The opinion
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
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IMRAN KHAN, et al.,
Plaintiffs,
ORDER
v.
20-CV-07561 (PMH)
BOARD OF DIRECTORS OF PENTEGRA
DEFINED CONTRIBUTION PLAN, et al.,
Defendants.
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RICHARD GREENBERG, et al.,
Plaintiffs,
v.
BOARD OF DIRECTORS OF PENTEGRA
DEFINED CONTRIBUTION PLAN, et al.,
Defendants.
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PHILIP M. HALPERN, United States District Judge:
On September 15, 2020, Imran Khan and Joan Bullock, individually and as representatives
of a class of participants and beneficiaries on behalf of the Pentegra Defined Contribution Plan for
Financial Institutions (the “Khan Plaintiffs”) commenced an action against the Board of Directors
of Pentegra Defined Contribution Plan, John Does 1-12, Brad Elliott, William E. Hawkins, Jr.,
George W. Hermann, Michael N. Lussier, Sandra L. McGoldrick, Pentegra Retirement Services,
Inc.,1 John E. Pinto, and Lisa A. Schlehuber (“Defendants”) (the “Khan Case”). (Doc. 1). The
Khan Plaintiffs are represented by Schlichter Bogard & Denton, LLP (the “Schlichter Firm”).
1 On October 16, 2020, the Court “So Ordered” the parties’ stipulation by which, inter alia, Defendants
consented to the Khan Plaintiffs filing an Amended Complaint to correct the name of this defendant to
Pentegra Services, Inc. (Doc. 40). That Amended Complaint was filed on October 23, 2020. (Doc. 53).
On October 13, 2020, Richard Greenberg, Gregory S. Digsby, Lindsey Clark, and Chrystal
Lewis, individually and on behalf of all others similarly situated (the “Greenberg Plaintiffs”)
commenced an action against some, but not all, of the Defendants in the Khan Case (the
“Greenberg Case”). (Greenberg Doc. 1).2 The Greenberg Plaintiffs are represented by Capozzi
Adler, P.C. (the “Capozzi Firm”).
On November 20, 2020, Defendants filed letters seeking the consolidation of the Khan
Case and the Greenberg Case. (Doc. 56; Greenberg Doc. 25). On November 23, 2020, Defendants
filed a letter seeking a pre-motion conference in connection with an anticipated motion to dismiss
the Khan Case (Doc. 59), and on November 25, 2020, the Khan Plaintiffs filed a letter in opposition
thereto (Doc. 65). The Khan Plaintiffs also filed a letter opposing Defendants’ request to
consolidate the Khan Case and the Greenberg Case (Doc. 64), as well as a motion to appoint the
Schlichter Firm as interim lead class counsel (Doc. 60; Doc. 61, “Schlichter Br.”). On November
27, 2020, the Greenberg Plaintiffs filed their response to Defendants’ request to consolidate,
advising of their position that consolidation of the two cases would be appropriate. (Greenberg
Doc. 28). The Greenberg Plaintiffs also sought the Court’s permission to move for the appointment
of the Capozzi Firm as interim lead class counsel. (Id.). On December 3, 2020, with permission
from the Court, the Capozzi Firm filed a letter in opposition to the Schlichter Firm’s motion to be
appointed interim lead class counsel. (Greenberg Doc. 32).
On December 11, 2020, the Court held a pre-motion telephone conference to discuss
Defendants’ request to consolidate, the Schlichter Firm’s pending motion, the Capozzi Firm’s
anticipated motion, and Defendants’ anticipated motion to dismiss. The Court construed
Defendants’ pre-motion letter for permission to move for consolidation as a motion to consolidate,
2 References herein to documents filed in the Greenberg Case shall be cited as “Greenberg Doc.”
and having considered the written responses thereto by the Khan Plaintiffs and the Greenberg
Plaintiffs, and the parties’ arguments at the conference, the Court granted consolidation, directed
the filing of a Consolidated Amended Complaint, and directed Defendants to, after receipt of the
Consolidated Amended Complaint, file a new pre-motion conference letter, advise the Court if
they intended to press their original pre-motion conference letter, or file an answer. (Doc. 72). The
Court also set a briefing schedule for the Capozzi Firm to move for appointment as interim lead
class counsel or co-counsel, as well as opposition to the motions. (Id.).
On December 18, 2020, the Greenberg Plaintiffs filed their cross-motion (Doc. 73; Doc.
73-1, “Capozzi Br.”); and on December 28, 2020, Defendants filed their opposition to the
competing motions (Doc. 75) and the Khan Plaintiffs filed their opposition to the Greenberg
Plaintiffs’ motion (Doc. 76). The Khan Plaintiffs and Greenberg Plaintiffs filed their Consolidated
Amended Complaint on December 28, 2020 (Doc. 74), and on January 11, 2021, Defendants
advised that they sought to press their motion to dismiss on the grounds stated in their earlier letter,
as well as on additional grounds (Doc. 79). On January 19, 2021, the Schlichter Firm filed a
response to Defendants’ letter (Doc. 80). It does not appear that the Capozzi Firm filed a response
to Defendants’ pre-motion letters. The Court held a pre-motion telephone conference on February
16, 2021, granted Defendants leave to file a motion to dismiss, and set a briefing schedule for such
motion. (See Feb. 16, 2021 Min. Entry).
