Duane Morris Class Action Review - 2023 - Report - Page 202
Turning to the Rule 23(a) requirements, the court rejected the defendants’ arguments
that the plaintiffs’ claims otherwise lacked typicality “because putative class members
made different investment decisions, which resulted in different management and
administrative fees.” Id. at *34. Explaining that typicality does not require representative
and class claims to involve the same facts, law, or a uniform damages analysis, the
court found the typicality requirement satisfied because the plaintiffs’ claims arose “from
the same alleged misconduct by the defendants towards the putative class members
and are based upon the same legal theories concerning alleged breaches of fiduciary
duties.” Id. at *34-36. Similarly, that the plaintiffs and absent class members were
invested in the Plan during different periods and may have experienced different gains
and losses was insufficient to create conflicts rendering the plaintiffs inadequate class
representatives under Rule 23(a) because such differences would “be resolved at the
damages stage rather than class certification” and the claims otherwise challenged the
same conduct as producing common, class-wide injuries.
The court found that the other requirements of Rule 23(a) were met and found class
certification appropriate under Rule 23(b)(1)(A) and 23(b)(1)(B) to avoid the risk of
subjecting the defendants to incompatible standards of conduct and ensure protection
of absent class members interests. For these reasons, the court granted the plaintiffs’
motion and certified the class as modified to exclude absent class members who
invested exclusively in unchallenged funds.
By comparison, in Huang, et al. v. Trinet HR III Inc., 2022 U.S. Dist. LEXIS 192525
(M.D. Fla. Oct. 21, 2022), the court granted class certification, but narrowed the
proposed class. The plaintiffs, participants in one of two professional employer
organization (PEO) sponsored 401(k) plans, TriNet III and TriNet IV, brought a putative
class action against the defendants (the PEOs and their Boards of Directors) alleging
they breached their fiduciary duties by maintaining overpriced or underperforming
investment options in the plans and by failing to monitor or control the plans’
recordkeeping expenses. The plaintiffs originally sought to certify a class of all persons
who had participated in either of the plans during the class period. Opposing the motion,
the defendants first challenged the named plaintiffs’ standing with respect to the TriNet
III plan because only one had invested in it but not in any of the funds challenged in the
complaint. With respect to the excessive fees claim, the same plaintiff had actually paid
lower annual fees than the plaintiffs’ expert asserted were reasonable. As such, the
court agreed that the plaintiff lacked standing on any claim and dismissed her from the
action. Id. At *9-11. Nevertheless, the court held that the remaining named plaintiffs had
standing to pursue claims with respect to both plans despite being participants only in
the TriNet IV plan. The court explained that, because the remaining plaintiffs had
invested in challenged funds in the TriNet IV plan and paid allegedly excessive fees,
they had demonstrated an injury-in-fact. Because they alleged that were injured by the
“defendants’ general practices affecting all plans” in the same manner as all other
participants in both plans, they had standing to pursue claims on behalf of both plans.
Id. at *12-14.
Turning to certification and the requirements of Rule 23(a), the defendants focused on
challenging typicality. Specifically, the defendants argued that the claims involving
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Duane Morris Class Action Review – 2023
