ERISA Class Action Review – 2025

rule is that a putative class of 40 or more individuals presumptively satisfies the numerosity requirement. Id. In Luense , there were over 8,000 401(k) participants, so the court concluded that numerosity was easily shown. Id. at *10. The commonality standard requires plaintiffs to demonstrate that there are common questions of law and fact. Id. at *11-12. In Luense this standard was met because the claims of all members of the putative class centered on the same decisions made by the same people with the same effects. Id. Finally, the court held that the named plaintiffs were adequate representatives because their interests did not conflict with other members of the putative class and because they had retained experienced counsel. Id. at *19-20. The court also held that the proposed class was certifiable under Rule 23(b)(1) because separate actions could lead to inconsistent rulings or substantially impair the interests of absent class members. Id. at *21-22. Accordingly, the court granted the plaintiffs’ motion for class certification. Id. at *22. Luense is a highly typical case that demonstrates the ease with which plaintiffs in ERISA cases generally are able to achieve class certification. Nonetheless, there are exceptions to this rule, and in 2024, there were a number of cases in which defendants successfully opposed Rule 23 certification. In Zimmerman, et al. v. Cedars-Sinai Medical Center , Case No. 23-CV-1123 (C.D. Cal. Dec. 18, 2024), the plaintiffs filed a class action alleging the defendants violated their fiduciary duties under the ERISA in managing the employees’ 401(k) plan by: (i) allowing the Plan to pay excessive fees to service providers; (ii) investing in costly share classes; (iii) retaining underperforming funds; and (iv) keeping a high-cost, high-risk stable value fund. The plaintiffs filed a motion for class certification, and the court denied the motion. The court ruled that the plaintiffs failed to meet the typicality requirement of Rule 23(a). The court ruled that, with the exception of individuals who invested in the Stable Value Fund, the plaintiffs could not demonstrate that their claims were typical to those of other class members who may have paid excessive recordkeeping fees or invested in high- expense share class funds. Regarding the recordkeeping fees claim, the court determined that the plaintiffs failed to show actual injury, as they paid fees lower than the $42 per participant rate they consider reasonable. From 2017 to 2022, the plaintiffs paid fees ranging from $22.10 to $38.31, well below the alleged reasonable fee. As a result, the court concluded that the plaintiffs could not demonstrate harm from excessive recordkeeping fees. Additionally, the court was not convinced that the plaintiffs' claims arose from the same course of events as those of the rest of the class. The allegations regarding the Stable Value Fund, in which the plaintiffs invested, differed significantly from those related to other challenged funds, such as the revenue- sharing funds. The court found that the factual bases for the claims against the Stable Value Fund were distinct from those for the other funds, and the plaintiffs failed to proffer evidence to suggest that the alleged deficiencies in the defendants’ evaluation process were the same across all funds. For these reasons, the court denied the plaintiffs’ motion for class certification. Lucero, et al. v. Credit Union Retirement Plan Association , 2024 U.S. Dist. LEXIS 5329 (W.D. Wis. Jan. 9, 2024), was an interesting case where class certification failed precisely because the 401(k) plan at the center of the dispute did not operate like many other such plans. Id. at *1-2. Rather than uniformly imposing recordkeeping fees, the plan allowed individual employer participants to negotiate their fees. Id. at *2. As the court explained, claims related to excessive fees are suitable for class certification in most ERISA cases because fees are typically charged to all participants using the same formula. Id. at *1. However, in this case, instead of applying a set fee schedule for all plan participants, individual employers were allowed to negotiate their own fees with the recordkeeper, thereby resulting in disparate fees among the potential class members. Id. at *2. In fact, three out of the four named plaintiffs admitted that the fees that their employer had negotiated were reasonable. Id. The court denied class certification, holding that the proposed class failed to meet the commonality, typicality, and adequacy requirements of Rule 23(a). Id. at *10-14. The court noted that the defendants’ alleged conduct harmed some participants and helped others, and thus the differences in harm among participants prevented the class from meeting the necessary criteria for certification. Id. at *14-15. The court also reasoned that all the plaintiffs were not adequate representatives of individuals employed by different employers because they paid different fees. Id. at *18-19. The court subsequently denied the plaintiffs’ motion for reconsideration in Lucero, et al. v. Credit Union Retirement Plan Association , 2024 U.S. Dist. LEXIS 31455 (W.D. Wis. Feb. 22, 2024). In McDonald, et al. v. Laboratory Corp. Of America Holdings , 2024 U.S. Dist. LEXIS 188739 (M.D.N.C. Oct. 17, 2024), the plaintiff, a current employee of LabCorp and participant in the Laboratory Corp. of America Holdings Employees’ Retirement Plan (the Plan), alleged that LabCorp breached its fiduciary duty under the ERISA as a

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