18th Annual Workplace Class Action Report - 2022 Edition

310 Annual Workplace Class Action Litigation Report: 2022 Edition (ii) Second Circuit Laurent, et al. v. PricewaterhouseCoopers LLC, 2021 U.S. Dist. LEXIS 188460 (S.D.N.Y. Sept. 30, 2021). Plaintiffs, a group of retirement plan participants, filed a class action against Defendants alleging breach of fiduciary duty in monitoring the plan in violation of the ERISA. The District Court previously had granted Plaintiffs’ motion for class certification pursuant to Rule 23 and subsequently granted Defendants’ motion for summary judgment on the grounds that § § 502(a)(1)(B) and 502(a)(3) of the ERISA did not provide the relief that Plaintiffs sought. On appeal, the Second Circuit vacated the District Court’s decision. It concluded that the ERISA authorizes the relief sought by Plaintiffs. After the appeal, Defendants thereafter moved to decertify the class, and the Court denied the motion. Defendants argued that reformation of the Plan under § 502(a)(3) would be inappropriate because it was a "preparatory" step for the "ultimate relief" of the recalculated benefits that Plaintiffs sought, not "final injunctive relief" as required pursuant to Rule 23(b)(2). Id . at *4-5. Defendants also asserted that since all members of the class had already cashed out of the plan, no class member had standing to reform a plan that no longer applied to them. Id . at *5. Defendants further contended that enforcement of the reformed Plan under § 502(a)(1)(B) would provide money damages and therefore also would not provide "final injunctive relief." Id . Finally, Defendants asserted that granting class certification for the enforcement of the reformed Plan impermissibly would preclude them from asserting individualized defenses. Id . The Court rejected Defendants first argument by noting that the Second Circuit has explicitly rejected the argument that "the only beneficiaries with standing to pursue reformation” of an ERISA-governed plan “are those that can prospectively benefit from a modification of plan terms, which does not include former employees." Id . at *8-9. The Court also dismissed the second argument by reasoning that the Second Circuit also had separately upheld both "the District Court’s reformation remedy and award of monetary damages . . . under Rule 23(b)(2 ). ” Id . at *10. Finally, the Court determined that Defendants asserted no viable statutory defenses. Id . at *11. Defendants argued that the Rules Enabling Act would be violated because their substantive rights to assert equitable defenses would be abridged if the class was not decertified. Id . The Court explained that equitable defenses were not like statutory defenses and thus their rights would not be violated if the class remained certified. Accordingly, the Court denied Defendants’ motion to decertify the class. Medical Society Of The State Of New York, et al. v. UnitedHealth Group, Inc., 2021 U.S. Dist. LEXIS 178847 (S.D.N.Y. Sept. 20, 2021). Plaintiff filed a class action seeking declaratory and injunctive relief that Defendant’s blanket policy of denying coverage of facility fees for office-based surgery ("OBS") providers violated the ERISA. The Court previously had granted Plaintiffs’ motion for class certification pursuant to Rule 23(b)(1) and Rule 23(b)(2). Defendant subsequently filed a motion to decertify the class action, which the Court denied. Defendant argued that the class should be decertified for several reasons, including: (i) certain class members no longer had Article III standing; (ii) the class no longer met the commonality requirement; and (iii) Plaintiff Columbia East Side Surgery, P.C. ("Columbia") was not an adequate representative for the class. Id. at *2-3. The Court rejected all of Defendant’s arguments. As to standing, Defendant argued that patients absolved by their healthcare provider of any out-of-pocket liability for OBS facility fees lacked standing to pursue claims for benefits under the ERISA. Id . at *4. The Court disagreed. It opined that Plaintiffs had standing even without suffering any monetary harm, as "the denial of plan benefits is a concrete injury for Article III standing even when patients were not directly billed for their medical services." Id . at *6. As to the Rule 23 requirements, Defendant argued that Plaintiffs failed to meet the commonality requirement because the common question of whether Defendant’s adoption of a blanket policy denying coverage of facility fees from OBS providers violated the ERISA was not central to the validity of each claim. Id . at *8. Defendant contended that the central question was whether each plan covered facility fees from OBS providers, which would require an individualized inquiry into each contract. The Court noted that Defendants wrongly assumed that to certify a class in the ERISA context, injunctive or declaratory relief must encompass the ultimate final relief for the class. Id . at *10. The Court concluded that the common question of whether Defendant’s standard practice of not covering OBS claims for facility fees was in violation of the ERISA applied to all class members. Defendant also contended that Plaintiff Columbia could not fairly and adequately represent the class because it sought monetary damages whereas other class members did not. The Court, however, explained that it already rejected the request to certify a damages class, and thus the only remedy sought by Columbia was for injunctive relief. For these reasons, the Court denied Defendant’s motion to decertify the class action.