18th Annual Workplace Class Action Report - 2022 Edition

312 Annual Workplace Class Action Litigation Report: 2022 Edition determined that Plaintiffs failed to meet the ascertainability and the commonality requirements of Rule 23(a). The District Court concluded that Plaintiff "failed to demonstrate that there exists a class of participants who have actually been harmed by the Aetna-Optum arrangement." Id . Regarding commonality, the District Court found that a proposed class challenging conduct that did not harm some proposed class members failed to establish commonality. The Fourth Circuit held that the District Court viewed the requirement of ascertainability and commonality too rigidly because the same harms that would support Plaintiff’s request for equitable relief regarding surcharge, disgorgement, and declaratory and injunctive actions may be cognizable and identifiable in the ascertainability context. Id . The Fourth Circuit opined that Plaintiff readily identified 87,754 persons who experienced charges of Optum’s administrative fee. The Fourth Circuit thus ruled that the District Court’s narrow focus on ascertainability., i.e., only through the lens of Plaintiff’s financial injury theory, constituted an abuse of discretion. Id . The Fourth Circuit also explained that Plaintiff’s proposed classes may be able to meet the commonality requirement when that requirement is re-examined based common issues of law and fact, including whether Aetna was a fiduciary; whether it breached its duties to plans and plan participants by directing Optum to bury its administrative fee in the claims process; and whether its breach amounted to a harm as to the particular plan and plan participants. For these reasons, the Fourth Circuit vacated and remanded the District Court’s order denying class certification. (v) Fifth Circuit Guenther, et al. v. BP Retirement Accumulation Plan, 2021 U.S. Dist. LEXIS 63660 (S.D. Tex. March 12, 2021). Plaintiffs, a group of participants in the BP America Retirement Accumulation Plan (the “RAP”), filed a class action alleging that Defendants made false or misleading statements about the RAP in violation of the ERISA. Specifically, Plaintiffs were employed by Standard Oil of Ohio (“SOHIO”) until Defendant BP North America acquired SOHIO in 1987. Prior to BP’s purchase of SOHIO, Plaintiffs were participants in the Sohio heritage retirement plan, but after the purchase, Defendants transitioned Plaintiffs into the BP America Inc. Retirement Plan (the “ARP”). Shortly thereafter, Defendants amended their retirement plan (which was renamed as the “RAP”) so that it would determine participants’ benefits using a single cash balance formula rather than a final average pay formula. According to Plaintiffs, Defendants then told the former SOHIO heritage plan participants “that the RAP would be as good as, or better than, the ARP, and that [Defendants] bore all the risks of the RAP.” Id. at *2. After being unsatisfied with the RAP, Plaintiffs filed their class action on the grounds that Defendants’ statements were false or misleading. Plaintiffs moved for class certification pursuant to Rule 23, which the Court granted. Defendants contended that Plaintiffs’ proposed class was not sufficiently ascertainable because it would be difficult to determine the differences between benefits under the ARP and the RAP. Id. at *8. The Court rejected this argument. It held that future benefit calculations would not render Plaintiffs’ proposed class unascertainable because Plaintiffs sought equitable reformation of the RAP that, at the class certification stage, was not hindered by future benefit calculations. Defendants also argued that Plaintiffs did not satisfy the numerosity prong of Rule 23, since they merely offered an “unsupported guess at the number of potential class members.” Id. at *12. The Court found, however, that Plaintiffs offered several documents in support of their purported class size, including an email from Defendants stating that the “SOHIO heritage issues” impacted approximately 2,000 people. Id. The Court further reasoned that Plaintiffs offered several common questions of fact, such as whether Defendants’ uniformly disseminated communications violated the ERISA and whether Plaintiffs were entitled to equitable relief in the form of plan reformation. Moreover, because Plaintiffs’ claims arose from the same conduct, i.e. , Defendants’ allegedly false and misleading statements regarding the RAP, the Court also determined that Plaintiffs satisfied the typicality requirement. As to the adequacy of representation, the Court opined that Plaintiffs served to protect the interests of the class by sitting for depositions and dedicating significant time to the litigation. The Court also noted that Plaintiffs’ counsel zealously pursued Plaintiffs’ interests for more than four years and displayed extensive experience in litigating ERISA class actions. Finally, the Court certified Plaintiffs’ class pursuant to Rule 23(b)(2) given that Plaintiffs sought equitable relief flowing from the same alleged company-wide misrepresentations by Defendants. Accordingly, the Court granted Plaintiffs’ motion for class certification. (vi) Sixth Circuit No reported decisions.