18th Annual Workplace Class Action Report - 2022 Edition

356 Annual Workplace Class Action Litigation Report: 2022 Edition the 2016 regulation was that Congress rejected the notion that CalSavers should be automatically exempt from an ERISA preemption analysis. Nothing about the repeal gave any definitive answer on whether the ERISA preempts programs like CalSavers. Further, even if ERISA’s safe harbor did not apply to CalSavers, the Ninth Circuit reasoned that it still needed to determine whether CalSavers otherwise qualified as an ERISA program. In considering this question the Ninth Circuit concluded that CalSavers was not an ERISA plan because it is established and maintained by the State, and not employers. California does not employ CalSavers participants, who were by definition not governmental employees. California was thus not "acting directly as an employer" through CalSavers or the CalSavers Trust. Id. at *25. Furthermore, the Ninth Circuit rejected Plaintiffs’ contention that CalSavers forced employers to create ERISA plans because it was the employer’s initial decision not to offer a tax-qualified retirement savings program that then required it to comply with CalSavers. While Plaintiffs’ lack of a retirement plan made it subject to CalSavers, it did not follow that Plaintiffs "established or maintained" an ERISA plan, and therefore the law did not require employers to operate their own ERISA plans. Id . at *27. Having concluded that CalSavers was not an ERISA plan and did not require employers to establish or maintain one, the Ninth Circuit analyzed whether CalSavers otherwise “relates to” ERISA benefit plans because it has a forbidden “reference to" or “connection with” such plans. On that issue, the Ninth Circuit concluded that CalSavers did not have an impermissible reference to or connection with the ERISA, and nor did CalSavers interfere with the ERISA’s core purposes. For these reasons, the Ninth Circuit held that the ERISA did not preempt the California law. Accordingly, the Ninth Circuit affirmed the judgment of the District Court in favor of the State. (xv) Preemptive Motions In ERISA Class Actions Cho, et al. v. Prudential Insurance Co. Of America , 2021 U.S. Dist. LEXIS 185397 (D.N.J. Sept. 27, 2021). Plaintiff brought a putative class action under the ERISA, alleging that fiduciaries of the Prudential Employee Savings Plan (the "Plan") breached their duties of prudence and loyalty, engaged in prohibited transactions, and breached their monitoring duties. Defendants moved to dismiss Plaintiff’s complaint pursuant to Rule 12(b)(1) for lack of standing and Rule 12(b)(6) for failure to state a claim upon which relief could be granted. The Court granted Defendants’ motions to dismiss pursuant to Rule 12(b)(6). As to standing, the Court concluded that Defendants had mounted a factual attack on Plaintiff’s standing to bring his claims. Because the Court dismissed Plaintiff’s claims on other grounds, it did not reach a definitive ruling on Plaintiff’s standing to bring the ERISA claims. The individual Defendants argued that Plaintiff’s claims against them should be dismissed as an impermissible group pleading because Plaintiff failed to specify the wrongful conduct that each engaged in for purposes of the specific ERISA violations. The Court agreed that Plaintiff’s claims broadly attributing misconduct to all "Defendants" did not satisfy the basic pleading requirement to provide adequate notice to each Defendant of the specific claims against him. Thus, the Court dismissed Plaintiff’s claims against the individual Defendants. Plaintiff had made a separate accusation that the Plan’s online participant portal contained significant amounts of erroneous data that rendered it difficult for participants to make investment decisions. The Court found that Plaintiff’s allegations as to Prudential’s online portal were not sufficiently pled. Likewise, as to Plaintiff’s claim of breach of fiduciary duties of prudence and loyalty, the Court opined that Plaintiff had provided nothing more than conclusory assertions that the Prudential Defendants breached their duty to prudently and loyally select and maintain the plan’s mix and range of investment options. Likewise, as to duty of loyalty, the Court held that Plaintiff’s complaint consisted of conclusory allegations that were insufficient to suggest that the Prudential Defendants acted with an improper motive or for their financial benefit. For similar reasons, the Court concluded that Plaintiff failed to adequately allege that the Prudential Defendants engaged in a prohibited transactions. For these reasons, the Court granted Defendants’ motion to dismiss Plaintiff’s complaint in its entirety pursuant to Rule 12(b)(6). Nixon, et al. v. Anthem, Inc., 2021 U.S. Dist. LEXIS 168382 (E.D. Ky. Sept. 3, 2021). Plaintiffs, a group of health plan participants, filed a class action alleging that Defendants improperly denied medical coverage for minimally invasive sacroiliac joint fusion surgery (“MISIJF”) as "investigational and not medically necessary" despite approval by the FDA and widespread performance of the surgery. Id . at *1-2. Defendants moved the strike the class allegations on the grounds that: (i) Plaintiffs’ proposed class definition was flawed; (ii) Plaintiffs could not establish commonality; (iii) Plaintiffs could not satisfy Rule 23(b); and (iv) Plaintiffs’ putative class sought to include individuals who lacked standing. The Court found that Plaintiffs’ class had standing, as all the Plans were administered by Defendants and added as necessary parties, and that the potential class