On October 18, 2022, Plaintiffs filed an unopposed motion for preliminarily approval of a $2.9 million settlement agreement (“Settlement”) reached between Plaintiffs and Beth Israel Deaconess Medical Center, Inc. (a teaching hospital of Harvard Medical School) (“Beth Israel”), the Board of Directors of Beth Israel Deaconess Medical Center, and the Pension Committee of Beth Israel Deaconess Medical Center (collectively, “Defendants”).
Plaintiffs, represented by Miller Shah LLP, sued Defendants on behalf of themselves, the Beth Israel Deaconess Medical Center 401 (k) Savings and Investment Plan (the “Plan”), and other current and former participants and beneficiaries of the Plan on January 18, 2022 in the United States District Court for the District of Massachusetts. Plaintiffs alleged Defendants breached their fiduciary duties pursuant to the Employee Retirement Income Security Act of 1974 by selecting and retaining risky and underperforming investment options in the Plan and allowing Plan participants to be charged unreasonably expensive investment management fees, resulting in significant losses.
Defendants moved to dismiss Plaintiffs’ Complaint on May 13, 2022, on the basis that Plaintiffs lacked standing to bring suit and had failed to state claims upon which relief could be granted.
On July 21, 2022, while the Court’s ruling on Defendants’ motion was still pending, Plaintiffs and Defendants jointly moved to stay the proceedings in order to pursue private mediation through a reputable neutral third-party mediator in hopes of resolving the matter. Both parties acknowledged the suitability of this case for settlement through mediation, particularly considering the risks inherent in further litigation.
The parties successfully reached an agreement in principle on September 1, 2022, in which Defendants agreed to pay damages to the Settlement Class and to improve their processes for administering and managing the Plan. The parties are awaiting the Court’s preliminary approval of the proposed Settlement.
The case caption for this action is Clark, et al. v. Beth Israel Deaconess Medical Center, et al., CaseNo. 1:22-cv-10068, filed in the District of Massachusetts. Updates will be posted to this blog as the matter progresses.
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