Participants in former employer’s defined contribution plan sued plan fiduciaries under ERISA for the alleged retention of more expensive and underperforming funds despite the availability of lower cost funds, failing to monitor excessive record keeping and administrative costs and fees, offering an excessively expensive menu of investment options, and failing to monitor their appointees. The participants moved for class certification, which was granted, over the defendants’ arguments that individualized defenses under ERISA Section 404(c), potentially differing limitations periods, and typicality concerns regarding the named plaintiffs’ investments in different funds, precluded certification.
“Courts in our Circuit have consistently found the potential applicability of the section 404(c) defense does not defeat class certification because, if applicable, the defense would defeat claims on a class-wide basis.” After a lengthy discussion of the U.S. Fifth Circuit’s decision in Langbecker v. Electric Data Systems Corporation, 476 F.3d 299 (5th Cir. 2007), and a number of cases, particularly within the Third Circuit, that have been decided since, the Court concluded that: “Consistent with several district court decisions after Langbecker, we also conclude the potential applicability of the section 404(c) defense does not defeat commonality or typicality. The claims here focus on Fiduciaries’ plan-wide conduct rather than on the investment decisions of individual plan participants. The evidence required to establish the applicability of the section 404(c) defense likewise hinges on the Plan rather than on individual Plan participants. The defense would not be unique to the Participants or other Class members and instead would apply to defeat the claims on a class-wide basis.”
With respect to the defendants’ statute of limitations argument, the Court held: “We conclude the Fiduciaries cannot defeat class certification based solely on their speculative theory individualized statute of limitations issues may arise as to the Participants or putative Class members. The Fiduciaries establish only the Participants received or had access to Plan-wide communications. This is insufficient under Intel Corporation Investment Policy Committee v. Sulyma, 140 S.Ct. 768 (2020) to demonstrate statute of limitations issues exist or they will become a major focus of the litigation. Even if such issues do arise, they likely cannot defeat the many common legal and factual issues described above underlying the Participants’ claims based on plan-wide conduct.
“The Fiduciaries finally argue the Participants’ claims are atypical of the claims of putative Class members because the Participants only invested in a few of the many investment options available to Plan participants. The Fiduciaries’ argument misses the mark. The focus of the Participants’ claims is on the Fiduciaries’ conduct as to all Plan participants rather than about the individual investment choices made by Participants and putative Class members. As we explained in our decision denying the Fiduciaries’ motion for partial dismissal, the Participants’ claims primarily involve allegedly imprudent decision-making processes as to the Plan as a whole. The Participants’ claims, challenging uniform conduct across the Plan, are typical of the claims of putative Class members. The varying choices of the Participants and putative Class members may result in varying levels of recovery, but that inquiry is beyond the scope of class certification.”
Boley v. Universal Health Services, No.20-2644, 2021 WL 859399 (E.D.Pa. March 8, 2021).
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