Miller Law Firm Attorneys Selected To 2011-2012 Michigan Super Lawyers and Rising Stars Lists
The Miller Law Firm is proud to announce that several of its attorneys have been named to the 2011-2012 Michigan Super Lawyers list. For the third consecutive year, E. Powell Miller has been named as one of the Top 10 lawyers in Michigan and Marc Newman has been named as one of the Top 100 lawyers in Michigan. Notably, E. Powell Miller is the youngest lawyer to be recognized in the Michigan Super Lawyers Top Ten List. Jayson E. Blake also received the honor of being named to the Michigan Super Lawyers list.
The Super Lawyers lists are created on a state-by-state basis each year, and no more than 5 percent of the attorneys in a given state are selected for this honor. Super Lawyers is a particularly prestigious recognition, as attorneys are selected “using a rigorous, multiphase process in which peer nominations and evaluations are combined with independent research.” Candidates for inclusion in Super Lawyers are evaluated based on 12 indicators of peer recognition and professional achievement, including verdicts, settlements and transactions, representative clients, experience, honors and awards, special licenses and certifications, position within law firm, bar and other professional activity, pro bono and community service, scholarly lectures and writings, education and employment background, and other outstanding achievements.
The Miller Law Firm would like to congratulate its attorneys who were named to the 2011-2012 list of Michigan Rising Stars: Brian Etzel, Martha Olijnyk, Lauren Northrop, Devon Allard, Evan Chall, Casey Fry, Emily Hughes, Adele Ice-King, Christopher Kaye and Adam Schnatz. The Rising Stars list is comprised of top attorneys who are 40 years old and younger, or who have been in practice 10 or fewer years.
To learn more about The Miller Law Firm, P.C. or any of the attorneys mentioned above, please visit our website at www.millerlawpc.com or click on the attorney name.
E. Powell Miller
Marc L. Newman
Ann L. Miller
Casey A. Fry
The Miller Law Firm, P.C.
Second Circuit Ruling Approves Investments In Employer’s Stocks By Employee Stock Plan Administrators
On October 19, 2011, the Second U.S. Circuit Court of Appeals affirmed the dismissal of two high-profile employer stock drop cases, In re Citigroup ERISA Litig., No. 07-cv-9790, 2009 WL 2762708 (S.D.N.Y. Aug. 31, 2009) and Gearren v. McGraw-Hill Cos. Inc., 690 F.Supp.2d 254, 273 (S.D.N.Y. 2010).
Employees of both Citigroup and McGraw-Hill were eligible to participate in 401(k) retirement plans offered by their respective employers. The 401(k) retirement plans included the option to invest in stock primarily of the employer. After the stock market crashed in 2008, plan participants filed class action complaints against plan sponsors (the companies) and plan administrators, investment and/or administrative committees and the boards of directors.
In both the Citigroup and McGraw-Hill District Court opinions, the respective judges held that the defendants were entitled to a presumption that their decisions to offer company stock were prudent. Further, Judge Stein in Citigroup held that the facts alleged by the plaintiffs were, if proven, inadequate to overcome this presumption. Judge Sullivan in Gearren likewise rejected the plaintiffs’ contention that the McGraw-Hill defendants had an affirmative duty to disclose information regarding McGraw-Hill’s financial position to plan participants.
In its October 19, 2011 opinion, the Second U.S. Circuit Court of Appeals adopted the standard established by Moench that courts should presume that administrators of employee stock ownership plans do not violate their fiduciary duties by investing in their employer’s stock. The Second Circuit Court of Appeals affirmed the dismissal of the participants’ consolidated class action complaints, holding that plaintiffs failed to adequately allege that McGraw-Hill and Citigroup directors and officers did not breach their fiduciary duties under the ERISA by continuing to offer company stock as an investment option in its employee retirement plans. The appellate court also held that defendants had no affirmative duty to disclose to plan participants nonpublic information regarding the expected performance of the companies’ stock, and that the complaints did not sufficiently allege that defendants, as fiduciaries, made any knowing misstatements regarding this stock.
The court determined that review of the administrators’ decisions to permit investment in employer stock should be done under an abuse of discretion standard. Joining the Third, Fifth, Sixth and Ninth Circuits, the Second Circuit adopted the “Moench presumption”. Specifically, the Moench presumption is a rebuttable presumption that administrators, by offering employer stock though an ESOP or EIAP, have complied with their fiduciary obligations under ERISA. This presumption can be overcome only by establishing that the administrator knew or should have known that the employer was in a “dire situation” that was unforeseeable by the individual em
The court noted that the presumption allows for reasonable people to disagree about whether to invest or divest from a particular company’s stock. Stock fluctuations that trend downward significantly are not enough to establish the requisite imprudence to rebut the presumption of compliance with ERISA. Furthermore, the amount of judicial scrutiny depends on the degree of discretion that the plan allows in making investments; a failure to divest is less likely to constitute an abuse of discretion when the plan requires investment in company stock.
There are still cognizable claims available after this October 19, 2011 opinion. Courts will look to how the plaintiffs plead their cases specifically with regard to the investments permitted by the plans and the administrators’ actions with respect to the plan specifications to determine whether the plaintiffs should prevail on their claims.
E. Powell Miller
Marc L. Newman
Courtney Ciullo
The Miller Law Firm, P.C.
