Statement from the American Academy of Actuaries to its members regarding recent litigation

 

September 17, 2009

As you may have read, on September 1, 2009, Bruce D. Schobel filed a lawsuit against the Academy in the United States District Court for the District of Columbia seeking, in part, to overturn the August 5 decision of the Academy's board of directors to remove him from a leadership position. The Academy contested his claims. On Tuesday, September 15, Judge Emmet Sullivan denied Mr. Schobel's motion for a temporary restraining order which sought to reinstate him to his former position. Judge Sullivan's ruling included a finding that Mr. Schobel had not shown a substantial likelihood of success on the merits of his claim that he had been improperly removed from his position as president-elect. The court has not yet set a schedule for further proceedings in the case.*

In addressing this matter, the Academy has made every effort to protect the long-term best interest of the organization and the profession, and to be sensitive to the interests of the individuals involved. In doing so, it has chosen to remain largely silent on the matter. Our leadership regrets that this has resulted in confusion and frustration for some of our members.

The Academy is now in a position to share certain facts that have become a matter of public record. In July, 19 past presidents of the Academy expressed concerns to the Academy's board of directors about the suitability of having Mr. Schobel continue to serve as president-elect. The Academy board is responsible for decisions affecting appointment and removal of officers. Accordingly, on August 5, the Academy's board of directors met to consider the matter. During the course of the discussion, various board members shared additional views relating to Mr. Schobel's suitability to lead the Academy. The board of directors carefully evaluated the situation and voted for a change in future leadership--creating a vacancy in the office of president-elect. Mr. Schobel participated in the board's discussion and vote. The board's vote was 17 in favor of removal, nine against, and one abstention. The vacancy was not immediately announced in hopes that the parties could reach an amicable resolution.

On August 27, Academy President John Parks announced that he had asked the Academy's Nominating Committee to select a candidate to fill the vacancy in the office of the President-Elect. The members of the Nominating Committee are Steve Lehmann, Chairperson, Bill Bluhm, Vice Chairperson, John Parks, Tom Finnegan, Roger Hayne, Mike McLaughlin, Larry Sher, and Cande Olsen, a regular member of the Academy's Board selected by Mr. Parks.

The Academy then and now believes the board's decision to be both valid and in the best interest of the organization. It has detailed its explanation in pleadings submitted to the court. Additional details will be forthcoming when appropriate. In the meantime, day-to-day operations at the Academy continue to focus on its mission and goal to serve the public on behalf of the U.S. actuarial profession.

The court has set a hearing on the Preliminary Injunction for October 15 (updated September 18, 2009).