In its reply in support of its motion to intervene in
the case against Northrop Grumman, the Department of Labor (DOL) noted that its
Employee Benefits Security Administration (EBSA) investigation and the
litigation are substantially similar since they both involve questions related
to the administration of the plan, including an examination of expenses paid by
the plan and whether those expenses are reasonable.
The EBSA said it first attempted to obtain records from
plaintiffs’ counsel, Schlichter, Bogard & Denton, in 2011, but Northrop
encouraged the U.S. District Court for the Central District of California to
deny the request, saying the EBSA should obtain the documents directly from the
company. The EBSA claimed records produced by the company in the three years
since were deficient, so it issued a subpoena to the Schlichter law firm.
The Schlichter subpoena covers a broader time period than
the EBSA investigation. The EBSA said many documents produced for the period
beyond the investigative period are relevant to its investigation because they
show the various expense trends which bear on their reasonableness, which might
assist it in determining whether any person is violating or has violated any
provision of the Employee Retirement Income Security Act (ERISA).
The court modified a protective order granted to Northrop
Grumman to permit Schlichter’s firm to produce to the DOL all documents which
have been created, obtained or produced by Schlichter which reflect
non-litigation events occurring after January 1, 2006, relating to the Northrop
Grumman Savings Plan.
The case was originally filed in September 2006.
Plaintiffs claimed the defendants violated their ERISA fiduciary
responsibilities by including in their retirement plans investment options for
which plaintiffs claim the fees were too high.
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