Pinnell, et al. v. Teva Pharmaceuticals USA, Inc., et al.
Teva ERISA Settlement
Case No. 2:19-cv-05738

Frequently Asked Questions

 

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  • You or someone in your family may have been a participant in or a beneficiary of the Plan during the period from December 6, 2013 to June 28, 2019, during which time your Plan account included investments in any of the Plan’s investment options.

    The Court directed that the Notice be sent to you because if you fall within the definition of the Settlement Class, you have a right to know about the Settlement and the options available to you regarding the Settlement. The Net Settlement Amount will be distributed to the Settlement Class members according to a Court-approved Plan of Allocation described in FAQ 7. The Notice describes the Action, the Settlement, your legal rights, what benefits are available, who is eligible for them, and how to get them.

     

  • The Action claims that under the ERISA, the Defendants owed fiduciary duties of loyalty, care, and prudence to the Plan and that they violated those duties in connection with the selection and monitoring of the Plan’s investment options. During the Class Period, participants in the Plan were able to allocate their account balances among various investment funds. Named Plaintiffs allege that because the Plan had nearly two billion dollars in assets, it had substantial bargaining power regarding the fees and expenses that were charged against participants’ investments. Named Plaintiffs further allege that Defendants, however, did not try to reduce the Plan’s expenses and selected for the Plan individual investment options that purportedly charged excessive fees compared to “similar” investment options available to the Plan. Additionally, Named Plaintiffs allege Defendants failed to prudently monitor the recordkeeping fees charged to Plan participants. Recordkeeping in simple terms refers to the suite of administrative services provided to retirement plan participants such as enrollment, implementing participants’ investment selections, maintaining the plan website and call center, and providing individual account statements to participants.

     

    THE DEFENSES IN THE ACTION

    Defendants deny all of the claims and allegations made in the Action and deny that they ever engaged in any wrongful conduct. If the Action were to continue, Defendants would raise numerous defenses to liability, including:

    • Defendants did not engage in any of the allegedly improper conduct charged in the Complaint;
    • Defendants reasonably and prudently managed the Plan’s investment options and fees and fulfilled all of their fiduciary obligations;
    • The Plan’s investment options were and are reasonable, prudent, and sound investment options for Plan participants;
    • Even if a court were to determine that Defendants failed to discharge any duty under ERISA, any such breach of fiduciary duty did not cause the Plan or its participants to suffer any loss.

     

    THE ACTION HAS BEEN AGGRESSIVELY LITIGATED

    Class Counsel has extensively investigated the allegations in the Action. Among other efforts, Class Counsel reviewed Plan-governing documents and materials, communications with Plan participants, U.S. Department of Labor filings, news articles and other publications, and other documents regarding the general and specific matters that were alleged in the original complaint filed on December 6, 2019 and the amended complaint filed on February 5, 2020. In the amended complaint (referred to here as the “Complaint”), Plaintiffs allege that Defendants breached the fiduciary duties of prudence and loyalty under ERISA by selecting for the Plan individual investment options that purportedly charged excessive fees compared to “similar” investment options available to the Plan. Plaintiffs also allege that Defendants allowed the Plan to pay excessive administrative expenses. This matter was set to go to trial on February 16, 2021. Over the last several months leading up to settlement, the Parties engaged in significant discovery, including the taking of the Named Plaintiffs’ depositions and exchange of documents.

     

    SETTLEMENT DISCUSSIONS

    On October 13, 2020, the Parties mediated the Action under the supervision of Hunter Hughes, Esq., a mediator experienced in ERISA and other complex class actions. During the full-day mediation, counsel for the Parties conducted extensive, arm’s-length negotiations concerning a possible compromise and settlement of the Action, eventually resulting in the Parties agreeing to a Settlement. The Parties subsequently negotiated the specific terms of the Settlement Agreement and related documents. On November 18, 2020, Named Plaintiffs filed a motion seeking preliminary approval of the Settlement as well as seeking related relief. The Settlement was approved on May 3, 2021.

  • In a class action, one or more plaintiffs, called “class representatives” or “named plaintiffs,” sue on behalf of people who have similar claims. All of these people who have similar claims collectively make up the “class” and are referred to individually as “class members.” One case resolves the issues for all class members together. Because the conduct alleged in this Action is claimed to have affected a large group of people – participants in the Plan during the Class Period – in a similar way, the Named Plaintiffs filed this case as a class action.

  • As in any litigation, all parties face an uncertain outcome. On the one hand, continuation of the case against the Defendants could result in a judgment greater than this Settlement. On the other hand, continuing the case could result in no recovery at all or in a recovery that is less than the amount of the Settlement. Based on these factors, the Named Plaintiffs and Class Counsel have concluded that the Settlement is in the best interests of all Settlement Class members.

