vigorous, arms-length" negotiations, MetLife agreed to pay $75 million to the nationwide class of about 120,000 beneficiaries and $5 million to another nationwide class of about 129,000 class members, according to the proposed settlement agreements filed July 25 in Georgia federal court.