A recent Law 360 story by Alexis Shanes, “Fidelity Workers’ Attys Get $9M Cut of 401K Settlement,” reports that a Boston federal court approved $9 million in fees for the attorneys who helped current and former Fidelity Investments employees secure a $28.5 million settlement in their suit accusing the company of loading its workers' 401(k) plans with costly, proprietary investment options. 

In addition to granting the request by attorneys from Nichols Kaster PLLP and Block & Leviton LLP for a one-third cut of the settlement, U.S. District Judge William Young greenlighted $1.4 million in litigation expenses and $115,000 in settlement administration expenses.  The court also approved service awards of $10,000 each for lead plaintiffs Kevin Moitoso, Tim Lewis, Mary Lee Torline and Sheryl Arndt.  The four plaintiffs represented a class of roughly 41,000 current and former Fidelity workers.

In a December motion for fees, the attorneys said they had logged 7,862 hours working on the case.  In that time, they said, they developed the original complaint and amended it four times; reviewed or produced more than 180,000 pages of documents; and deposed a dozen witnesses.

"There is no question that class counsel devoted significant time and effort to this case," the attorneys said in the fee bid.  "Plaintiffs litigated this case vigorously, pursuing the case up to one month before trial was set to begin.  "This court and other courts have approved one-third fee awards in cases at far earlier stages of litigation," they added.

The parties struck the deal in July, after Judge Young set the suit up for trial with a March case stated order, an alternative to cross-motions for summary judgment that allowed the court to draw inferences and reach a decision based on undisputed facts in the case.  The order found Fidelity liable for failing to monitor proprietary mutual funds in the workers' 401(k) plan.  The parties had requested the case stated procedure after filing dueling summary judgment motions in September 2019.

The Fidelity workers sued under the Employee Retirement Income Security Act in October 2018, alleging Fidelity Management & Research Co., FMR LLC and four related entities had loaded their retirement plans with costly investment options that burdened plan participants.  The Fidelity retirement plan had roughly $15 billion in assets by the end of 2016, according to the complaint, ranking it among the top 20 such plans in the nation.