Ripe for this Court’s review are the competing motions to be appointed as interim lead
class counsel filed by the Schlichter Firm and the Capozzi Firm. Federal Rule of Civil Procedure
23 (“Rule 23”) requires a court to determine at an “early practicable time” whether to certify a
class and, if so, to appoint class counsel. “Because representation of a putative class prior to the
filing of a motion for class certification is sometimes necessary, Rule 23(g)(3) permits a court to
appoint interim class counsel.” Anderson v. Fiserv, Inc., No. 09-CV-8397, 2010 WL 571812 at *2
(S.D.N.Y. Jan. 29, 2010).
In selecting interim class counsel, courts have looked to the criteria for determining the
adequacy of class counsel set forth in Rule 23(g)(1)(A), which include: (i) the work counsel has
done in identifying or investigating potential claims in the action; (ii) counsel’s experience in
handling class actions, other complex litigation, and the types of claims asserted in the action; (iii)
counsel’s knowledge of the applicable law; and (iv) the resources counsel will commit to
representing the class. See e.g. In re Bank of Am. Corp. Secs., Derivative & ERISA Litis., 258
F.R.D. 260, 272 (S.D.N.Y. June 30, 2009); In re HSBC Bank USA, N.A., Debit Card Overdraft
Fee Litig., No. 12-CV-5696, 2013 WL 3816597, at *10-13 (E.D.N.Y. July 22, 2013).
If only one applicant seeks appointment as class counsel, a court must determine whether
the applicant is “adequate” under Rule 23(g)(1) and Rule 23(g)(4), which requires that counsel
“fairly and adequately represent the interests of the class.” However, faced with competing
“adequate” applicants, “the court must appoint the applicant best able to represent the interests of
the class.” Rule 23(g)(2) (emphasis added).
Although the Capozzi Firm argued alternatively that it should be appointed as interim co-
counsel with the Schlichter Firm (Capozzi Br. at 15-18), both the Schlichter Firm and Defendants
objected to any co-counsel relationship. (See Doc. 75 at 1-5; Doc. 76 at 18-21). The Court finds
that due to the “fundamental historical and philosophical differences” between the two firms (Doc.
76 at 5), and as evidenced by the competing motions herein, a co-counsel relationship would be
inefficient; thus, appointing a single firm best serves the interests of judicial economy while
protecting the interests of the putative class.
Based upon the information provided by counsel in the competing submissions, the Court
finds that both firms have devoted substantial time and effort to identifying and investigating the
claims raised herein. In addition, both firms have significant experience with complex class action
litigation, and each possess knowledge of the applicable law.
As to the Capozzi Firm’s willingness to commit resources to represent the proposed class,
it states that it “has the ability and willingness to expend the financial and manpower resources
necessary to prosecute this litigation,” and their “Fiduciary Practice Group is comprised of three
partners, . . . two associates, and five support staff” (Capozzi Br. at 13), but beyond the five lawyers
it indicates are in the Fiduciary Practice Group, the Capozzi Firm would avail itself also of the
services of other attorneys in their Pennsylvania offices (id.). The Schlichter Firm, on the other
hand, “has a fully dedicated team of [thirteen] attorneys . . . in the [Schlichter Firm’s] retirement
litigation practice group.” (Schlichter Br. at 21). For these reasons, the Court finds that the
Schlichter Firm has greater attorney resources in the particular practice area to represent the class
in this consolidated action. In addition, the Court notes that only the Schlichter Firm responded to
Defendants’ pre-motion letters (Docs. 65, 80), signifying that they have already begun to prepare
to defend against Defendants’ forthcoming motion to dismiss.
Considering the totality of the circumstances, the Court concludes that the Schlichter Firm
is the more appropriate choice to serve as interim lead class counsel, in light of the number of
attorneys dedicated to 401k excessive fee litigation who are committed to work on this matter, and
the fact that the Schlichter Firm handled the precatory work in connection with the anticipated
motion to dismiss by Defendants.
CONCLUSION
Based upon the foregoing, the Schlichter Firm’s motion to be appointed as interim class
counsel is GRANTED and the Capozzi Firm’s cross-motion to be appointed interim class counsel
or co-counsel is DENIED.
The Court therefore Orders that Schlichter Bogard & Denton, LLP is appointed as
interim class counsel under Federal Rules of Civil Procedure 23(g)(2) and (3).
The Clerk of the Court is respectfully directed to terminate the pending motion (Doc. 60).
SO ORDERED:
Dated: White Plains, New York
February 18, 2021 ( k 7
PHILIP M. HALPERN
United States District Judge