18th Annual Workplace Class Action Report - 2022 Edition

Annual Workplace Class Action Litigation Report: 2022 Edition 357 representatives demonstrated an injury-in-fact that was fairly traceable to the actions of Defendants. Further, Defendants argued that the class as defined included health plans with varying limitation periods and accrual rules, which would require individual inquiries into the rules and limitations of each plan. Id. at *14. However, the Court opined that under applicable Sixth Circuit precedent for § 1132(a)(1)(B) claims, the “ERISA does not explicitly provide a limitations period” and case law authorities have filled “the statutory gap using federal common law" and look to the state’s most analogous statute of limitations. Id. Therefore, the Court would not have to "examine every plan’s limitation and accrual rules" to determine the applicable limitation period. Id . at *15. The Court also determined that the class definition was readily ascertainable by reference to objective criteria. Defendants argued that Plaintiffs could not satisfy the commonality requirement because: (i) the standard of review required on individualized inquiries; (ii) the determination of whether denial of MISIJF violated a particular class member’s plan required individualized analysis of the terms of each plan; (iii) factual questions about the state of medical science regarding MISIJF were not common to the class as a whole; and (iv) the challenged medical policy had changed over time and was therefore not common to the class. Id . at *17. The Court disagreed. It reasoned that Plaintiffs alleged a uniform practice across the plans, and Defendants failed to show how even if different standards of review applied, this would contravene the commonality requirement. Finally, the Court ruled that given the Sixth Circuit’s general admonition to defer class certification determinations until after discovery, Defendants’ motion to strike must be denied. (xvi) Releases Issues In ERISA Class Actions Alfonso, et al. v. Cumulus Media, 2021 U.S. Dist. LEXIS 212933 (N.D. Ga. Oct. 15, 2021). Plaintiff, a participant in Defendant’s 401(k) Plan ("Plan"), filed a class action alleging that Defendant breached its fiduciary duties to the Plan participants by only offering an investment menu composed of unduly expensive mutual funds and failing to monitor or control the allegedly excessive compensation paid to the Plan’s record-keeper in violation of the ERISA. Defendant filed a motion to dismiss based on a release contained in Plaintiff’s Confidential Separation Agreement ("Agreement") with the Defendant. Id . at *2. The Court granted the motion. The Agreement acknowledged the termination of Plaintiff’s employment, released Defendant from all claims held by Plaintiff, and provided Plaintiff with four weeks’ severance pay at his current salary rate. The release provision stated that in signing, Plaintiff relinquished "any claim or right based upon or arising under . . . [the ERISA]," including the specific "claims for breach of fiduciary duty.” Id . at *5. The Court held that Plaintiff thereby released his ability to bring ERISA claims on behalf of the Plan. The Court reasoned that Plaintiff’s ability to bring the action arose directly from his rights as a Plan participant under the ERISA, which he released in signing the Agreement. The Court also determined that the Agreement was clear and unambiguous, Plaintiff was provided ample time to review and sign the agreement, and he received valuable consideration as part of the Agreement (specifically, four weeks of severance pay totaling $6,550.80). Id . at *11-12. The Court ruled that Plaintiff knowingly and voluntarily entered into the Agreement with Defendant. Accordingly, the Court granted Defendant’s motion to dismiss. (xvii) Selection Of Lead Counsel In ERISA Class Actions Khan, et al. v. Board Of Directors Of Pentegra Defined Contribution Plan , 2021 U.S. Dist. LEXIS 31207 (S.D.N.Y. Feb. 19, 2021). A group of participants and beneficiaries on behalf of the Pentegra Defined Contribution Plan for Financial Institutions (the "Khan Plaintiffs") filed a class action against Board of Directors of Pentegra Defined Contribution Plan, John Does 1-12, Brad Elliott, William E. Hawkins, Jr., George W. Hermann, Michael N. Lussier, Sandra L. McGoldrick, Pentegra Retirement Services, Inc., John E. Pinto, and Lisa A. Schlehuber ("Defendants") (the "Khan Case"). Id . at *1-2. The Khan Plaintiffs were represented by Schlichter Bogard & Denton, LLP (the "Schlichter Firm"). Thereafter, another group ("Greenberg Plaintiffs") commenced an action against most of the Defendants in the Khan Case (the "Greenberg Case"). Id . at *2-3. The Greenberg Plaintiffs were represented by Capozzi Adler, P.C. (the "Capozzi Firm"). Defendants filed letters seeking the consolidation of the Khan Case and the Greenberg Case. The Khan Plaintiffs filed a letter in opposition to the consolidation, or if the Court did consolidate, to appoint the Schlichter Firm as interim lead class counsel. The Greenberg Plaintiffs sought the Court’s permission to move for the appointment of the Capozzi Firm as interim lead class counsel. The Court determined that due to the "fundamental historical and philosophical differences" between the two firms, a co-counsel relationship would be inefficient; and therefore, appointing a single firm would best serve the interests of judicial economy while protecting the interests of the putative class. Id . at *7.