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New England Energy Provider Cannot Preclude a Jury Trial

On December 7, 2022, United States District Judge Janet C. Hall of the District of Connecticut partially denied the Motion to Strike Plaintiffs’ Jury Demand (“Motion”) filed by New England energy provider Eversource Energy Company (“Eversource”), the Board of Directors of Eversource Energy Company (“Board”), the Eversource Plan Administrative Committee (“Administrative Committee”), the Eversource Investment Management Committee (“Investment Committee,” and, with the Administrative Committee, “Committees”), and named members of the Board and the Committees (collectively, “Defendants”), finding that Defendants cannot preclude a jury trial against 11,000 former and current participants (the “Class” or “Plaintiffs”) in the Eversource 401(k) Plan (“the Plan”).

Plaintiffs sued under the Employee Retirement Income Security Act of 1974 (“ERISA”), a regulatory labor law that establishes standards of prudence and loyalty for retirement and health plan administrators to protect enrolled individuals and their beneficiaries. Under ERISA, plan administrators, trustees, and investment committees named as fiduciaries must act for the exclusive benefit of participants, choose prudent and diverse investment options to offer through a plan, and ensure that plan expenses are fair and reasonable.

Plaintiff’s Second Amended Complaint filed in October 2022 called for a trial by jury for all claims. In May 2022, the court certified the Class as participants and beneficiaries in the Plan on or after June 30, 2022. In July 2022, Defendants’ Motion for Summary Judgment and three motions to preclude expert testimony were all denied in full.

The Class, represented by Miller Shah LLP, alleged that Defendants breached their fiduciary duties under ERISA by retaining high-cost and poor-performing investment options in the Plan instead of readily available better-performing alternatives, failing to disclose the risks and expenses of those investment options, and allowing Plan participants to pay recordkeeping and administrative fees that were excessive relative to the services the Plan received and true administrative costs.

Defendants’ Memorandum of Law in Support of their Motion, filed in August 2022, argued that neither ERISA nor the Seventh Amendment provide a right to a jury trial for fiduciary breach claims. Opposing Defendants’ argument, Plaintiffs pointed out that they sought relief from Defendants’ general assets, an amount that must be determined by a jury.

In considering the Motion, the Court “examine[d] the remedy sought and determine[d] whether it is legal or equitable in nature.” The Court held that because the damages Plaintiffs requested were “the restoration of losses to the Plan—requested in [multiple] Counts—[awarded damages] would not be equitable restitution as the Defendants are not alleged to have possessed those funds.” Therefore, Judge Hall concluded that a jury could deliberate on some of Plaintiffs’ requests for relief.

The parties are currently preparing for a jury trial, which is set to begin on April 4, 2023 and estimated to last between 11 and 13 days.

The case caption for this matter is Garthwait et al. v. Eversource Energy Service Co. et al., No. 3:20-CV-00902-JCH, filed in the District of Connecticut.

The legal team at Miller Shah LLP has significant experience representing ERISA 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.

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