Crawford, et al., v. CDI Corporation, et al

Frequently Asked Questions

1. BASIC INFORMATION

1. WHY DID I GET THIS NOTICE PACKAGE?

   You or someone in your family may have been a participant in or a beneficiary of the Plan during the period from July 7, 2014 to July 7, 2020, during which time your Plan account included investments in any of the Plan’s investment options.

   The Court directed that the Notice be sent to you because if you fall within the definition of the Settlement Class, you have a right to know about the Settlement and the options available to you regarding the Settlement before the Court decides whether to approve the Settlement. If the Court approves the Settlement, and after any objections and appeals are resolved, the Net Settlement Amount will be distributed to the Settlement Class members according to a Court-approved Plan of Allocation described below. The Notice describes the Action, the Settlement, your legal rights, what benefits are available, who is eligible for them, and how to get them.

2. WHAT IS THE ACTION ABOUT?

   The Action claims that under ERISA, the Defendants owed fiduciary duties of loyalty, care, and prudence to the Plan and that they violated those duties in connection with the selection and monitoring of the Plan’s investment options. During the Class Period, participants in the Plan were able to allocate their account balances among various investment funds. Named Plaintiffs allege that because the Plan had over $260 million dollars in assets, it had substantial bargaining power regarding the fees and expenses that were charged against participants’ investments. Named Plaintiffs further allege that Defendants, however, did not try to reduce the Plan’s expenses and selected for the Plan individual investment options that purportedly charged excessive fees compared to “similar” investment options available to the Plan. Additionally, Named Plaintiffs allege Defendants failed to prudently monitor the recordkeeping fees charged to Plan participants. Recordkeeping in simple terms refers to the suite of administrative services provided to retirement plan participants such as enrollment, implementing participants’ investment selections, maintaining the plan website and call center, and providing individual account statements to participants.

   THE DEFENSES IN THE ACTION

   Defendants deny all of the claims and allegations made in the Action and deny that they ever engaged in any wrongful conduct. If the Action were to continue, Defendants would raise numerous defenses to liability, including but not limited to:

   Defendants did not engage in any of the allegedly improper conduct charged in the Complaint;
   Defendants reasonably and prudently managed the Plan’s investment options and fees and fulfilled all of their fiduciary obligations;
   The Plan’s investment options were and are reasonable, prudent, and sound investment options for Plan participants;
   Even if a court were to determine that Defendants failed to discharge any duty under ERISA, any such breach of fiduciary duty did not cause the Plan or its participants to suffer any loss.

   THE ACTION HAS BEEN AGGRESSIVELY LITIGATED

   Class Counsel has extensively investigated the allegations in the Action. Among other efforts, Class Counsel reviewed Plan-governing documents and materials, communications with Plan participants, U.S. Department of Labor filings, news articles and other publications, and other documents regarding the general and specific matters that were alleged in the original complaint filed on July 7, 2020 and the amended complaint filed on November 11, 2020. In the amended complaint (referred to here as the “Complaint”), Plaintiffs allege that Defendants breached the fiduciary duties of prudence and loyalty under ERISA by selecting for the Plan individual investment options that purportedly charged excessive fees compared to “similar” investment options available to the Plan. Plaintiffs also allege that Defendants allowed the Plan to pay excessive administrative expenses. This matter was set to go to trial on July 5, 2022. Over the last months leading up to settlement, the Parties began to engage in discovery, and were litigating Defendants’ motion to dismiss.

   SETTLEMENT DISCUSSIONS

   On March 1, 2021, the Parties mediated the Action under the supervision of Eastern District of Pennsylvania Magistrate Judge Timothy R. Rice. During the full-day mediation, counsel for the Parties conducted extensive, arm’s-length negotiations concerning a possible compromise and settlement of the Action, eventually resulting in the Parties agreeing to a proposed Settlement. The Parties subsequently negotiated the specific terms of the Settlement Agreement and related documents. On June 7, 2021, Named Plaintiffs filed a motion seeking preliminary approval of the Settlement as well as seeking related relief.

