The case of six NYU professors alleging that the university mismanaged their retirement funds will be retried, a federal appeals court ruled on Oct. 1.
The U.S. Court of Appeals for the Second Circuit decided that the lawsuit — previously ruled in favor of NYU — would be sent back to the district court. In the suit, the plaintiffs allege that the university, by paying millions of dollars in excessive fees to the company that manages university retirement plans, did not act in the professors’ best interests.
The initial case was dismissed by District Court Judge Katherine B. Forrest, an NYU Law alumna and NYU adjunct law professor. Forrest, who is also employed by a law firm chaired by an NYU trustee, disclosed her ties to NYU at the start of the case. A motion by plaintiffs last year to have the ruling dismissed because of her association with the university failed.
A second case was filed by attorney Jerry Schlicther on behalf of the NYU employees against Cammack LaRhette Advisors LLC, the company that managed the retirement funds, rather than the university. Initially dismissed by Forrest, the case has been renewed upon repeal.
“We have always felt that NYU and its consultant [Cammack] breached their shared duties to the employees and retirees,” Schlichter, the plaintiffs’ lead attorney, told WSN. “We remain confident that ultimately the court will agree.”
The lawsuit relates to the Employee Retirement Income Security Act, a national law that requires institutions to act in the best interest of participants and plan beneficiaries and gives participants the right to sue.
NYU spokesperson John Beckman said the university feels confident the courts’ original ruling will stand.
“The facts of the Sacerdote case were thoroughly aired at trial in a case the plaintiffs brought and lost,” Beckman said. “Since that time, the plaintiffs have been tireless in trying to take new bites of the same litigation apple.”
There is currently no court date set.
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