Central District Certifies ERISA Class

by charlesjung

Retirement
Image by scottwills via Flickr

Judge Stephen V. Wilson of the Central District of California certified an ERISA class in Tibble, et al. v. Edison International, et al., No. CV 07-5359 SVW (AGRx), 2009 WL 6764541 (C.D. Cal. June 30, 2009).  Plaintiffs brought a class action pursuant to ERISA § 502(a)(2) & (3) to recover for alleged breaches of fiduciary duties with respect to the Edison 401(k) Savings Plan (the “Plan”).

Plaintiffs allege that certain defendants breached their fiduciary duties to the Plan by (1) engaging in prohibited transactions in violation of ERISA § 406; (2) breach of the duty of loyalty in violation of ERISA § 404(a)(1) (A); (3) breach of the duty of prudence in violation of ERISA § 404(a)(1)(B); and (4) violation of the terms of the Plan documents in violation of ERISA § 404(a)(1)(D). (SAC ¶ 105.)

Plaintiffs sought certification of the following class:

All persons, excluding the Defendants and other individuals who are or may be liable for the conduct described in this Complaint, who were or are participants or beneficiaries of the Plan and who were, are, or may have been affected by the conduct set forth in this Complaint, as well as those who will become participants or beneficiaries of either Plan in the future.

Id. *1.

Plaintiffs primarily sought certification under Rule 23(b)(1), which states that a class may be certified if prosecuting separate actions would create a risk of:

(A) inconsistent or varying adjudications with respect to individual class members that would establish incompatible standards of conduct for the party opposing the class; or (B) adjudications with respect to individual class members that, as a practical matter, would be dispositive of the interests of the other members not parties to the individual adjudications or would substantially impair or impede their ability to protect their interests.

Id. *7 (citing Fed. R. Civ. P. 23(b)(1)).

“Courts have noted that ‘ERISA [fiduciary litigation] … presents a paradigmatic example of a(b)(1) class.'” Id. (quoting In re Global Crossing Sec. & ERISA Litig., 225 F.R.D. 436, 453 (S.D.N.Y. 2004) and In re Elec. Data Sys. Corp. ERISA Litig., 224 F.R.D. 613, 628 (E.D.Tex. 2004)).

In addition to damages, Plaintiffs sought substantial equitable relief, including disgorgement of all property that Defendants obtained by virtue of their breaches of fiduciary duty. Id. *8.  But the court held that the “injunctive relief sought in this case is not merely a request for injunctive relief masquerading as one for money damages. The requested injunctive relief poses a very real possibility that, in the event Plaintiffs are successful, equitable relief will be granted. As a result, unlike Zinser, Defendants face more than just the risk that separate judgments would oblige Defendants to pay damages to some class members but not to others or to pay them different amounts.” Id. *9.  “If other Plaintiffs were allowed to bring suit on their own behalf, other courts could very well mandate different conduct. The risk of inconsistent courses of conduct being imposed is significant and of the variety that Rule 23(b)(1)(A) was designed to address.”  Id.

Thus, the Court found that class certification is appropriate under 23(b)(1), and certified a class defined as:

All persons, excluding the Defendants and other individuals who are or may be liable for the conduct described in this Complaint, who were or are participants or beneficiaries of the Plan and who were, are, or may have been affected by the conduct set forth in the Second Amended Complaint.

By CHARLES H. JUNG

Advertisements