Nagy v. America
- Richard Seeborg
- 3:23-cv-05648
- U.S. District Court · Northern District of California
- 5
In Nagy v. CEP America, Judge Seeborg granted fees, expenses, and service awards after an employee-benefits class settlement.
The order affected the ERISA settlement class, class counsel, and the two class representatives, Daniel E. Nagy and Ms. Romero, by approving fees, expense reimbursement, and service awards.
What happened
In Daniel E. Nagy, et al. v. CEP America, LLC, et al., employees brought claims under the federal employee-benefits law known as ERISA concerning their 401(k) plan. The parties later reached a class settlement, and the plaintiffs asked for attorneys’ fees, expense reimbursement, and payments to the two class representatives.
The court granted the motion. It awarded class counsel $2,179,000 in attorneys’ fees and $13,775.84 for litigation expenses. It also awarded $10,000 to each of the two class representatives, for $20,000 total.
Judge Richard Seeborg found the awards reasonable based on the settlement’s benefits, the risks and work involved, comparable awards, and the attorneys’ lodestar calculation. He also ordered class counsel to submit a report within 60 days after distribution of the net settlement fund was completed.
The detailed version
- Nagy v. America · No. 3:23-cv-05648
- Richard Seeborg
- Oct. 17, 2025
Background
Plaintiffs, employees of MedAmerica, brought claims under the Employee Retirement Income Security Act (ERISA) against CEP America, LLC, also known as Vituity, and the MedAmerica Retirement and Benefits Committee. The claims concerned the 401(k) plan offered to employees. Plaintiffs alleged that the Company improperly paid itself administrative fees from employees’ retirement savings, allowed overcharges by the plan’s third-party recordkeeper, Schwab Bank, imprudently used Schwab Bank Savings Accounts despite alternatives with higher returns at comparable risk, and otherwise poorly managed the plan’s investments in violation of fiduciary duties.
In May 2024, the court granted the defendants’ motion to dismiss in part, disposing of claims concerning the Savings Account and payments made to Vituity. The parties conducted discovery on the surviving claims, then mediated and reached a settlement in December 2024. The court granted preliminary approval of the proposed class settlement in May 2025. The present order addressed the plaintiffs’ separate motion for attorneys’ fees, litigation expenses, and service awards; the opinion states that a separate motion sought final approval of the settlement.
Attorneys’ Fees
Under Federal Rule of Civil Procedure 23(h), a court may award reasonable attorneys’ fees and certain costs after a class has been certified. In a common-fund case, the court may calculate fees using either the lodestar method—reasonable hours multiplied by a reasonable hourly rate—or a percentage of the settlement fund.
The court awarded class counsel $2,179,000 in attorneys’ fees. The order describes this as 25% of the $8,750,000 settlement fund, less $13,775.84 in litigation expenses and $20,000 in service awards. The court found the fee reasonable based on the $8,750,000 cash payment to the class, which it described as 90% of the plan fees charged by the Company and 32% of maximum potential damages. The settlement also provided that defendants would not charge the plan for at least five years and that the Schwab Savings Account would be removed from the plan.
The court also considered the risks of proving breaches of loyalty and prudence and plan underperformance, the contingent nature of the representation, comparable percentage awards, and a lodestar cross-check. Class counsel reported spending 911.2 hours, with a lodestar of $830,052 using a national rate; the resulting multiplier was 2.6.
Litigation Expenses and Service Awards
The court found $13,775.84 in requested expenses reasonable and necessary. The expenses included travel, arbitrators and mediators, legal research fees, and court fees.
The court approved a $10,000 service award for each of the two class representatives. It stated that the awards compensated Mr. Nagy and Ms. Romero for two years of collaboration with class counsel and represented 0.02% of the settlement fund.
Disposition
The court granted the plaintiffs’ motion. It awarded class counsel $2,179,000 in attorneys’ fees and $13,775.84 for litigation expenses. It awarded the two class representatives $10,000 each, totaling $20,000. The court also ordered class counsel to submit a post-distribution report within 60 calendar days after completed distribution of the net settlement fund.
Read the full 5-page opinion on CourtListener, the free public archive maintained by the Free Law Project.