  • You are a member of the Settlement Class if you have not previously released your legal claims against Teva pursuant to a Separation Agreement that covers the entirety of the Class Period in this case, and if you fall within the definition of the Settlement Class preliminarily approved by Judge Mark Kearney:

    All persons who participated in the Plan at any time during the Class Period, including any Beneficiary of a deceased person who participated in the Plan at any time during the Class Period, and any Alternate Payee of a person subject to a Qualified Domestic Relations Order who participated in the Plan at any time during the Class Period. Excluded from the Settlement Class are Defendants and their beneficiaries.

    If you are a member of the Settlement Class, the amount of money you will receive, if any, will depend upon the Plan of Allocation, described in FAQ 7.

  • A Settlement Fund consisting of $2,550,000 will be established in the Action. The amount of money that will be allocated among members of the Settlement Class, after the payment of any taxes and Court-approved costs, fees, and expenses, including attorneys’ fees and expenses of Class Counsel, any Court-approved Case Contribution Awards to be paid to the Named Plaintiffs, and payment of expenses incurred in calculating the Settlement payments and administering the Settlement, is called the Net Settlement Amount. The Net Settlement Amount will not be known until these other amounts are quantified and deducted. The Net Settlement Amount will be allocated to members of the Settlement Class according to a Plan of Allocation. The Plan of Allocation describes how Settlement payments will be distributed to Settlement Class members who receive a payment.

    All Settlement Class members and anyone claiming through them shall be deemed to fully release the Released Parties from Released Claims. The Released Parties are (a) Defendants; (b) Defendants’ insurers, co-insurers, and reinsurers; (c) Defendants’ direct and indirect past, present, and future affiliates, parents, subsidiaries, divisions, joint ventures, predecessors, successors, Successors In Interest, assigns, boards of trustees, boards of directors, officers, trustees, directors, partners, agents, managers, members, employees or heirs (including any individuals who serve or served in any of the foregoing capacities, such as members of the boards of trustees or boards of directors that are associated with any of Defendants’ past, present, and future affiliates), and each Person that controls, is controlled by, or is under common control with them; (d) the Plan and the Plan’s current and past fiduciaries, administrators, plan administrators, recordkeepers, service providers, consultants, attorneys, agents, insurers and parties-in-interest; and (e) Defendants’ independent contractors, representatives, attorneys, administrators, insurers, fiduciaries, accountants, auditors, advisors, consultants, personal representatives, spouses, heirs, executors, administrators, associates, employee benefit plan fiduciaries (with the exception of the Independent Fiduciary), employee benefit plan administrators, service providers to the Plan (including their owners and employees), members of their immediate families, consultants, subcontractors, and all persons acting under, by, through, or in concert with any of them. Released Claims are defined in the Settlement Agreement and include all claims that were or could have been asserted in the Action, whether known or unknown. This means, for example, that Settlement Class members will not have the right to sue the Released Parties for failure to prudently select and monitor the Plan’s investment options or fees, or related matters, that occurred during the Class Period.

    The above description of the Settlement is only a summary. The complete terms, including the definitions of the Released Parties and Released Claims, are set forth in the Settlement Agreement (including its exhibits), available on the Important Documents page, or by contacting Class Counsel listed in FAQ 16.

  • Each Settlement Class member’s share will be calculated according to a Court-approved Plan of Allocation by a third-party vendor (“Settlement Administrator”) selected by Class Counsel. You are not required to calculate the amount you may be entitled to receive under the Settlement as the Settlement Administrator will do so under the Plan of Allocation. In general, your proportionate share of the Settlement will be calculated as follows:

    • First, the Settlement Administrator will obtain balances for each Settlement Class member in their Plan accounts as of December 31, 2013, and at the end of each quarter during the Class Period (March 31, June 30, September 30, and December 31) up to and including March 31, 2019, with final data of as June 28, 2019. Each Class Member’s account balances for each year of the Class Period based on the account balances as of these dates will be summed. This summed amount will be that Class Member’s “Balance.” With regard to this first step of the calculation, different data will be utilized for Class Members who signed Separation Agreements with Teva. For these Class Members, the Settlement Administrator will use the balances in the Class Member’s Plan account beginning with the first date of the financial quarter following the quarter during which such Class Member entered into the Separation Agreement through the end of the Class Period.
    • Second, the Balance for all Class Members will be summed.
    • Third, each Class Member will receive a share of the Net Settlement Amount in proportion to the sum of that Class Member’s Balance as compared to the sum of the Balance for all Class Members, i.e. where the numerator is the Class Member’s Balance and the denominator is the sum of all Class Members’ Balances.
    • The amounts resulting from this initial calculation will be known as the Preliminary Entitlement Amount. Class Members who are entitled to a distribution of less than $10.00 will receive a distribution of $10.00 (the “De Minimis Amount”) from the Net Settlement Amount. In other words, the Settlement Administrator shall progressively increase Class Members’ awards falling below the De Minimis Amount until the lowest participating Class Member award is the De Minimis Amount, i.e. $10.00. The resulting calculation shall be the Final Entitlement Amount for each Class Member. The sum of the Final Entitlement Amount for each Class Member will equal the dollar amount of the Net Settlement Amount.

