U.S. District Judge Anita B. Brody of the U.S. District Court for the Eastern District of Pennsylvania refused a request by plaintiff Michael Dann to throw out the “causation” defense. “Lincoln’s causation defenses thus appear to go to the heart of a requisite element for Dann’s claims, and are not clearly legally insufficient,” Brody wrote in a recent order.
Dann’s 2008 lawsuit claimed that the fiduciaries committed a breach by continuing to offer company stock after it was no longer prudent despite the fact that Lincoln National stock had dropped by 90% as a result of the subprime mortgage meltdown rolling through the nation’s financial services sector.
As the Dann case moved through the courts, Lincoln contended that it was shielded by ERISA’s safe harbor defense as well as by the notion that any losses suffered by the plaintiffs was as a result of their investment choices and not because of something the fiduciaries did or didn’t do.
The most recent Brody order is here .
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