3. WHY IS THIS CASE A CLASS ACTION?

   In a class action, one or more plaintiffs, called “class representatives” or “named plaintiffs,” sue on behalf of people who have similar claims. All of these people who have similar claims collectively make up the “class” and are referred to individually as “class members.” One case resolves the issues for all class members together. Because the conduct alleged in this Action is claimed to have affected a large group of people – participants in the Plan during the Class Period – in a similar way, the Named Plaintiffs filed this case as a class action.

4. WHY IS THERE A SETTLEMENT?

   As in any litigation, all parties face an uncertain outcome. On the one hand, continuation of the case against the Defendants could result in a judgment greater than this Settlement. On the other hand, continuing the case could result in no recovery at all or in a recovery that is less than the amount of the Settlement. Based on these factors, the Named Plaintiffs and Class Counsel have concluded that the proposed Settlement is in the best interests of all Settlement Class members.

5. HOW DO I KNOW WHETHER I AM PART OF THE SETTLEMENT?

   You are a member of the Settlement Class if you have not previously released your legal claims against CDI Corporation pursuant to a Separation Agreement that covers the entirety of the Class Period in this case, and if you fall within the definition of the Settlement Class preliminarily approved by Judge Timothy Rice:

   All persons who participated in the Plan at any time during the Class Period, including any Beneficiary of a deceased Person who participated in the Plan at any time during the Class Period, and any Alternate Payee of a Person subject to a Qualified Domestic Relations Order who participated in the Plan at any time during the Class Period. Excluded from the Settlement Class are Defendants and their beneficiaries.

   If you are a member of the Settlement Class, the amount of money you will receive, if any, will depend upon the Plan of Allocation, described below.

6. THE SETTLEMENT BENEFITS—WHAT YOU GET

6. WHAT DOES THE SETTLEMENT PROVIDE?

   Provided that the Settlement becomes Final, a Settlement Fund consisting of $1,800,000 will be established in the Action. The amount of money that will be allocated among members of the Settlement Class, after the payment of any taxes and Court-approved costs, fees, and expenses, including attorneys’ fees and expenses of Class Counsel, any Court-approved Case Contribution Awards to be paid to the Named Plaintiffs, and payment of expenses incurred in calculating the Settlement payments and administering the Settlement, is called the Net Settlement Amount. The Net Settlement Amount will not be known until these other amounts are quantified and deducted. The Net Settlement Amount will be allocated to members of the Settlement Class according to a Plan of Allocation to be approved by the Court. The Plan of Allocation describes how Settlement payments will be distributed to Settlement Class members who receive a payment.

   If the Settlement is approved by the Court, all Settlement Class members and anyone claiming through them shall be deemed to fully release the Released Parties from Released Claims. The Released Parties are (a) Defendants; (b) Defendants’ insurers, co-insurers, and reinsurers; (c) Defendants’ direct and indirect past, present, and future affiliates, parents, subsidiaries, divisions, joint ventures, predecessors, successors, Successors In Interest, assigns, boards of trustees, boards of directors, officers, trustees, directors, partners, agents, managers, members, employees or heirs (including any individuals who serve or served in any of the foregoing capacities, such as members of the boards of trustees or boards of directors that are associated with any of Defendants’ past, present, and future affiliates), and each Person that controls, is controlled by, or is under common control with them; (d) the Plan and the Plan’s current and past fiduciaries, administrators, plan administrators, recordkeepers, service providers, consultants, attorneys, agents, insurers and parties-in-interest; and (e) Defendants’ independent contractors, representatives, attorneys, administrators, insurers, fiduciaries, accountants, auditors, advisors, consultants, personal representatives, spouses, heirs, executors, administrators, associates, employee benefit plan fiduciaries (with the exception of the Independent Fiduciary), employee benefit plan administrators, service providers to the Plan (including their owners and employees), members of their immediate families, consultants, subcontractors, and all persons acting under, by, through, or in concert with any of them. Released Claims are defined in the Settlement Agreement and include all claims that were or could have been asserted in the Action, whether known or unknown. This means, for example, that Settlement Class members will not have the right to sue the Released Parties for failure to prudently select and monitor the Plan’s investment options or fees, or related matters that occurred during the Class Period.

