Miller Shah LLP Secures $8.5 Million Settlement in Safeway ERISA Suit

On July 19, 2021, U.S. District Judge Jon S. Tigar granted final approval of a proposed $8.5 million settlement (the “Settlement”) in a class action lawsuit against Safeway Inc. (“Safeway”), the Safeway Benefit Plans Committee (the “Committee”), and investment advisor Aon Hewitt Investment Consulting, Inc. (“Aon”) (collectively “Defendants”). The Settlement resolves allegations that Defendants mismanaged the Safeway 401(k) defined contribution retirement plan (the “Plan”), damaging the accounts of over 30,000 employees. The Settlement amount covers monetary relief to the class members, awards to the lead plaintiffs, and attorneys’ fees and expenses.

The lawsuit, filed in the United States District Court for the Northern District of California, was vigorously litigated for almost five years. After Plaintiffs initiated the action on behalf of Plan participants, Safeway filed a motion to dismiss the complaint, arguing: (1) that the statute of limitations on the claims had already expired; (2) that Plaintiffs failed to plausibly allege that Defendants breached their fiduciary duties to the Plan under the Employee Retirement Income Security Act (“ERISA”); and (3) that Plan participants were provided adequate information about the Plan and the risks associated with the Plan’s investment options. Aon filed a separate motion to dismiss, arguing that it could not be held liable for co-fiduciary responsibility and that Plaintiffs’ claims improperly relied on hindsight data.

On March 13, 2017, the Court denied Safeway’s motion to dismiss, explaining that because the Committee had an ongoing duty to monitor the Plan’s investments, the claims were not time-barred, and also that certain of Plaintiffs’ fiduciary duty and disclosure claims were sufficient to support the inference that the Defendants’ decision-making process was flawed. In a subsequent ruling in December 2017, the Court largely denied Aon’s motion to dismiss, holding that the scope and content of Aon’s motion invoked material questions of fact that could only be resolved through further litigation.

Following the exchange of discovery documents and lengthy negotiations in front of mediator Robert A. Myer, the parties reached an agreement-in-principle to settle the lawsuit. The Court granted preliminary approval of the Settlement on September 8, 2020, finding that the Settlement: (1) resulted from informed, extensive arm’s-length and non-collusive negotiations; (2) eliminates the risks of continued litigation; (3) does not give unduly preferential treatment to Plaintiffs or to segments of the class; (4) does not provide excessive compensation to counsel; (5) has no obvious deficiencies; and (6) falls within a range of reasonableness warranting eventual final approval.

At a final approval hearing held on April 26, 2021, the Court affirmed the reasonableness of the Settlement, attorneys’ fees of 30% of the Settlement plus an estimated $451,000 in litigation expenses, and lead plaintiff awards of $10,000 for each of the two individuals who represented class members.

Plaintiffs are represented by Miller Shah LLP; Schneider, Wallace, Cottrell, Konecky, Wotkyns LLP; Olivier Schreiber & Chao LLP; and the Law Offices of Sahag Majarian II. The case caption for this matter is Terraza v. Safeway Inc. et al., Case No. 16-cv-03994-JST, filed in the United States District Court for the Northern District of California.

The legal team at Miller Shah LLP has significant experience representing securities matters. If you have any questions regarding this subject or this post, please contact Alec Berin (ajberin@millershah.com) or Jonathan Dilger (jadilger@millershah.com). The firm can also be reached toll-free at (866) 540-5505.

Miller Shah LLP is a law firm with offices in California, Connecticut, Florida, New Jersey, New York, and Pennsylvania. The firm is an active member of Integrated Advisory Group (www.iaginternational.org), which provides clients access to excellent legal and accounting resources around the globe. For more information about the firm, please visit https://www.millershah.com.

Member IAG Global

Telephone: 866-540-5505 • Fax: 866-300-7367 | Se habla Español

California – Los Angeles Area

19712 MacArthur Boulevard, Suite 222
Irvine, CA 92612
Map and Directions

California – San Diego

1230 Columbia Street, Suite 1140
San Diego, CA 92101
Map and Directions

California – San Francisco

3 Embarcadero Center, Suite 1650
San Francisco, CA 94111
Map and Directions

Connecticut

65 Main Street
Chester, CT 06412
Map and Directions

Florida

1625 N. Commerce Pkwy, Suite 320
Fort Lauderdale, FL 33326
Map and Directions

New Jersey

2 Hudson Place, Suite 100
Hoboken, NJ 07030
Map and Directions

New York

225 Broadway, Suite 1830
New York, NY 10007
Map and Directions

Pennsylvania

1845 Walnut Street, Suite 806
Philadelphia, PA 19103
Map and Directions

Affiliate Office –  Milan, Italy