The Alaska Retirement Management Board sued Mercer for malpractice and fraud in its role as actuary to the pension and health care retirement plans for public employees and teachers in Alaska. Alaska alleged that Mercer grossly underestimated Alaska’s pension liabilities. Mercer responded that even if it made mistakes in its actuarial estimates, the Alaska retirement plans suffered no damages because actuarial estimates have no effect on the underlying liabilities of the plans. Lewis Clayton, Eric Stone, and Daniel Levi of Paul, Weiss, Rifkind, Wharton & Garrison LLP hired Compass Lexecon’s Daniel R. Fischel to testify on damages suffered by the plans. Professor Fischel and a team in Compass Lexecon’s Chicago office including David Gross and George Hickey rebutted Mercer’s arguments and estimated substantial damages from Mercer’s acts. Alaska and Mercer settled the case for $500 million – the largest settlement ever for a case of its kind.