   The above description of the proposed Settlement is only a summary. The complete terms, including the definitions of the Released Parties and Released Claims, are set forth in the Settlement Agreement (including its exhibits).

7. HOW MUCH WILL MY PAYMENT BE?

   Each Settlement Class member’s share will be calculated according to a Court-approved Plan of Allocation by a third-party vendor (“Settlement Administrator”) selected by Class Counsel. You are not required to calculate the amount you may be entitled to receive under the Settlement as the Settlement Administrator will do so under the Plan of Allocation. In general, your proportionate share of the Settlement will be calculated as follows:

   Recordkeeping Costs

   For each class member that was active in the Plan at any time during the period July 7, 2014 through July 7, 2020, the Recognized Loss will be calculated as: the number of months that the class members’ Plan account was active multiplied by $0.31 and rounded up to the nearest dollar.

   For example, if a class member maintained an active Plan account between January 1, 2016 and June 30, 2019 (i.e., 42 months), the Recognized Loss for that participant will be $13.00. (42 x $0.31 = $12.84, rounded to $13.00)

   Funds

   For each class member that maintained a balance greater than $0.00 in any of the Harmed Investment Funds shown in Table A below at any time during the period July 7, 2014 through July 7, 2020, the Recognized Loss will be determined by calculating the average dollar balance held by the class member in each of the Harmed Investment Funds during the Class Period and multiplying the average dollar balance by 0.30%.

   For example, if a class member maintained an average dollar balance in the Alger Capital Appreciation Fund equal to $10,000.00, his or her Recognized Loss would be $30.00. ($10,000 x 0.0030) = $30.00. If a class member maintained a balance in more than one of the Harmed Investment Funds, the average dollar balance calculation will be performed on a fund-by-fund basis and multiplied by 0.30% to achieve the Recognized Loss.

   TABLE A
   Great West Lifetime 2015 Trust Great West Lifetime 2025 Trust Great West Lifetime 2035 Trust Great West Lifetime 2045 Trust Great West Lifetime 2055 Trust Alger Capital Appreciation BlackRock Global Allocation BlackRock Inflation Prot Bond JHancock Balance JPMorgan Large Cap Growth MFS Global Real Estate Oppenheimer Developing Markets Putnam Large Cap Value Trust	Putnam S&P 500 Fund Putnam Stable Value Fund TIAA-CREF Intl Eq Index Western Asset Core Bond William Blair Small-Mid Cap Growth American Century Mid Cap Value American Funds Europacific Growth American Funds New Perspective Invesco Small Cap Equity Putnam Equity Income Putnam Income Templeton Global Bond Vanguard Small Cap Index

   Each Authorized Claimant shall recover his, her, or its pro rata share of the Net Settlement Fund according to the Recognized Loss formulas shown above. If the prorated share calculates to less than $10.00, it will be removed from the calculation and it will not be paid.

   Distributions will be made after the Court has finally approved the Settlement.

   You will not be required to produce records that show your Plan activity. If you are entitled to a share of the Settlement Fund, your share of the Settlement will be determined based on the Plan’s records for your account. If you have questions regarding the allocation of the Net Settlement Amount, please contact Class Counsel listed on the Contact Us page.

8. HOW MAY I RECEIVE A PAYMENT?

   You do not need to file a claim. The Entitlement Amount for Settlement Class members with an Active Account (an account with a positive balance) as of May 31, 2021, will be paid into the Plan. Former Participants will be paid directly by the settlement administrator by check. All such payments are intended by the Settlement Class to be “restorative payments” in accordance with Internal Revenue Service Revenue Ruling 2002-45. Checks issued to Former Participants pursuant to this paragraph shall be valid for 180 days from the date of issue. If you are a former Plan participant and have not provided the Plan with your current address, please contact Class Counsel listed on the Contact Us page. Each Class Member who receives a payment under this Settlement Agreement shall be fully and ultimately responsible for payment of any and all federal, state, or local taxes resulting from or attributable to the payment received by such person.

