MINNEAPOLIS, March 13, 2024 (GLOBE NEWSWIRE) -- Judge John Tunheim of the U.S. District Court for the District of Minnesota has substantially denied UnitedHealth Group’s Motion for Summary Judgment in the case of Kim Snyder v. UnitedHealth. In its Opinion, the Court holds, “Because a reasonable trier of fact could easily find that Plaintiff Kim Snyder caught Defendant UnitedHealth Group, Inc. with its hand in the cookie jar, the Court will substantially deny United ’s motion for summary judgment.”
In August 2023, United asked the Court to grant summary judgment on all of Plaintiff’s claims, arguing that United had prudently and loyally administered the 401(k) Plan. In opposing summary judgment, Sanford Heisler Sharp, among other things, introduced compelling evidence that raises doubt about United’s motivation for retaining the Plan’s multi-billion-dollar investment in the Wells Fargo Target Fund Suite. According to Plaintiff’s Opposition, when United’s Investment Committee advised United’s CFO, John Rex, that Wells was on the cusp of removal, Rex injected United’s business interests into the decision and sought data on United’s “balance of trade” with the target date fund firms under consideration for the Plan’s business. As one Wells executive recounted: “John Rex said that given what he thought was a growing relationship, he ‘stepped in front of the freight train’ last fall to save their [United’s] $5bn AUM [assets under management] business from leaving Wells.”
In its Opinion, the Court cited to this evidence of “balance of trade” data and statements from CFO Rex about jumping in front of a freight train as examples of “more direct evidence that United was motivated by its own interests over the Plan participants’.” In assessing Plaintiff’s claim of fiduciary disloyalty, the Court’s Opinion notes that “[r]ather than taking steps to shield the Committee’s decisions from bias, it inserted a member who was apparently the most conflicted of all and reduced procedural checks.”
The Court also noted the impact of disloyalty in denying United’s motion for summary judgment as to the duty of prudence, holding that “it is difficult to imagine how the process would be a prudent one if tainted by influences other than the Plan’s best interests.”
“We are satisfied that the Court, in its detailed and comprehensive Opinion, acknowledged that UnitedHealth seems to have injected its business interests into the fiduciary decision-making process,” said Charles Field, Partner, Sanford Heisler Sharp and class counsel.
“This Opinion sends a strong message that retirement plan fiduciaries cannot run “headfirst” into conflicts of interest and escape the consequences, regardless of their position in the company,” said Leigh Anne St. Charles, Partner, Sanford Heisler Sharp and class counsel. “We look forward to the opportunity to present this case at trial.”
The Court held that “this case will be placed on the Court calendar’s next available trial date.”
BACKGROUND
In April 2021, Sanford Heisler Sharp filed a class action lawsuit under the Employee Retirement Income Security Act of 1974 (“ERISA”) on behalf of over 150,000 individuals who were invested in the Wells Fargo Target Fund Suite through the UnitedHealth Group 401(k) Savings Plan. The Complaint had alleged that United had breached its duty of loyalty and prudence in retaining the Wells Frago Target Date Suite, one of the worst-performing target date options in the entire market. In October 2022 the Court certified the case as a class action.
Plaintiff’s allegations included a detailed chronology of UnitedHealth’s decision-making behind closed doors, including the role played by UnitedHealth’s CFO, John Rex. Plaintiff further alleged Wells Fargo was a critical customer and financier for UnitedHealth, and UnitedHealth’s executive leadership personally intervened to keep the Wells Fargo Target Fund Suite on UnitedHealth’s 401(k) Plan to garner favor with, and benefit, Wells Fargo.
About Sanford Heisler Sharp
Sanford Heisler Sharp is a public interest and civil rights law firm with offices in New York, Washington, DC, San Francisco, Palo Alto, Baltimore, Nashville, and San Diego. The firm focuses on employment discrimination, Title IX, wage and hour, whistleblower and qui tam, criminal/sexual violence, financial services, and Asian American litigation and finance matters. Our lawyers have recovered over $1 billion for our clients through many verdicts and settlements.
Sanford Heisler Sharp was class counsel in the recently approved $61 million settlement in the General Electric ERISA class action.
In 2022, The National Law Journal named Sanford Heisler Sharp Civil Rights Firm of the Year, and it recognized the firm in 2021 as both the Employment Rights Firm of the Year and the Human Rights Firm of the Year. Law360 recognized the firm as Employment Practice Group of the Year in 2021, 2019, 2018, and 2016. Benchmark Litigation recognized the firm as the Labor & Employment Firm of the Year in 2021 and 2020.
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If you have potential legal claims and are seeking counsel, please call 646-768-7070 or email david.sanford@sanfordheisler.com. Attorneys at Sanford Heisler Sharp would like to have the opportunity to help you.
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