In a last vestige of the landmark Supreme Court case Tibble v. Edison International decided last year, two Edison International executives had a lawsuit dismissed that claimed ERISA malfeasance for offering workers Edison stock in the company’s 401(k) plan.
The case, Wilson v. Edison Int’l Inc. , C.D. Cal., No. 2:15-cv-09139-JAK-PJW, 7/6/16, was filed on behalf of a proposed class of more than 20,000 Edison workers, and accused the company’s chief executive officer and vice president of violating federal benefits law by keeping artificially inflated Edison stock in the 401(k) plan.
“A federal judge dismissed the lawsuit July 6, finding that the workers failed to sufficiently identify what the executives should have done differently in this specific circumstance,” according to Bloomberg BNA.
“The decision by Judge John A. Kronstadt of the U.S. District Court for the Central District of California is noteworthy for its application of recent pronouncements from the U.S. Supreme Court about how judges should evaluate lawsuits challenging drops in stock price under the Employee Retirement Income Security Act. The Supreme Court opined on this topic in both 2014 and 2016 by creating new pleading standards for workers bringing these types of cases,” the news service notes.
“While we’re disappointed that the court granted defendants’ motion, we’re heartened by its decision to give us leave to re-plead and to provide us with such useful guidance about how to articulate these claims to the court’s satisfaction,” Samuel Bonderoff, an attorney with Zamansky LLC who represents the Edison workers, told Bloomberg BNA.
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
