In May 2024, Renaker Scott LLP and co-counsel Kantor & Kantor LLP received a victory from the Ninth Circuit U.S. Court of Appeals in Bafford v. Administrative Committee of the Northrop Grumman Pension Plan., No. 22-55634, ___ F.4th ___, 2024 WL 2067884 (9th Cir. May 9, 2024). In a second appeal in this case during the last three years, the Ninth Circuit reversed the district court’s dismissal of the case, which will allow the case to proceed again in the district court.

This case was brought by participants in the Northrop Grumman Pension Plan, on behalf of themselves and a class of similarly situated individuals, against the plan administrator. Plaintiffs received grossly overstated pension statements for years, relied upon that information in planning for retirement, and then well after retiring were told that the benefits were miscalculated and their pensions would be drastically reduced. In the lawsuit, plaintiffs seek to redress the committee’s violations of ERISA’s disclosure requirements.

In this decision, the Ninth Circuit recognized the harm that occurs for employees planning for retirement when they receive inaccurate pension information. As the Ninth Circuit put it, “[u]nlike a participant who does not receive any pension benefit statement and therefore does not know their retirement benefit, a participant who receives a significantly inaccurate statement may be affirmatively misled into believing that their pension will be greater than it is and make inadvisable decisions as a result.”

You can read the Ninth Circuit’s decision here.

For more information about the Northrop pension litigation, please contact Teresa Renaker, teresa@renakerscott.com, or Kirsten Scott, kirsten@renakerscott.com.

Renaker Scott LLP and co-counsel Kantor & Kantor LLP represent two retirees of Northrop Grumman Corporation in litigation regarding the miscalculation of their pension benefits. The plaintiffs allege that during their employment, they were repeatedly misinformed about the monthly pension amount they would receive upon retirement – and they did receive the miscalculated amount for a time following their retirements. However, after they had retired, their pensions were recalculated and reduced by more than half when an error in the final average earnings used to calculate their pensions was uncovered.

Originally filed in 2018, the lawsuit has since split into two cases, one in state court and one in federal court. In the California Superior Court for Los Angeles County, the plaintiffs are pursuing state-law claims for professional negligence and negligent misrepresentation against Alight Solutions LLC, which was the outside administrator for Northrop Grumman’s pension plans from 2006 to at least April 2017. In the state court case, the plaintiffs seek damages they suffered when their pensions were reduced following years of misinformation.

In the federal suit, the plaintiffs are currently pursuing an appeal in the Ninth Circuit U.S. Court of Appeals from dismissal of a claim for violation of disclosure requirements under the Employee Retirement Income Security Act of 1974. This claim is based on the erroneous pension statements provided to the plaintiffs during their employment. The defendant on this claim is the Administrative Committee of the Northrop Grumman Pension Plan. In the federal case, the plaintiffs seek equitable relief and statutory penalties.

In both the state and federal cases, the plaintiffs seek class action status, meaning that they intend to ask the courts to allow them to proceed on behalf of similarly situated individuals – that is, Northrop pension plan participants whose benefits were overstated and then recalculated. Neither the federal nor the state court has yet decided whether to allow the case to proceed as a class action.

To read the state court complaint, click here.

To read the state court’s order denying Alight Solutions’ motion to dismiss the state court complaint, click here.

To read the plaintiffs’ opening brief in the federal appeal, click here.

For more information about the Northrop pension litigation, please contact Teresa Renaker, teresa@renakerscott.com, or Kirsten Scott, kirsten@renakerscott.com.

Effective July 11, 2022, Renaker Hasselman Scott LLP has changed its name to Renaker Scott LLP. This change is due to our former partner, Margo Hasselman Greenough, stepping back from the practice of law. We will miss working with Margo and wish her all the best.

At Renaker Scott LLP, partners Teresa Renaker and Kirsten Scott continue to provide advice, negotiation, and litigation services to employees and retirees with matters involving employee benefit plans. We also represent individuals transitioning into or out of jobs and evaluating options for medical leaves of absence. We look forward to continuing to work with you.

Teresa Renaker and Kirsten Scott were selected to the SuperLawyers list of top employee benefits lawyers in Northern California. Teresa Renaker was additionally selected to the SuperLawyers lists of Top 100 Lawyers in Northern California and Top 50 Women Lawyers in Northern California.

