I didn’t realize there was a lawsuit going on, but I guess it’s been lower-drama than the prior lawsuits.
After two years of litigation funded by the Conference of Consulting Actuaries (CCA), Judge Michael Mullen of the Circuit Court of Cook County, Illinois, entered summary judgment in the lawsuit in favor of the defendants—the Academy and current and former members of its Board of Directors. Judge Mullen found that the Academy Board had the authority to adopt a September 4, 2018, bylaws amendment that changed the membership of the Academy’s Selection Committee. Judgment was entered on March 15, 2021.
The Academy’s then-President Steve Alpert advised all Academy members by letter on September 7, 2018, of the bylaws amendment the Board adopted to change the composition of the Academy Selection Committee that appoints members of the Actuarial Board for Counseling and Discipline (ABCD) and the Actuarial Standards Board (ASB). Alpert explained the Board had adopted the amendment to maintain the independence and objectivity of the ASB and ABCD. Preserving that independence was and is vital to the public’s confidence in the U.S. actuarial profession’s ability to regulate itself through the two bodies, which are housed within the Academy.
On December 20, 2018, eight members of the Conference of Consulting Actuaries (CCA) filed a lawsuit in the Circuit Court of Cook County, Illinois, against every member then serving on the Academy Board of Directors. All but one of those eight plaintiffs were past, current, or future CCA presidents. The lawsuit sought a remedy to reinstate the CCA’s president and president-elect to the Academy Selection Committee and a judicial declaration that all actions taken by the Selection Committee after September 4, 2018, were null, void, and rescinded.
Earlier in the case, on June 19, 2019, Judge Mullen had dismissed the original Complaint on the basis that no injury to the Academy had been alleged and, therefore, a “derivative” cause of action on the Academy’s behalf was not alleged. The judge noted that the plaintiffs could refile an amended complaint to adequately plead a cause of action that alleged facts showing how the Academy was injured by the bylaws amendment.
On July 17, 2019, the same plaintiffs filed an amended derivative complaint in the same court. The defendants again moved to dismiss the amended complaint. The judge denied the motion, deciding to allow some discovery before ruling on the legal arguments raised in defendants’ second motion to dismiss. Over the following months, the Academy and the Board members responded to multiple discovery requests from the plaintiffs, including answering numerous interrogatories and requests to admit alleged facts, and producing approximately 200,000 pages of materials. Thereafter the parties briefed and argued cross-motions for summary judgment, which they agreed should be decided without any depositions being taken.
On March 4, 2021, Judge Mullen heard oral argument on the cross-motions for summary judgment. Ruling from the bench, the Judge granted our summary judgment motion and denied plaintiffs’ motion for summary judgment. Judge Mullen heard argument for about 45 minutes before issuing his ruling. Judge Mullen ruled in defendants’ favor, holding that the September 4, 2018, amendment to change the composition of the Selection Committee was within the Board’s amendment power under Article XV of the bylaws.
On March 15, 2021, the judge entered the formal Judgment Order resolving the lawsuit in favor of the individual Board member defendants and the Academy and against the plaintiffs.
As was communicated in September 2018, the bylaws amendment was adopted after a thorough and in-depth study of the functioning of the Selection Committee by the Academy’s Strategic Planning Committee, the Executive Committee, and the Board of Directors. Other alternatives had been examined and found not to address the issues identified.
The outcome of this lawsuit clearly finds that the Academy Board had the authority to act as it did, and this is a significant ruling in the state in which the Academy is incorporated as a not for profit organization.
As we noted in 2018, we continue to welcome the participation of all members of the actuarial profession in the ASB and ABCD processes. The Academy’s bylaws require that both entities serve the entire U.S. actuarial profession. Neither the ASB nor the ABCD can or should represent the commercial interests of any organization, employer, or individual, and the Academy remains fully committed to preserving their independence, as it is vital to the public’s confidence in the U.S. actuarial profession’s ability to regulate itself.
So, are we done with all the lawsuits between actuarial orgs?