ERISA Class Action Review – 2025

scope of the class should not be expanded beyond the temporal scope of the class originally included in the complaint. Accordingly, the court granted the plaintiff’s motion for class certification on narrower grounds than sought in the Rule 23 motion. The plaintiff in Klawonn, et al. v. Board Of Directors For The Motion Picture Industries Pension Plans , 2024 U.S. Dist. LEXIS 33715 (C.D. Cal. Jan. 18, 2024), was a participant in the Motion Picture Industry Individual Account Plan (the Plan), who filed a class action alleging that the Board of Directors for the Motion Picture Industry Pension Plans (the Board) and 50 current or former members of the Board (Individual Directors) engaged in imprudent monitoring of the Plan in violation of the ERISA. The plaintiff asserted that the Board and Individual Directors made poor investment choices that affected the overall performance of the Plan. The plaintiff filed a motion for class certification, and the court granted the motion. The defendant argued that the diversity of participant portfolios and investment preferences meant that different members may have different outcomes depending on the investment strategy used, and therefore the class failed to meet the commonality requirement. The plaintiff asserted that the class met the commonality requirement because the alleged fiduciary breaches related to the management of a single pooled investment, impacting all participants similarly. The court agreed with the plaintiff. It determined that the key issue in the case is whether the defendants breached their fiduciary duties, which applied to all class members. The court also ruled that since the plaintiff’s claims involved injury to the Plan itself, the claims were typical of those of other participants. The court concluded that class treatment would be the best method to adjudicate the action, and that the plaintiff’s proposed class met the requirements of Rule 23(a) and Rule 23(b)(1). Accordingly, the court granted the plaintiff’s motion for class certification. In Parmenter, et al. v. Prudential Insurance Company Of America , 2024 U.S. Dist. LEXIS 150941 (D. Mass. Aug. 22, 2024), the defendants were able to defeat class certification by demonstrating plaintiffs’ failure to establish commonality. Id. at *4. There, the plaintiff sued on behalf of a putative class of insureds, alleging that Prudential breached its fiduciary duties to policyholders when it failed to receive approval from the Massachusetts Commissioner of Insurance before increasing its premiums, despite language in the plans’ terms saying that premium increases were “subject to the approval” of the Commissioner. Id. at *2-3. The plaintiff moved to certify the case as a class action and proceed with two overlapping putative classes, including a damages class and an injunctive relief class. Id. at *3. The district court denied the plaintiff’s motion for class certification based on a failure to demonstrate commonality. Id. at *4. The court emphasized that what really matters to class certification is the capacity of a class-wide proceeding to generate common answers. Id. at *5. Because the court found the “subject to” clause to be ambiguous in this case, it asserted that the question could not be answered universally for the classes. Id. Extrinsic evidence would need to be admitted to interpret this ambiguous term, and that extrinsic evidence would be different for different parties. Id. at *5-7. The court pointed out that different employer sponsors negotiated their plans at different times and might have had distinct views on the meaning of the “subject to” clause. Id. at *6. Parmenter shows that even if a common question exists among all the class members, class certification may be denied if adjudication of the class action will not arrive at a common answer for all class members. In short, where different evidence will be relevant to different class members’ claim, then class certification may be inappropriate. Davis, et al. v. Magna International of America, Inc. , 2024 U.S. Dist. LEXIS 13557 (E.D. Mich. Jan. 25, 2024), turned on the adequacy of representation prong of Rule 23(a). There, the plaintiffs initially failed to achieve class certification, but ultimately succeeded when they swapped class representatives. Id. at *5-9. The plaintiffs alleged that plan fiduciaries breached the duty of prudence by investing in poorly performing funds and by charging excess fees, which ultimately cost the plan and its participants millions of dollars. Id. The original named plaintiffs, however, failed to clear the low bar for adequacy because they had criminal records and did not appear to comprehend the nature of their claims. Id. at *5-6. When the new named plaintiffs who were more reputable and better-versed on the case took their place, the court allowed the action to proceed. Id. at *6-9. Although the defendants attempted to highlight the risks of intra-class conflict by pointing out that some members of the putative class had actually profited from their investments, the court rejected these arguments, noting that any potential relief would not require those members to disgorge their profits. Id. at *9-12. Finally, in Frankenstein, et al. v. Host International, Inc. , 2024 U.S. Dist. LEXIS 120678 (D. Md. July 10, 2024), the court denied class certification based on the conclusion that the plaintiff represented a so-called “class of one.” Id. at *32. There, the defendant was a national corporation that operates restaurants and bars, many of which are located in airports. Id. at *2. The company had a longstanding practice of paying out credit card tips in

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