Seems like we’ve written this before, but this time we (actually a federal district court) really means it:  the court in Lee v. Verizon granted last Friday Verizon’s motion to dismiss a class action lawsuit challenging its transfer in late 2012 of $7.5 billion of pension liabilities to Prudential (Lee v. Verizon, N.D. Tex.).  The court had dismissed the case once before but allowed the plaintiffs to amend their complaint.  This time, the court dismissed the amended complaint with prejudice, meaning that the court would not accept any further amendment to the complaint.

The court reiterated much of its prior ruling and made clear that ERISA permits an employer to decide, as settlor of a pension plan, to transfer assets and liabilities to an insurance company.  The court summed up the case as follows:

“It is apparent … that … plaintiffs fundamentally disagree with the premise that an ERISA pension plan can, as here, purchase an annuity to fund plan benefits and remove only some plan members, thereby eliminating the protections of ERISA and the PBGC for the removed members…. But at bottom, plaintiffs are disagreeing with the rights of a settlor under ERISA, and such a disagreement must be addressed to Congress through requests for legislative changes to ERISA, not through litigation that complains of the decisions that ERISA empowers a plan sponsor as settlor to make.”

Covington partners T.L. Cubbage, Jeff Huvelle, and Chris Pistilli represent Verizon in the litigation.