Read the story behind the Crowley v. Corning case from this recent article from the New York Times, “All the Nest Eggs in One Company Basket“:
Such stories abound in this company town, where loyalty, self-interest and faith in the company led many to bet their retirement portfolios almost exclusively on the stock of their employer. Economists said what happened here offered a pristine window on the mixed fortunes and stresses that come with retirement accounts based on company stock.
Read the resulting case–Crowley et al. v. Corning–and how the company’s motion to dismiss in that case was granted. Nixon Peabody LLP has a recent article on a later case–Crowley v. Corning Incorporated, 2004 U.S. Dist. LEXIS 758 (W.D.N.Y. 1/14/04)–in which the court addresses plaintiff’s motion to reopen the prior 2002 decision. Plaintiffs had sought to reopen the case by submitting “a handful of new cases, including the Enron decision and a similar decision involving WorldCom.” However, the court distinguished all of these cases and affirmed its prior 2002 decision in this recent 2004 decision.
The 2002 Crowley decision has been cited in numerous cases by defendants in ERISA 401(k) litigation involving company stock, and was cited by the court in the case of In re: Williams Cos. ERISA Litigation as pivotal authority in an unreported decision in which the court declined to to adopt the DOL’s interpretation of the law as espoused in the DOL’s Amicus Brief. (See this previous post where this unreported decision is discussed.) However, the DOL strongly notes in its WorldCom Amicus Brief that the Williams decision (which relied on Crowley) was “wrong” and “contrary to the weight of precedent.”
Defendants sought to rely on the Crowley case in the Dynegy case, Constance K. Schied v. Dynegy, Inc., et al. but their motions to dismiss were not granted. (Read the opinion in a recent Order Denying Motion to Dismiss.) Another case where defendants sought to rely on Crowley, but did not prevail, was in the In re Sears, Roebuck & Co. ERISA Litigation. (Read the recent Memorandum Opinion and Order Denying Defendants’ Motion to Dismiss in the Sears case.) Both the Dynegy and Sears opinions were rendered in March of this year.