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On July 22, 2021, Plaintiffs filed a Class Action Complaint asserting claims under the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. §§ 1109, 1132, for breach of fiduciary duties against Defendants. The Settlement would release Defendants and related parties from any claims filed against them in the Action. The terms and conditions of the Settlement are set forth in a Class Action Settlement Agreement (the “Settlement Agreement”). Capitalized terms used in your notice but not defined in your notice have the meanings assigned to them in the Settlement Agreement. The Settlement Agreement and additional information with respect to the Action and the Settlement are available on the Important Court Documents page or by contacting Class Counsel, as described below.
The Parties have agreed to settle this case for $3,250,000 (the “Gross Settlement Amount”). The Court has preliminarily approved the Settlement, which provides for allocation of Settlement funds to Members of the Settlement Class.
The Court has scheduled a hearing concerning Final Approval of the Settlement, Class Counsel’s motion for attorney’s fees and costs, and for Case Contribution Awards to the Plaintiffs. That hearing, before the Honorable Julie R. Rubin is scheduled on May 22, 2024, at 2:00 p.m. in Courtroom 3A, at the U.S. District Court, 101 West Lombard Street, Baltimore, Maryland 21201.
If Final Approval is granted, the Settlement will bind you as a Member of the Settlement Class. You may appear at this hearing and/or object to the Settlement. Any objection to the Settlement, the motion for attorney’s fees and costs, and/or the request for Plaintiffs’ incentive Awards must be served in writing on the Court and the Parties’ counsel. More information about the hearing and how to object is explained below.
YOUR LEGAL RIGHTS WILL BE AFFECTED WHETHER OR NOT YOU TAKE ANY ACTION. READ YOUR NOTICE CAREFULLY. PLEASE DO NOT CONTACT DEFENDANTS OR THE COURT. THEY WILL NOT BE ABLE TO ANSWER YOUR QUESTIONS.
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YOUR LEGAL RIGHTS AND OPTIONS IN THIS SETTLEMENT |
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You can do nothing. |
If the Settlement is approved by the Court and you are a Member of the Settlement Class entitled to a payment under the Plan of Allocation, you do not need to do anything to receive a payment. Note, not all Members of the Settlement Class are entitled to a payment. |
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You can submit an objection. |
If you wish to object to any part of the Settlement, you may write to the Court and Counsel and explain why. For more information and where to send your objection, see Question 13, below. |
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You can appear at the Final Fairness Hearing on May 22, 2024. |
If you submit a written objection to the Settlement before the Court-Approved Deadline, you may (but do not have to) speak in Court about the fairness of the Settlement. |
These rights and options—and the deadlines to exercise them—are explained in your notice and the Frequently Asked Questions page.
Information concerning your individual share of the Net Settlement Amount will not be available for a number of months after the Court grants Final Approval of the Settlement and any appeals are resolved. Thank you for your patience.
SUMMARY OF CASE
As described in more detail below and in Plaintiffs’ Complaint, Plaintiffs allege that Defendants breached fiduciary duties owed to participants in and beneficiaries of the UMMS 401(a) Defined Contribution Plan (Plan No. 008206); the UMMS Voluntary 403(b) Plan (Plan No. 008207); the University of Maryland Medical System 403(b) Retirement Savings Plan; the University of Maryland Capital Region Health Retirement Savings Plan; the Shore Health System, Inc. 401(k) Plan; The University of Maryland Charles Regional Medical Center Savings Plan; The University of Maryland Capital Region Health Retirement Savings Plan; and the Baltimore Washington Health Enterprises 401(k) Plan, and each of their predecessor plans or successor plans, individually and collectively, and any trust created and attendant to all such plans (collectively, the “Plans”) during the Class Period. Defendants deny these allegations and insist they have done nothing wrong. Copies of the Settlement Agreement and many other documents related to the Settlement are available on the Important Court Documents page.
SUMMARY OF SETTLEMENT
The Settlement Agreement provides that Defendants will pay $3,250,000, which will be deposited into an account called the Qualified Settlement Fund. After payment of attorneys’ fees and litigation costs, and any expenses related to administration of the Settlement, the amount remaining in the Qualified Settlement Fund shall constitute the Net Settlement Amount and will be allocated among Members of the Settlement Class according to a Plan of Allocation to be approved by the Court.
STATEMENT OF POTENTIAL OUTCOME OF THE ACTION
Class Counsel believe that the claims against Defendants are well-grounded in law and fact and that breaches of fiduciary duty under ERISA occurred in this case. However, as with any litigated case, Members of the Settlement Class would face an uncertain outcome if the Action were to continue against Defendants. Continued litigation of the Action could result in a range of possible recoveries, including a judgment or verdict greater or less than the recovery under the Settlement Agreement, or no recovery at all.
Class Counsel believe that this Settlement reflects a reasonable compromise in light of the range of possible outcomes. Class Counsel believe that the Settlement is preferable to continued litigation and is in the best interest of the Members of the Settlement Class because the Settlement provides certainty with respect to the amount of recovery and results in a prompt recovery.
Throughout this litigation, Defendants have denied and continue to deny the claims and contentions alleged by Plaintiffs. Defendants believe they will prevail on the merits of this case. Nevertheless, Defendants have concluded that it is desirable for the Action to be fully and finally settled as to them and the other Releasees on the terms and conditions set forth in the Settlement Agreement.
The Court has not ruled in favor of either side. Both sides agreed to the Settlement to ensure a resolution and avoid the cost and risk of further litigation.
STATEMENT OF FEES AND EXPENSES INCURRED BY THE INDEPENDENT FIDUCIARY AND THE SETTLEMENT ADMINISTRATOR
An Independent Fiduciary is evaluating the Settlement and will be asked to authorize the Settlement on behalf of the Plan. The fees and expenses incurred by the Independent Fiduciary (including fees and expenses incurred by consultants, attorneys, and other professionals retained or employed by the Independent Fiduciary) in the course of evaluating and authorizing the Settlement on behalf of the Plan, up to $20,000, will be deducted from the Gross Settlement Amount.
A Settlement Administrator has been engaged to mail the notice to the Members of the Settlement Class, administer the Settlement and allocate the Net Settlement Amount among Members of the Settlement Class. The fees and expenses for the Settlement Administrator will be paid from the Gross Settlement Amount.
STATEMENT OF ATTORNEY’S FEES AND EXPENSES AND PLAINTIFFS CASE CONTRIBUTION AWARDS SOUGHT IN THE ACTION
Class Counsel will submit a fee petition to the Court in which they will ask the Court to award them attorneys’ fees in an amount not to exceed 33% of the Gross Settlement Amount, plus reimbursement of out-of-pocket costs and expenses advanced by Class Counsel and reasonably incurred in prosecuting the Action. In addition, Class Counsel will request that the Court award Case Contribution Awards in the amount of $7,500 to each of the three named Plaintiffs.