On June 29, 2023, Yale New Haven Hospital (“Yale”) agreed to certify a class of over 26,000 current and former participants of the Yale-New Haven Hospital and Tax Exempt Affiliates Tax Sheltered Annuity Plan (the “Plan”) in a lawsuit against Yale-New Haven Hospital, Inc., the Board Of Trustees of Yale-New Haven Hospital, Inc., the System Investment Committee of Yale New Haven Health Service Corp. and System Affiliates, and the Retirement Committee Of Yale New Haven Health Services Corp. and System Affiliates (collectively, “Defendants”).
The Plan is a defined contribution 403(b) retirement plan governed by the Employee Retirement Income Security Act of 1974 (“ERISA”), a federal statute establishing fiduciary standards for plan administrators to ensure that investments offered to employees are prudently selected and monitored.
Former employees Kaity Ruilova and Eileen Brannigan (together, “Plaintiffs”) filed suit on behalf of the Plan and its participants on January 21, 2022, alleging that Defendants violated ERISA by allowing the Plan to incur recordkeeping and administrative fees significantly higher than the average fees paid by similarly sized plans, and by offering and retaining underperforming investment options unsuitable for participants in the Plan.
With assets totaling approximately $1.7 billion, the Plan is in the top 0.1% of all defined contribution plans in the country by size. According to Plaintiffs, large plans like the Plan have substantial leverage to negotiate for lower fees and expenses for recordkeeping and administrative services, which are charged against plan participants’ investments.
Previously, in a March 1, 2023 ruling on Defendants’ motion to dismiss, the Honorable Michael P. Shea of the United States District Court for the District of Connecticut dismissed Plaintiffs’ investment claims but sustained their recordkeeping claims, finding Plaintiffs’ allegations sufficient to support an inference that Defendants’ choice to retain Fidelity as the recordkeeping service provider “was the result of an imprudent process and outside of the range of reasonable judgments a fiduciary may make.”
Subsequently, Plaintiffs and Defendants jointly stipulated to certify the lawsuit as a class action. In the proposed stipulation, the parties agreed that the proposed class satisfied each of the four principal requirements of class actions: numerosity, commonality, typicality, and adequacy of representation.
The stipulation defines the Class as “All participants and beneficiaries in the Yale-New Haven Hospital and Tax Exempt Affiliates Tax Sheltered Annuity Plan at any time on or after January 21, 2016 and continuing to the date of judgment, or such earlier date that the Court determines is appropriate and just (the “Class Period”), including any beneficiary of a deceased person who was a participant in the Plan at any time during the Class Period.”
Plaintiffs, the Class, and the Plan are represented by Miller Shah LLP and Capozzi Adler, P.C.
Updates will be posted to this blog as the matter progresses. The case caption for the lawsuit is Ruilova et al. v. Yale-New Haven Hospital Inc. et al., case number 3:22-cv-00111, filed in the U.S. District Court for the District of Connecticut.
The legal team at Miller Shah LLP has extensive experience representing class action and ERISA matters. If you have any questions regarding this subject or this post, please contact Alec Berin (firstname.lastname@example.org) or Jonathan Dilger (email@example.com). The firm can also be reached toll-free at (866) 540-5505.
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