9. WHEN WOULD I GET MY PAYMENT?

   The Settlement cannot be completed unless and until several events occur. These events include final approval of the Settlement by the Court, approval of the Settlement by an independent fiduciary to the Plan, transfer of the Net Settlement Amount to the Plan, and calculation of the amount of the Settlement owed to each Settlement Class member. If objections are made to the Settlement or appeals are taken by objectors who oppose the approval of the Settlement, this process may take a long time to complete, possibly several years.

   There will be no payments if the Settlement Agreement is terminated.

   The Settlement Agreement may be terminated for several reasons, including if (1) the Court does not approve, or materially modifies the Settlement Agreement, or (2) the Court approves the Settlement Agreement but the approval is reversed or materially modified by an appellate court. If the Settlement Agreement is terminated, the Action will proceed again as if the Settlement Agreement had not been entered into. The Settlement is not conditioned upon the Court’s approval of attorneys’ fees or the reimbursement of expenses/costs sought by Class Counsel, the Case Contribution Awards sought by the Named Plaintiffs, or any appeals solely related thereto.

10. CAN I GET OUT OF THE SETTLEMENT?

    You do not have the right to exclude yourself from the Settlement. The Settlement Agreement provides for certification of the Settlement Class as a non-opt-out class action under Federal Rule of Civil Procedure 23(b)(1), and the Court has preliminarily determined that the requirements of that rule have been satisfied. Thus, it is not possible for any Settlement Class members to exclude themselves from the Settlement. As a Settlement Class member, you will be bound by any judgments or orders that are entered in the Action for all claims that were or could have been asserted in the Action or are otherwise released under the Settlement.

    Although you cannot opt out of the Settlement, you can object to the Settlement and ask the Court not to approve it. For more information on how to object to the Settlement, see the answer to FAQ 13 below.

11. THE LAWYERS REPRESENTING YOU

11. DO I HAVE A LAWYER IN THE CASE?

    The Court has preliminarily appointed the law firm of Edelson Lechtzin LLP as Class Counsel for the Named Plaintiffs in the Action. You will not be charged directly by these lawyers. If you want to be represented by your own lawyer, you may hire one at your own expense.

12. HOW WILL THE LAWYERS BE PAID?

    Class Counsel will file a motion for the award of attorneys’ fees of not more than 30% of the Settlement Amount, plus reimbursement of expenses incurred in connection with the prosecution of the Action not to exceed $20,000. This motion will be considered at the Fairness Hearing described below.

    OBJECTING TO THE ATTORNEYS’ FEES

    By following the procedures described in the answer to FAQ 13, you can tell the Court that you do not agree with the fees and expenses the attorneys intend to seek and ask the Court to deny their motion or limit the award.

13. HOW DO I TELL THE COURT IF I DO NOT LIKE THE SETTLEMENT?

    If you are a Settlement Class Member, you can object to the Settlement if you do not like any part of it. You can give reasons why you think the Court should not approve it. To object, you must send a letter or other writing saying that you object to the Settlement in Crawford, et al., v. CDI Corporation, et al., No. 2:20-cv-3317-CFK (E.D. Pa.). Be sure to include your name, address, telephone number, signature, and a full explanation of all the reasons why you object to the Settlement. You must file your objection with the Clerk of the Court of the United States District Court for the Eastern District of Pennsylvania no later than October 25, 2021. The address is:

    Clerk of the Court
    United States District Court, Eastern District of Pennsylvania
    James A. Byrne United States Courthouse
    601 Market Street
    Philadelphia, PA 19106

    The objection must refer prominently to this case name: Crawford, et al., v. CDI Corporation, et al., No. 2:20-cv-3317-CFK (E.D. Pa.).

