Justia Class Action Opinion Summaries

Plaintiffs David McCorkle and William Pender appealed a district court order dismissing two of their class action claims against Bank of America Corporation for alleged violations of certain provisions of the Employment Retirement Income Security Act of 1974 (ERISA). Their claims centered on the Bank's use of a normal retirement age (NRA) that allegedly violated ERISA in calculating lump sum distributions and further ran afoul of ERISA's prohibition of "backloading" the calculation of benefit accrual. Upon review, the Fourth Circuit agreed with the district court's conclusion that Plaintiffs failed to state a claim upon which relief could be granted, and it affirmed the district court's judgment to dismiss those claims. View "Pender v. Bank of America Corp." on Justia Law

In a class action under ERISA, the district court partially decertified the class, 3000 to 3500 members (57 to 71 percent). Plaintiffs appealed under Rule 23(f), which authorizes a court of appeals to “permit an appeal from an order granting or denying class-action certification.” After holding that an order materially altering a previous order granting or denying class certification is within the scope of Rule 23(f), the Seventh Circuit denied the appeal for failure to satisfy the criteria for a Rule 23(f) appeal. View "Matz v. Household Int'l Tax Reduction Inv. Plan" on Justia Law

Plaintiffs claimed that the fiduciaries of their retirement plan violated the Employment Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq., in ways that damaged their efforts to stockpile savings for their winter years. The court held that because plaintiffs have not pleaded facts establishing that defendants abused their discretion by following the Plan's directions, they have not stated a valid claim for breach of the duty of prudence. The court also held that plaintiffs have failed to state a viable breach of loyalty claim. Accordingly, the court affirmed the district court's dismissal of plaintiffs' third and last amended complaint. View "Lanfear, et al. v. Home Depot, Inc., et al." on Justia Law

Plaintiffs appealed from the judgment of the district court dismissing as time-barred their putative class action complaint against their former employer and the employer's pension plan for benefits alleged to be due under the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. 1001 et seq. Plaintiffs asserted that the district court erred when it looked past the six-year New York limitations period for contract actions; applied part of the New York regime known as the "borrowing statute," which directed it to Pennsylvania law; and ruled that Pennsylvania's four-year limitations period barred plaintiffs' claims. The court held that in an action for benefits under 29 U.S.C. 1132, the court applied the forums state's statute of limitations, including its borrowing statute. Therefore, the district court was correct in applying New York's borrowing statute and plaintiffs' claims were untimely under Pennsylvania law. View "Muto, et al. v. CBS Corp." on Justia Law

This appeal and cross-appeal concerned the pension benefits owed to plaintiff, a retired carpenter, and members of a class he purported to represent. Plaintiff asserted that the pension fund was guilty of seven violations of the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq., and sought declaratory and injunctive relief. The court agreed with the district court that defendants' interpretations of certain plan language was arbitrary and capricious and therefore affirmed the district court's award of summary judgment to plaintiff on his individual claims for miscalculation of pension benefits. The court concluded, however, contrary to the district court, that the six-year statute of limitations applicable to plaintiff's and each other putative class member's ERISA claims began to run when each pensioner knew or should have known that defendants had miscalculated the amount of his pension benefits, and that he was being underpaid as a result. Therefore, the court vacated the district court's judgments certifying the plaintiff class, granting summary judgment to the class, and granting prejudgment interest to the class members. The court remanded for further factfinding with regard to when each putative class member became, or should have become, aware of his alleged injury so as to begin the running of the statute of limitations as applied to him.

Plaintiffs appealed from a decision granting defendants' motion to dismiss plaintiffs' complaints for failure to state a claim upon which relief could be granted. Plaintiffs, participants in two retirement plans offered by defendants, brought suit alleging breach of fiduciary duty under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq. Plaintiff alleged that defendants acted imprudently by including employer stock as an investment option in the retirement plans and that defendants failed to provide adequate and truthful information to participants regarding the status of employer stock. The court held that the facts alleged by plaintiffs were, even if proven, insufficient to establish that defendants abused their discretion by continuing to offer plan participants the opportunity to invest in McGraw-Hill stock. The court also held that plaintiffs have not alleged facts sufficient to prove that defendants made any statements, while acting in a fiduciary capacity, that they knew to be false. Accordingly, the judgment was affirmed.

