CalPERS and Colorado PERA File Motion to Protect Shareowner Rights
May 24, 2019
Communications & Stakeholder Relations
Contact: Megan White, Information Officer
(916) 795-3991 - email@example.com
SACRAMENTO, Calif. – CalPERS and the Colorado Public Employees' Retirement Association (Colorado PERA), together with more than $400 billion under management, jointly filed a motion to intervene in a lawsuit to protect investors' right to pursue federal securities claims against Johnson & Johnson in court.
The suit, initiated by a single Johnson & Johnson shareowner and being heard in the U.S. District Court of New Jersey, demands that Johnson & Johnson allow shareowners to vote on whether all future securities claims brought against the company for corporate wrongdoing are handled through arbitration, rather than in court. If successful, the suit could lead to the end of shareowner securities class action cases against the company.
"As an active shareowner, CalPERS works diligently to preserve our rights, including maintaining access to the court system when such a step is needed," stated Marcie Frost, CalPERS Chief Executive Officer. "We are committed to the long-term health and good governance of companies as we seek strong returns to ensure the retirement security of our members."
CalPERS and Colorado PERA's motion seeks to join the case in support of Johnson & Johnson management. Johnson & Johnson opposes the effort to force all cases into arbitration, on grounds that it illegally eliminates shareowners' right to file class action lawsuits against the corporation when a company engages in securities fraud.
The pension funds argue that forced arbitration denies shareowners the right to protect their investments in court. In addition, arbitration clauses would limit public disclosures of settlements and reduce transparency. Class action securities litigation is a fundamental right that ensures shareowners have the ability to seek judicial redress when a company engages in securities fraud.
CalPERS and Colorado PERA worked together to file the motion to protect their sizable investment in Johnson & Johnson and to set a precedent so similar actions are not taken at other corporations. Both pension funds seek to protect their investments and thereby the pensions of their millions of members.
For more than eight decades, CalPERS has built retirement and health security for state, school, and public agency members who invest their lifework in public service. Our pension fund serves more than 1.9 million members in the CalPERS retirement system and administers benefits for more than 1.5 million members and their families in our health program, making us the largest defined-benefit public pension in the U.S. CalPERS' total fund market value currently stands at approximately $361 billion. For more information, visit www.calpers.ca.gov.
About Colorado PERA
Colorado PERA provides retirement and other benefits to more than 600,000 current and former teachers, State Troopers, corrections officers, snow plow drivers, and other public employees who provide valuable service to all of Colorado.