(ERISA) Litigation 08-NC-70000-Plai
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Case: 1:08-nc-70000-SO Doc #: 124 Filed: 08/20/10 1 of 8. PageID #: 6117 UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF OHIO EASTERN DIVISION : In re: NATIONAL CITY CORPORATION : Case No. 08-nc-70000 SECURITIES, DERIVATIVE & ERISA : LITIGATION : JUDGE SOLOMON OLIVER, JR. : This Document Relates to: : The ERISA Cases : : : PLAINTIFFS’ MOTION FOR PRELIMINARY APPROVAL OF SETTLEMENT; CONDITIONAL CERTIFICATION OF SETTLEMENT CLASS; APPROVAL OF CLASS NOTICE AND SCHEDULING OF A FINAL FAIRNESS HEARING BARROWAY TOPAZ KESSLER STULL, STULL & BRODY MELTZER & CHECK, LLP Edwin J. Mills Joseph H. Meltzer Michael Klein Edward W. Ciolko 6 East 45th Street 5th Floor Mark K. Gyandoh New York, NY 10017 280 King of Prussia Road Tel.: (212) 687-7230 Radnor, PA 19087 Fax: (212) 490-2022 Tel.: (610) 667-7706 Fax: (610) 667-7056 Interim Co-Lead Counsel for ERISA Plaintiffs GOLDMAN SCARLATO & KARON, P.C. Daniel R. Karon 55 Public Square Drive, Suite 1500 Cleveland, OH 44113 Telephone: (216) 622-1851 Facsimile: (216) 622-1852 Interim Liaison Counsel for ERISA Plaintiffs Case: 1:08-nc-70000-SO Doc #: 124 Filed: 08/20/10 2 of 8. PageID #: 6118 Plaintiffs Sharon A. Deucher, Deborah Douglas, James Elsinghorst, Barbara Grosick, Charles C. Gunning, Robert Huenefeld, Rita Klabenesh, Rodolfo Ranallo, Jr., George Rithianos, Loretta D. Rogers, Robert Steinberg, and Ella R. Whitlow respectfully move the Court to issue an Order (1) granting preliminary approval of the proposed Settlement in this putative class action case, (2) conditionally certifying the Settlement Class, (3) approving the manner of giving notice of the Settlement to the proposed Settlement Class (“Notice Plan”), 1 and (4) setting a date for a Final Fairness Hearing. In support of this motion, Plaintiffs state as follows: 1. Plaintiffs have alleged that Defendant National City Corporation (“National City”) and other Defendants breached their fiduciary duties to the National City Savings and Investment Plan, together with its predecessors and successors (including The PNC Financial Services Group, Inc. Incentive Savings Plan, its successor by plan merger), and any trust created under such plan (the “Plan”), and the Plan’s participants and beneficiaries. 2. Plaintiffs allege that Defendants were Plan fiduciaries who breached their fiduciary duties in two ways. First, Plaintiffs allege that Defendants allowed the Plan to purchase and hold shares of National City common stock when National City’s common stock was not a prudent investment option for the Plan due to the Company’s undisclosed, excessively risky lending practices from September 5, 2006 to December 31, 2008. Second, Plaintiffs allege that Defendants breached their fiduciary duties by offering mutual funds of Allegiant Asset Management Company (formerly known as “Armada Funds”) (the “Allegiant Funds”), an affiliate of National City, as investment alternatives in the Plan from March 25, 2002 to December 31, 2009. Plaintiffs allege these breaches of Defendants’ fiduciary duties resulted in a 1 Proposed class notices are appended as Exhibits 1 and 2 to the form of Preliminary Approval Order, which is Exhibit A to the Class Action Settlement Agreement. 