Plaintiffs, participants in retirement plans offered by defendants and covered by the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq., appealed from a judgment dismissing their ERISA class action complaint. Plan documents required that a stock fund consisting primarily of Citigroup common stock be offered among the plan's investment options. Plaintiffs argued that because Citigroup stock became an imprudent investment, defendants should have limited plan participants' ability to invest in it. The court held that plan fiduciaries' decision to continue offering participants the opportunity to invest in Citigroup stock should be reviewed for an abuse of discretion and the court found that they did not abuse their discretion here. The court also held that defendants did not have an affirmative duty to disclose to plan participants nonpublic information regarding the expected performance of Citigroup stock and that the complaint did not sufficiently allege that defendants, in their fiduciary capacities, made any knowing misstatements regarding Citigroup stock. Accordingly, the court affirmed the judgment.

When an employee left the company in 1997, took a $47,850 lump sum distribution of his pension. He later believed that the payment should have included the present value of future cost of living adjustments that would have been included had he received his pension as an annuity. In 2002, he filed a class action suit. The district court granted summary judgment on liability in favor of the class and the Seventh Circuit affirmed, holding that a COLA is an accrued benefit, as defined in ERISA, 29 U.S.C. 1002(23)(A). Before the district court ruled, the parties reached a settlement that each early retiree would receive roughly 3.5% of her original lump sum, unless the COLA on a normal-retirement-age-based annuity outweighed her early-retirement subsidy, a rare situation. The district court approved the proposed settlement and awarded attorney's fees. Objectors were not allowed to opt out. The Seventh Circuit affirmed, upholding determinations that the settlement was reasonable; that class counsel had adequately represented the early retirees and that further subclasses were unnecessary; that opt-out should be denied; and concerning attorney fees.

The district court certified a class action and a proposed class in an action under the Employee Retirement Income Security Act, 29 U.S.C. 1001. The suit claimed that Blue Cross breached its fiduciary duty by imposing and failing to disclose an other-than-group subsidy and that the OTG subsidy violated Mich. Comp. Laws 550.1211(2). The state insurance commissioner took the position that state law allows the assessment and that revenue it generates funds Medigap coverage. The Sixth Circuit reversed, holding that the class action is not the superior method of adjudication (Federal Rule of Civil Procedure 23(b)(3)) and prosecuting separate actions does not present the risk of inconsistent adjudications (FRCP 23(b)(1)(A)). ERISA fiduciary status is a crucial threshold factual issue specific to every class member, requiring the court to make individualized determinations. Resolution of the legality of the subsidy before that determination would also mitigate the state's concerns about stopping collection of the fee. Potential awards at stake would not preclude individual class members from seeking relief and there was no evidence that individual litigation would create a risk of inconsistent adjudications that would establish incompatible standards of conduct for the defendant.

Petitioners Wayne Tomlinson, Alice Ballesteros and Gary Muckelroy appealed the dismissal of their claims against El Paso Corporation and the El Paso Pension Plan (collectively "El Paso") brought under the Age Discrimination in Employment Act (ADEA) and the Employee Retirement Income Security Act (ERISA). Plaintiffs' claims concern "wear-away" periods that occurred during El Paso's transition to a new pension plan. They contended that the wear-away periods violated the ADEA's prohibition on age discrimination and the anti-backloading and notice provisions of ERISA. The trial court found that El Paso's transition favored, rather than discriminated against, older employees; and the plan was frontloaded rather than backloaded. Accordingly, the Tenth Circuit's review concluded that ERISA did not require notification of wear-away periods so long as employees were informed and forewarned of plan changes. The Court affirmed the lower court's decision dismissing Petitioners' claims.