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America June 4, 2024 4 mins read

DuPont ERISA Class Actions Survive Dismissal Bid in Delaware

America ı By Rochdi Rais

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DuPont ERISA Class Actions Survive Dismissal Bid in Delaware

A federal judge in Delaware on Monday denied most motions to dismiss and overruled all objections in federal proposed class actions accusing E.I. duPont de Nemours & Co. of using outdated actuarial formulas to calculate workers' retirement benefits.

In a four-page memorandum and order, U.S. District Judge Jennifer L. Hall found most claims strong enough to clear the bar for dismissal in the two cases alleging violations of the Employee Retirement Income Security Act.

The claims had already been recommended to go forward in February by U.S. Magistrate Judge Laura D. Hatcher.

"Plaintiffs nonetheless filed objections and defendants responded," Judge Hall wrote. "I can quickly deny plaintiffs' objections" in one of the two cases based on failures to identify a standard of review and to certify that the objections raise no new arguments," she added.

Mary J. Hamrick, David B. Beckley, and Valentin Rodriguez filed the first suit in March against E.I. du Pont, alleging it violated ERISA by failing to use U.S. Treasury Department actuarial assumptions to calculate benefits they received under their pension plan's income-leveling option for those who retire before age 62.

The retirees said ERISA requires companies to ensure that ILO monthly payments are calculated using specific actuarial assumptions, including applicable mortality tables and interest rates published by the Treasury Department. However, DuPont relied on models that failed to account for improved mortality rates since the 1960s, costing retirees tens of thousands of dollars, according to the complaint.

Weeks later, James Manning lodged his complaint against DuPont, claiming its use of outdated actuarial tables also excessively reduced benefits paid out to people who opted to receive spousal benefits.

Judge Hall wrote that she also would deny the Hamrick complaint objections because they focused only on nonbinding dicta in the magistrate's report.

"I do not think I need to join in a discussion about dicta, and by adopting a report and recommendation, I do not necessarily join in every word of a magistrate judge," Judge Hall wrote.

Manning also alleged in his complaint that DuPont violated its fiduciary duty because it administered the plan knowing that its use of faulty models violated federal benefits law.

Judge Hall upheld the magistrate judge's findings that the bulk of Manning's suit should be allowed to move forward, while ruling that the plaintiff's breach of fiduciary duty claim should be tossed because fiduciaries can't infringe on their duties under ERISA simply because they followed a pension plan's documents.

After the ruling, the judge gave the parties 30 days to prepare and file a proposed scheduling order and a three-page letter from each detailing "what this case is about," the parties' positions in any disputes on the schedule, and a list of other issues to be addressed in a pending conference on the timetable.

E.I. du Pont is a subsidiary of Corteva Inc. — a company that produces agricultural chemicals — and exists separately from DuPont de Nemours Inc. as the result of a 2017 merger between EIDP and the Dow Chemical Co. DuPont de Nemours is not a defendant in either of the proposed class actions.

Counsel for the parties did not immediately respond to a request for comment Monday.

The plan participants are represented by Carmella P. Keener of Cooch & Taylor PA, Douglas P. Needham of Motley Rice LLC, and Robert A. Izard and Christopher M. Barrett of Izard Kindall & Raabe LLP.

DuPont is represented by Chad S.C. Stover of Barnes & Thornburg LLP, and Christian J. Pistilli, Laura Flahive Wu, Robert Newman, and Nicholas Pastan of Covington & Burling LLP.

The cases are Hamrick et al. v. E.I. du Pont de Nemours and Co. et al., case number 1:23-cv-00238, and Manning v. EIDP Inc. et al., case number 1:23-cv-00271, in the U.S. District Court for the District of Delaware.

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Rochdi Rais

Rochdi Rais is the Fractional Head of Growth and financial and legal writer at USA Herald. He has been writing and editing financial, legal and U.S. news for years with over +4000 articles published during his career.

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