A federal choose in Chicago granted preliminary approval of a proposed class motion settlement Friday to supply $10 million in elevated pension advantages to greater than 1,700 contributors and beneficiaries in two of Citgo Petroleum Corp.’s pension plans.
U.S. District Choose Matthew Kennelly of the Northern District of Illinois granted preliminary approval Friday after counsel with Cohen Milstein filed the category motion settlement agreement Wednesday on behalf of the three former Citgo workers, Leslie Urlaub, Mark Pellegrini and Mark Ferry. The lawsuit, Urlaub et al v. Citgo Petroleum Corp., alleged that the Houston-based fuel and power firm didn’t correctly calculate joint and survivor annuity advantages for married retirees and imposed a “marriage penalty” that diminished the joint pensions beneath the worth of pensions paid to single retirees, in violation of the federal Worker Retirement Revenue Safety Act (ERISA).
The plaintiffs claimed Citgo’s pension plans utilized mortality tables from the Nineteen Seventies to find out the worth of the joint pensions, leading to married retirees systematically receiving lower than their single counterparts. The plaintiffs sought to repair the underpayments, and to reform the Citgo plans to totally adjust to ERISA requirements.
“We’re delighted by the settlement, which supplies a big victory for married retirees who’re entitled to obtain the total worth of their hard-earned pensions,” mentioned Michelle C. Yau, chair of Cohen Milstein’s Worker Advantages/ERISA observe. “As our claims have asserted, federal legislation doesn’t permit firms to shortchange married retirees and their spouses. At present’s proposed settlement is a serious victory on this authorized battle.”
The district courtroom will maintain a equity listening to Jan. 27 to overview feedback or objections to the settlement or to class counsel’s lawyer charges, amongst different issues, in response to the courtroom’s order Friday.
After Kennelly licensed the category of members and beneficiaries in Might, a three-judge panel for the U.S. Court docket of Appeals for the Seventh Circuit subsequently denied Citgo’s motion to attraction the previous workers’ class certification.
The district courtroom additionally rejected the corporate’s abstract judgment movement, disagreeing Citgo’s argument that your entire go well with ought to be dismissed based mostly on the statute of limitations. As an alternative, it discovered that every one three plaintiffs may proceed with their actuarial equivalence claims and that two of the three plaintiffs may proceed with their breach of fiduciary obligation declare. Citgo’s declare that the plaintiffs ought to have exhausted administrative treatments somewhat than submitting go well with in federal courtroom additionally didn’t persuade the courtroom.
The plaintiffs filed the grievance in August 2021. Yau instructed Regulation.com in Might that Citgo acknowledged it was underpaying its retirees in 2018 when it amended its pension plans to make use of up to date mortality assumptions. The corporate, nevertheless, solely fastened the problems for its former workers who retired after 2018, which left behind all retirees who had beforehand began their pension.
This case is one in every of six such “marriage penalty” ERSIA class actions Cohen Milstein has lately filed towards a few of the largest firms within the U.S., together with AT&T, IBM, Intel, Luxottica and Southern Co.
Becoming a member of Yau in representing the plaintiffs had been: Nina Wasow and Todd F. Jackson Feinberg of Jackson Worthman and Waso in Berkeley, California; John R. Stokes, Peter Okay. Stris, Rachana A. Pathak and Victor A. O’Connell of Stris & Maher; and Shaun P. Martin of the College of San Diego Regulation Faculty.
CITGO was represented by Edward Rossman, Michael J. Grey, Bethany Biesenthal, Carly Roessler, Courtney L. Burks, Evan Miller, Kevin R. Noble, Kristin Berger Parker, Kristin Simonet and Ryan S. Shymansky of Jones Day. Counsel didn’t return a request for remark.
