A federal appeals court has ruled that a lower court did not have jurisdiction under the Federal Arbitration Act to confirm tens of millions of dollars in arbitration awards to employees of Kansas City-based DST Systems Inc.
The ruling could throw the retirement plans of hundreds of employees at DST into limbo.
Citing a recent U.S. Supreme Court opinion limiting federal courts’ jurisdiction under the arbitration law, the 8th U.S. Circuit Court of Appeals held that the employees had not established an independent basis for jurisdiction.
The court sent back the cases — 177 altogether — to determine whether the lower court has the authority to confirm each individual case.
The DST employees claimed that DST, a financial and health care services company, had concentrated “an enormous and imprudent” amount of its 401(k) plan in the stock of Valeant Pharmaceuticals, now known as Bausch Health Companies Inc. When that stock’s price plummeted in 2016 from $258 per share to $15 per share, the plan sustained nearly $400 million in losses.
In 2020, Valeant paid a $45 million penalty to settle charges by the Securities and Exchange Commission that it had engaged in “...
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