1 Case: 1:08-nc-70000-SO Doc #: 124 Filed: 08/20/10 3 of 8. PageID #: 6119 loss to the Plan and the Plan’s participants. 3. Defendants contest all of Plaintiffs’ allegations and deny that they have breached their fiduciary duties. Defendants also assert affirmative defenses, including that ERISA § 404(c) operates to shift the risk of investment loss in the Plan participants’ 401(k) accounts. 4. After two years of litigation, in February of 2010 the parties embarked on a private mediation conducted by well-known, respected and experienced mediator, David Geronemus of JAMS. The mediation was successful with the parties herein agreeing to a class action settlement in principle in the amount of $43 million. The terms and conditions of the $43 million class action settlement have now been documented in the Class Action Settlement Agreement (the “Agreement”) dated as of August 20, 2010, a copy of which is attached hereto. 5. For the reasons set forth herein and in the accompanying Memorandum of Law, Plaintiffs submit that the proposed settlement is fair, reasonable and adequate. Moreover, the Notice Plan satisfies the requirements of due process and the form of notice is consistent with the form of notice used in analogous actions. Accordingly, preliminary approval should be granted, the Settlement Class should be conditionally certified, the Notice Plan should be approved, and a date should be set for the Final Fairness Hearing. 2 Case: 1:08-nc-70000-SO Doc #: 124 Filed: 08/20/10 4 of 8. PageID #: 6120 Dated: August 20, 2010 /s/ Edward W. Ciolko Edward W. Ciolko Joseph H. Meltzer Mark K. Gyandoh BARROWAY TOPAZ KESSLER MELTZER & CHECK, LLP 280 King of Prussia Road Radnor, PA 19087 Telephone: (610) 667-7706 Facsimile: (610) 667-7056 STULL, STULL & BRODY Edwin J. Mills Michael J. Klein 6 East 45th Street New York, NY 10017 Telephone: (212) 687-7230 Facsimile: (212) 490-2022 Interim Co-Lead Counsel for ERISA Plaintiffs GOLDMAN SCARLATO & KARON, P.C. Daniel R. Karon 55 Public Square Drive, Suite 1500 Cleveland, OH 44113 Telephone: (216) 622-1851 Facsimile: (216) 622-1852 Interim Liaison Counsel for ERISA Plaintiffs JAMES E. ARNOLD & ASSOCIATES, LPA James E. Arnold Scott J. Stitt 471 East Broad Street, Suite 1400 Columbus, OH 43215 Telephone: (614) 460-1600 Facsimile: (614) 469-1066 3 Case: 1:08-nc-70000-SO Doc #: 124 Filed: 08/20/10 5 of 8. PageID #: 6121 LAW OFFICES OF ALFRED G. YATES, JR., PC Alfred G. Yates, Jr. 519 Allegheny Building 429 Forbes Avenue Pittsburgh, PA 15219 McTIGUE & PORTER, LLP J. Brian McTigue Gregory Y. Porter Jennifer H. Strouf 5301 Wisconsin Avenue, NW, Suite 350 Washington, DC 20015 Telephone: (202) 364-6900 Facsimile: (202) 364-9960 THE GRIFFIN LAW FIRM Mark Griffin 175 Honeybelle Oval Orange, OH 44022 Telephone: (216) 346-7376 Facsimile: (216) 861-6679 IZARD NOBEL LLP Robert A. Izard 20 Church St., Suite 1700 Hartford, CT 06103 Telephone: (860) 493-6292 Facsimile: (860) 493-6290 MEHRI & SKALET, PLLC Cyrus Mehri Janelle Carter 1250 Connecticut Avenue, NW, Suite 300 Washington, DC 20036 Telephone: (202) 822-5100 Facsimile: (202) 822-4997 4 Case: 1:08-nc-70000-SO Doc #: 124 Filed: 08/20/10 6 of 8. PageID #: 6122 MAJOR KHAN, LLC Major Khan 20 Bellevue Street Weehawken, NJ 07086 Telephone: (646) 546-5664 Facsimile: (646) 546-5755 Thomas J. McKenna