On January 31, 2023, the Honorable Edmund A. Sargus, Jr. of the United States District Court for the Southern District of Ohio granted final approval of a $2.75 million settlement (“Settlement”) in a class action lawsuit against L Brands, Inc. (“L Brands”), the former parent company of Victoria’s Secret, as well as L Brand Service Company LLC and the Retirement Plan Committee of the L Brands, Inc. 401(k) Savings and Retirement Plan (collectively, “Defendants”).
The action was originally brought by Donna Allison (“Plaintiff”) pursuant to the Employee Retirement Income Security Act of 1974 (“ERISA”) in November 2020. The settlement resolves allegations that Defendants breached the fiduciary duties they owed under ERISA to the L Brands, Inc. 401(k) Savings and Retirement Plan (“Plan”) and its more than 30,000 participants and beneficiaries by allowing the Plan to incur unreasonable administrative expenses, as well as by retaining high-cost investments instead of offering more prudent readily available alternatives.
In February 2021, Defendants filed two motions to dismiss the complaint, one claiming Plaintiff lacked jurisdiction to bring her claims under Federal Rule of Civil Procedure 12(b)(1) (“12(b)(1) Motion”) and the other arguing Plaintiff failed to state a claim upon which relief could be granted under Federal Rule of Civil Procedure 12(b)(6) (“12(b)(6) Motion”). In the 12(b)(1) Motion, Defendants argued that a Separation Agreement Plaintiff signed upon leaving L Brands precluded her claims and, therefore, mandated dismissal. In the 12(b)(6) Motion, Defendants asserted that Plaintiff failed to demonstrate that the administrative fees the Plan paid were objectively unreasonable, noting that the Plan offered “a reasonable array of investment alternatives,” allowing Plan participants to choose the level of fees they paid.
On September 6, 2021, the Court denied both motions to dismiss, holding (1) that the Separation Agreement Plaintiff signed was narrow in scope and did not include any general release language that would preclude her from bringing claims under ERISA, and (2) that Plaintiff sufficiently stated a claim because her allegations concerned the Plan’s aggregate investment management fees, not merely the fees from just one fund offered in the Plan.
Following the Court’s ruling, the parties entered into discovery. On February 4, 2022, the parties filed a joint motion to stay proceedings pending mediation in an effort to resolve the suit and avoid further litigation expenses. On May 3, 2022, the parties participated in a mediation session with a neutral third-party mediator and reached an agreement in principle to resolve the action. The Parties continued to negotiate the terms of the Settlement over the following months, and Plaintiff filed an unopposed Motion for Preliminary Approval of Class Action Settlement on August 11, 2022. The Court granted preliminary approval of the Settlement on September 20, 2022.
In granting final approval, the Court confirmed that the amount of the Settlement is “fair, reasonable, and adequate, taking into account the costs, risks, and delay of trial and appeal.” Out of the $2.75 million Settlement, Class Counsel was awarded 33% of the total Settlement, and Plaintiff was awarded $8,750.00 for her time and efforts representing the Class.
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