Duane Morris Class Action Review - 2023 - Report - Page 203
TriNet III and TriNet IV were not typical of one another, and that the TriNet IV plaintiffs
could not satisfy the typicality requirement with respect to their claims challenging funds
in which they did not invest in their own plan. Id. at *20. The defendants sought to limit
the class to participants and beneficiaries of TriNet IV, and exclude any claims related
to the performance of funds that those putative class members never held.
Notwithstanding its decision on standing, the court agreed with the defendants that “the
TriNet IV plaintiffs are not typical representatives as to the TriNet III Plan” because none
“invested in any of the challenged funds in the TriNet III Plan” and there was “no overlap
between” the challenged funds in the two plans, which also “utilized different
recordkeepers operating under different contracts.” Id. at *20-23. For these reasons, the
court held there was “not a sufficient nexus between the TriNet IV plaintiffs’ claims” and
those of the “unnamed class members in the TriNet III Plan to satisfy the typicality
requirement” and the claims were “not based on similar enough facts” between the two
plans. Id. at *22-23. The court reached the opposite conclusion as to the TriNet IV
claims, concluding that the plaintiffs in that plan were typical representatives with
respect to that because their claims “and the claims of all participants in the TriNet IV
Plan are based on the same legal theory and underlying events.” Id. at *23-24.
Accordingly, the court held that the TriNet IV plaintiffs had met the typicality requirement
as to their claims regarding the TriNet IV Plan, but were not typical representatives as to
the TriNet III Plan and, as such, the court narrowed the certified class to include only
participants in the TriNet IV Plan. Id. at *24-25.
F.
Appellate Decertification Of ERISA Class Certification Orders
Among the more significant class action appellate decisions in 2022 is Haley, et al. v.
Teachers Insurance And Annuity Association Of America, 2022 WL 17347244 (2d Cir.
Dec. 1, 2022), in which the Second Circuit decertified a class of more than 200,000
participants.
There, the plaintiff alleged that a loan program defendant offered to her 403(b) defined
contribution retirement plan was a prohibited transaction under the ERISA and sought to
certify a class of approximately 8,000 employee benefit plans whose fiduciaries
contracted with the defendant to provide similar loan programs. The loan program
plaintiff challenged offered loans secured by plan participants’ retirement savings.
Though the defendant did not charge origination or maintenance fees for loans, it
earned money on the “spread” or difference between the amount of interest a
participant paid on the loan and the amount investment income derived from the
retirement investments used to secure the loan. Id. at *1-2. The plaintiff took several of
these loans and sought to hold the defendant liable as a non-fiduciary under the ERISA
who nevertheless knowingly participated in the alleged violations by her plan fiduciary.
The district court allowed the claims to proceed against the defendant as a nonfiduciary, and the plaintiff moved to certify the class. The defendant argued that the
loans challenged across the class were too disparate to warrant class treatment and
that the ERISA recognizes exemptions to prohibited transactions, but that the factors for
determining whether the subject loans were except were not subject to common proof.
Id. The district court nevertheless certified the class under Rule 23(b)(3) but “did not
make any findings about the purported variations among the loans in the putative class
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Duane Morris Class Action Review – 2023