GAINEY & McKENNA Thomas J. McKenna 295 Madison Avenue New York, NY 10017 Telephone: (212) 983-1300 Facsimile: (212) 983-0383 LINER YANKELEVITZ SUNSHINE & REGENSTREIF, LLP Ronald S. Kravitz 199 Fremont Street, 20th Floor San Francisco, CA 94105-2255 Telephone: (415) 489-7700 Facsimile: (415) 489-7701 POWERS FRIEDMAN LINN, PLL Laurence Powers 23240 Chagrin Boulevard, Suite 180 Cleveland, OH 44122-5469 Telephone: (216) 514-1180 Facsimile: (216) 514-1185 WEISMAN KENNEDY & BERRIS CO., LPA R. Eric Kennedy Daniel P. Goetz Midland Building 101 Prospect Avenue Cleveland, OH 44115 Telephone: (216) 781-1111 5 Case: 1:08-nc-70000-SO Doc #: 124 Filed: 08/20/10 7 of 8. PageID #: 6123 COUGHLIN STOIA GELLER RUDMAN & ROBBINS, LLP Samuel H. Rudman David A. Rosenfeld Mark Reich Mario Alba, Jr. 58 South Service Road, Suite 200 Melville, NY 11747 Telephone: (631) 367-7100 Facsimile: (631) 367-1173 Attorneys for ERISA Plaintiffs 6 Case: 1:08-nc-70000-SO Doc #: 124 Filed: 08/20/10 8 of 8. PageID #: 6124 CERTIFICATE OF SERVICE I hereby certify that on August 20, 2010, a copy of the foregoing Plaintiffs’ Motion for Preliminary Approval of Settlement; Conditional Certification of Settlement Class; Approval of Class Notice; and Scheduling a Final Fairness Hearing was filed electronically. Notice of this filing will be sent by operation of the Court’s electronic filing system to all parties indicated on the electronic filing receipt. Parties may access this filing through the Court’s system. s/ Edward W. Ciolko Edward W. Ciolko Barroway Topaz Kessler Meltzer & Check, LLP 280 King of Prussia Road Radnor, PA 19087 Tel: (610) 667-7706 Fax: (610) 667-7056 7 Case: 1:08-nc-70000-SO Doc #: 124-1 Filed: 08/20/10 1 of 41. PageID #: 6125 UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF OHIO EASTERN DIVISION : In re: NATIONAL CITY CORPORATION : Case No. 08-nc-70000 SECURITIES, DERIVATIVE & ERISA : LITIGATION : JUDGE SOLOMON OLIVER, JR. : This Document Relates to: : The ERISA Cases : : : MEMORANDUM OF LAW IN SUPPORT OF PLAINTIFFS’ MOTION FOR PRELIMINARY APPROVAL OF SETTLEMENT; CONDITIONAL CERTIFICATION OF SETTLEMENT CLASS; APPROVAL OF CLASS NOTICE AND SCHEDULING OF A FINAL FAIRNESS HEARING BARROWAY TOPAZ KESSLER STULL, STULL & BRODY MELTZER & CHECK, LLP Edwin J. Mills Joseph H. Meltzer Michael Klein Edward W. Ciolko 6 East 45th Street 5th Floor Mark K. Gyandoh 280 King of Prussia Road New York, NY 10017 Radnor, PA 19087 Tel.: (212) 687-7230 Tel.: (610) 667-7706 Fax: (212) 490-2022 Fax: (610) 667-7056 Interim Co-Lead Counsel for ERISA Plaintiffs GOLDMAN SCARLATO & KARON, P.C. Daniel R. Karon 55 Public Square Drive, Suite 1500 Cleveland, OH 44113 Telephone: (216) 622-1851 Facsimile: (216) 622-1852 Interim Liaison Counsel for ERISA Plaintiffs Case: 1:08-nc-70000-SO Doc #: 124-1 Filed: 08/20/10 2 of 41. PageID #: 6126 TABLE OF CONTENTS I. INTRODUCTION 1 II. FACTUAL AND PROCEDURAL BACKGROUND 4 A. Description of the Action 4 B. Investigation of Claims and Plaintiffs’ Complaint 6 C. Summary of the Litigation 6 D. Settlement Negotiations 7 E. The Proposed Settlement 8 F. Reasons for the Settlement 8 G. Proposed Timetable 10 III. THE PROPOSED NOTICE PLAN SHOULD BE APPROVED 11 A. Description of Notice Plan 11 B. The Proposed Notice Plan Meets The Requirements of Due Process 11 IV.