Court Approves $1.5M Settlement in Amway ERISA Lawsuit

A Michigan federal judge gave preliminary approval to a $1.5 million class action settlement to close the retirement lawsuit brought in 2020 by plan participants enrolled in the Amway Retirement Savings Plan.

The lawsuit filed by plaintiffs Joshua Garcia, Andrea P. Brandt and Howard Hart against the multi-level marketing company Amway’s parent company, Alticor Inc., alleged fiduciary breaches under the Employee Retirement Income Security Act for failing to monitor and control investment costs.

U.S. District Judge Paul L. Malone, presiding in U.S. District Court for the Western District of Michigan, called the agreement “fair, reasonable, and adequate” and granted preliminary approval of class action settlement on July 10. Malone approved the settlement and distribution of notice to the class. He also scheduled a fairness hearing to complete the settlement on November 18.

Court approval of the settlement was granted because the agreement was negotiated “vigorously and at arm’s length, between the plaintiffs’” counsel and attorneys for the defendants, Malone wrote.

The order to approve the agreement followed the plaintiffs’ unopposed July 1 motion for preliminary approval of class action settlement, according to the court docket. The agreement resulted from settlement negotiation between the parties convened on April 30, according to court documents.

The plaintiffs requested and Malone has approved Analytics LLC as the settlement administrator.

In the original complaint, plaintiffs alleged breach of the duty of prudence—against the fiduciary committee of Alticor Inc.—and failure to adequately monitor other fiduciaries—targeting the Board of Directors of Alticor Inc, and Alticor Inc.

The gross settlement amount includes the request of an attorney fees award not to exceed one-third of the total. The settlement agreement also provides for a reimbursement of attorney expenses up to $100,000 and a maximum of $10,000 incentive awards for each of the class representatives. These amounts are to be paid from the gross settlement amount.

The court order also approved a class period applying to all persons, except individual defendants and their immediate family members, who were participants in or beneficiaries of the Amway Retirement Savings Plan at any time during the period from November 9, 2014, through July 10, and any alternate payee of a person subject to a QDRO who participated in the plan at any time during the class period, wrote Malone.

The settlement agreement also secures non-monetary relief, providing that within five years after the settlement effective date, plan fiduciaries will conduct a request for proposal relating to the plan’s recordkeeping services.

The court appointed plaintiffs Garcia, Brandt and Hart as class representatives for the settlement class and law firm Capozzi Adler PC as class counsel for the settlement class.

The plaintiffs are represented by attorneys with the law firm Capozzi Adler PC and by Peter Muhic of Muhic Law LLC. The defendants are represented by attorneys with Jackson Lewis PC.

The plaintiffs’ attorneys declined comment. Neither representatives of the attorneys for Amway nor representatives of the attorneys for the defendants returned requests for comment.