    You will not be required to produce records that show your Plan activity. If you are entitled to a share of the Settlement Fund, your share of the Settlement will be determined based on the Plan’s records for your account. If you have questions regarding the allocation of the Net Settlement Amount, please contact Class Counsel listed in FAQ 16.

  • You do not need to file a claim. The Entitlement Amount for Settlement Class members with an Active Account (an account with a positive balance) as of September 30, 2020, will be paid into the Plan. Former Participants will be paid directly by the settlement administrator by check. All such payments are intended by the Settlement Class to be “restorative payments” in accordance with Internal Revenue Service Revenue Ruling 2002-45. Checks issued to Former Participants shall be valid for 180 days from the date of issue. If you are a former Plan participant and have not provided the Plan with your current address, please contact Class Counsel listed in FAQ 16. Each Class Member who receives a payment under the Settlement Agreement shall be fully and ultimately responsible for payment of any and all federal, state, or local taxes resulting from or attributable to the payment received by such person.

  • The Settlement cannot be completed unless and until several events occur. These events include final approval of the Settlement by the Court (which occurred on May 3, 2021), approval of the Settlement by an independent fiduciary to the Plan, transfer of the Net Settlement Amount to the Plan, and calculation of the amount of the Settlement owed to each Settlement Class member. 

    Any updates regarding the timing of settlement payments will be posted on this website once that information is available.

  • You do not have the right to exclude yourself from the Settlement. The Settlement Agreement provides for certification of the Settlement Class as a non-opt-out class action under Federal Rule of Civil Procedure 23(b)(1), and the Court has preliminarily determined that the requirements of that rule have been satisfied. Thus, it is not possible for any Settlement Class members to exclude themselves from the Settlement. As a Settlement Class member, you will be bound by any judgments or orders that are entered in the Action for all claims that were or could have been asserted in the Action or are otherwise released under the Settlement.

    Although you cannot opt out of the Settlement, you can object to the Settlement and ask the Court not to approve it as long as your written objection was submitted by the deadline.

  • The Court has preliminarily appointed the law firm of Capozzi Adler, P.C. as Class Counsel for the Named Plaintiffs in the Action. You will not be charged directly by these lawyers. If you want to be represented by your own lawyer, you may hire one at your own expense.

  • Thank you for your email. Class Counsel filed a motion for the award of attorneys’ fees of not more than one third (33 1/3%) of the Settlement Amount, plus reimbursement of expenses incurred in connection with the prosecution of the Action not to exceed $50,000. This motion was considered by the Court at the Fairness Hearing. On June 11, 2021, the Court issued an order awarding attorneys’ fees and expenses in connection to the Settlement. A copy of the Order is available on the Important Documents page.

  • The deadline to object to the Settlement has passed. If you are a Settlement Class Member, you may have objected to the Settlement if you did like any part of it and wanted to give reasons why the Court should not approve it. To object, you needed to submit your written objection regarding the Settlement no later than April 12, 2021.

  • The Court held the Fairness Hearing on May 3, 2021, at the United States District Court for the Eastern District of Pennsylvania. At that hearing, the Court considered whether the Settlement is fair, reasonable, and adequate.  The Court also ruled on the motions for attorneys’ fees and reimbursement of expenses and for Case Contribution Awards for the Named Plaintiffs. 

    The Court granted final approval of the Settlement on the same day. A copy of the Order is available on the Important Documents page.

  • No, you were not required to participate in the hearing.

  • If you submitted a written objection to the Settlement to the Court and counsel before the Court-approved deadline, you could have participated in the Fairness Hearing and presented your objections to the Court. Your Notice of Intention To Participate needed to be received by the parties’ attorneys, no later than April 27, 2021, and needed to be filed with the Clerk of the Court.

    The deadline has passed. The hearing occurred on May 3, 2021, and the Court granted final approval of the Settlement.

  • If you do nothing and you are a Settlement Class member, you will participate in the Settlement of the Action as described in the Notice.

  • Yes. The Notice summarizes the Settlement. The complete terms are set forth in the Settlement Agreement. You may obtain a copy of the Settlement Agreement by making a written request to Class Counsel listed in FAQ 16. Copies may also be obtained on the Important Documents page, by calling the toll-free number, 833-961-3341, or by sending an email to Settlement@CapozziAdler.com. You are encouraged to read the complete Settlement Agreement.

DO NOT CONTACT THE COURT, THE CLERK’S OFFICE, THE COMPANY, OR DEFENDANTS REGARDING THIS SETTLEMENT. THEY WILL NOT BE ABLE TO ANSWER YOUR QUESTIONS.

For More Information

Visit this website often to get the most up-to-date information.

Mail

Teva ERISA Settlement
c/o JND Legal Administration
PO Box 91343
Seattle, WA 98111