Duane Morris ERISA Class Action Review – 2024

appropriate because of the allegations of breach of fiduciary duty against a large class of participants in violation of the ERISA was the sort of allegation the Advisory Committee intended to be certified under Rule 23. Id. at *6 (citing Fed. R. Civ. P. 23(b)(1)(B) Advisory Committee ’ s Note, 1966 amendments). For these reasons, the court granted the plaintiffs’ motion for class certification. The court certified the plaintiffs’ requested class over the defendants’ objections of lack of adequacy of representation and typicality in Cho, et al. v. The Prudential Insurance Co. Of America, Case No. 19-CV- 19886 (D.N.J. Aug. 29, 2023). The plaintiffs, a group of 401(k) plan participants, filed a class action alleging that the defendant violated the ERISA by including underperforming investments in the plan. The plaintiffs also asserted that the defendant used an investment tool that analyzed a participant ’ s age and risk tolerance to help them make financial decisions, but that the tool was more beneficial to the defendant than the plan participants because it directed participant investments into the defendant ’ s own products. The plaintiffs filed a motion for class certification pursuant to Rule 23, and the court granted the motion. The defendants argued that the named plaintiff was not an adequate class representative because he did not personally invest in all of the investment funds he targeted in his complaint or the investment assistant tool. However, the court found that the representative plaintiff could adequately represent the class because the harm was caused by the defendants’ practices, which were not fund-specific but instead affected various funds. The defendants separately argued that individualized assessments would be required to determine which plan participants used the investment assistant tool. The plaintiffs argued that there was a common thread of injury across all class members based on the defendants’ decision to include certain funds. The plaintiffs also contended that the investment assistant tool used a standard protocol to determine how participants should invest that was by age and risk level, and thus the common standard could be applied class-wide. The court agreed with the plaintiffs and determined that commonality existed because the question of whether the defendants breached their fiduciary duty was uniform. The court opined that the case turned on the common questions in typical ERISA cases, i.e., “whether the defendants were fiduciaries … whether the defendants breached their duties to the Plan … and whether the Plan suffered losses as a result of the defendants’ breaches.” Id. at 9 (citing In Re Schering Plough Corp. ERISA Litigation, 589 F.3d 585, 596-97 (3d Cir. 2009)). The court concluded that the plaintiffs presented a common issue of fact and law in their allegations that the defendants breached their fiduciary duties through inclusion of underperforming investments and utilization of a self-dealing investment tool. Furthermore, the court found typicality because the question of whether there was a breach of a fiduciary duty was focused on the defendant ’ s conduct typical to all injuries, regardless of which particular fund a given class member selected. The court therefore found class certification appropriate under Rule 23(b)(1) because individual actions could lead to inconsistent results. Thus, the court certified a class consisting of over 45,000 members who participated in the plan since Nov. 13, 2019, including beneficiaries of those who died during the class period. Courts will conduct their own evaluations on motions for class certification in the absence of opposition from the defendants. For example, in Placht, et al. v. Argent Trust Co., 2023 U.S. Dist. LEXIS 63169 (N.D. Ill. Apr. 11, 2023), the court granted class certification after conducting an independent Rule 23 analysis even though the defendants did not oppose certification. There, the plaintiff filed a putative class action under the ERISA alleging the defendants violated their fiduciary duties by overpaying for a particular set of shares. The plaintiff filed a motion for class certification pursuant to Rule 23, which the court granted. The court determined that there were common questions as to whether and how the defendants breached their fiduciary duties to the Plan and whether the Plan participants were thereby damaged because the question of whether the defendants were imprudent in purchasing the relevant shares would determine the outcome of the case for all of the class members. Id. at *6. The court found that the plaintiff met the typicality requirement because the claim arose under the same theory of breach of fiduciary duty in violation of the ERISA and from the same allegedly imprudent transaction. The court also found that the plaintiff and plaintiff ’ s counsel met the adequacy requirement because the plaintiff shared the interest of all class members. Finally, the court concluded that the case was appropriate for class certification under Rule 23(b)(1) because, given that the recovery of these claims were relevant to the plan more than the individual plaintiffs, the individual plaintiffs’ adjudication outcomes would be dispositive of other plaintiffs.

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