All three Renaker Hasselman Scott partners have been selected to the 2021 Northern California Super Lawyers list in the Employee Benefits category. Margo Hasselman Greenough and Teresa Renaker also appear on the list of Top 50 Women Northern California Super Lawyers, and Teresa Renaker also appears on the list of Top 100 Northern California Super Lawyers.

The United States District Court for the District of Alaska reconsidered its prior dismissal of state-law claims for professional negligence and negligent misrepresentation in Mabry v. ConocoPhillips Co., in which Renaker Hasselman Scott represents the plaintiff. In Mabry, the plaintiff alleges that the Plan Administrator of the ConocoPhillips Retirement Plan and its outside third-party administrator, Alight Solutions LLC, overstated his pension benefit for many years before his retirement. On July 6, 2021, the Court ordered that Mr. Mabry’s state-law claims can go forward based on the Ninth Circuit’s recent decision in Bafford v. Northrop Grumman Corp., which holds that such claims are not preempted by ERISA when brought against a non-fiduciary service provider to an ERISA plan.

Read the order here.

In Farah v. Emirates, Renaker Hasselman Scott LLP, Risman & Risman, P.C., and Brustein Law PLLC represent a proposed class of former employees of Emirates airlines who were laid off without severance pay in 2020. In their complaint, filed in the United States District Court for the Southern District of New York on July 6, 2021, the plaintiffs allege that Emirates has an ERISA-governed severance plan that requires it to pay benefits of up to 26 weeks’ pay plus subsidized COBRA coverage to employees terminated without cause, but that Emirates has refused to honor this obligation to U.S. employees laid off in 2020. The plaintiffs also allege that Emirates failed to comply with other requirements of ERISA in administering the severance plan, including the requirement to provide a summary plan description. In addition to violations of ERISA, the complaint alleges violations of the New York State Worker Adjustment and Retraining Notification Act (NY WARN Act), Title VII of the Civil Rights Act of 1964, and the New York State Human Rights Law and New York City Human Rights Law.

For more information on this case, please contact Kirsten Scott, kirsten@renakerhasselman.com.user.s408.sureserver.com, or Teresa Renaker, teresa@renakerhasselman.com.user.s408.sureserver.com.

Read the complaint here.

On June 28, 2021, the United States Secretary of Labor filed an amicus curiae brief in support of reconsideration of a portion of the Ninth Circuit Court of Appeals’ decision in Bafford v. Northrop Grumman Corp., in which Renaker Hasselman Scott represents the Plaintiffs/Appellants along with co-counsel Kantor & Kantor LLP. The Bafford plaintiffs’ claims arise from overstatements of their pension benefits that were communicated to them for many years before their retirements, and that continued even after they began receiving their pensions.

In Bafford, the Ninth Circuit reversed the dismissal of the plaintiffs’ claims against the Administrative Committee of the Northrop Grumman Pension Plan for violations of ERISA Section 105, which requires that an ERISA plan administrator provide pension benefit statements, and against Alight Solutions LLC for professional negligence and negligent misrepresentation under California state law. However, the Ninth Circuit upheld the dismissal of the plaintiffs’ claims against the Administrative Committee for breach of fiduciary duty under ERISA. The Ninth Circuit based its decision on an Interpretive Bulletin issued by the Department of Labor in 1975.

The Bafford plaintiffs seek rehearing as to the dismissal of their breach of fiduciary duty claim. The Secretary of Labor’s brief supports this request, arguing that the Ninth Circuit panel’s decision on this point “rests on a fundamental misconception of fiduciary status under ERISA and the Department of Labor’s interpretive bulletin.”

Read the Secretary’s brief here.

Read the Bafford opinion here.

Kirsten Scott will speak on a panel at the virtual midwinter meeting of the American Bar Association Section of Labor and Employment Law’s Employee Benefits Committee on February 5, 2021. Ms. Scott’s topic will be “ERISA Civil Procedure Update.” On March 18, 2021, Teresa Renaker will address the Orange County chapter of the Western Pension and Benefits Council, providing recommendations from a plaintiffs’ lawyer’s perspective for employee benefits plan sponsors.