    A copy of your objection must also be provided to Class Counsel and Defense Counsel, respectively, at the following addresses:

    Class Counsel
    
    Eric Lechtzin
    Edelson Lechtzin LLP
    3 Terry Drive
    Suite 205
    Newtown, PA 18940

    Defense Counsel
    
    Brian T. Ortelere
    Morgan, Lewis & Bockius, LLP
    1701 Market Street
    Philadelphia, Pennsylvania 19103

14. THE FAIRNESS HEARING

    The Court will hold a Fairness Hearing to decide whether to approve the Settlement as fair, reasonable, and adequate. You may participate in the Fairness Hearing, which may be held telephonically or by video conference, and you may ask to speak, but you do not have to participate in the Fairness Hearing to have your objection considered. It is your obligation to ensure that your written objection is filed with the Court by no later than October 25, 2021

14. WHEN AND WHERE WILL THE COURT DECIDE WHETHER TO APPROVE THE SETTLEMENT?

    The Court will hold the Fairness Hearing at 9:30 a.m. on. November 22, 2021, at the United States District Court for the Eastern District of Pennsylvania, James A. Byrne United States Courthouse, 601 Market Street, Philadelphia, PA 19106 before the Hon. Timothy Rice, or such other courtroom as the Court may designate. The Court may adjourn the Fairness Hearing without further notice to the Settlement Class and also may schedule the hearing to be done by telephone or video conference. If you wish to participate you should confirm the date and time of the Fairness Hearing with Class Counsel before doing so. At that hearing, the Court will consider whether the Settlement is fair, reasonable, and adequate. If there are objections, the Court will consider them. The Court will also rule on the motions for attorneys’ fees and reimbursement of expenses and for Case Contribution Awards for the Named Plaintiffs. The Parties do not know how long these decisions will take or whether appeals will be filed.

15. DO I HAVE TO PARTICIPATE IN THE HEARING?

    No, but you are welcome to do so. If you file an objection, you do not have to participate in the Fairness Hearing to talk about it. As long as you mailed your written objection on time, it will be before the Court when the Court considers whether to approve the Settlement. You also may pay your own lawyer to participate in the Fairness Hearing, but such participation is also not necessary.

16. MAY I SPEAK AT THE HEARING?

    If you submit a written objection to the Settlement to the Court and counsel before the Court-approved deadline, you may (but do not have to) participate in the Fairness Hearing and present your objections to the Court. You may participate in the Fairness Hearing even if you do not file a written objection, but you will only be allowed to speak at the Fairness Hearing if you file a written objection in advance of the Fairness Hearing AND you file a Notice of Intention To Participate, as described in this paragraph. To do so, you must file with the Court a letter or other paper called a “Notice of Intention To Participate in Fairness Hearing in Crawford, et al., v. CDI Corporation, et al., No. 2:20-cv-3317-CFK (E.D. Pa.).” Be sure to include your name, address, telephone number, and your signature. Your Notice of Intention To Participate must be received by the attorneys listed in the answer to FAQ 13 above, no later than November 7, 2021 and must be filed with the Clerk of the Court at the address listed in the answer to FAQ 13.

17. IF YOU DO NOTHING

17. WHAT HAPPENS IF I DO NOTHING AT ALL?

    If you do nothing and you are a Settlement Class member, you will participate in the Settlement of the Action as described above in the Notice.

18. GETTING MORE INFORMATION

18. ARE THERE MORE DETAILS ABOUT THE SETTLEMENT?

    Yes. The Notice summarizes the proposed Settlement. The complete terms are set forth in the Settlement Agreement. You are encouraged to read the complete Settlement Agreement.

    DO NOT CONTACT THE COURT, THE CLERK’S OFFICE, THE COMPANY, OR DEFENDANTS REGARDING THIS NOTICE. THEY WILL NOT BE ABLE TO ANSWER YOUR QUESTIONS.