In re First American Corp. Erisa Litigation

263 F.R.D. 549, 47 Employee Benefits Cas. (BNA) 2192, 2009 U.S. Dist. LEXIS 53427, 2009 WL 1851308
CourtDistrict Court, C.D. California
DecidedJune 10, 2009
DocketNos. SACV 07-01357-JVS (RNBx), CV 07-07602; CV 07-07585, SACV 08-00110
StatusPublished
Cited by4 cases

This text of 263 F.R.D. 549 (In re First American Corp. Erisa Litigation) is published on Counsel Stack Legal Research, covering District Court, C.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re First American Corp. Erisa Litigation, 263 F.R.D. 549, 47 Employee Benefits Cas. (BNA) 2192, 2009 U.S. Dist. LEXIS 53427, 2009 WL 1851308 (C.D. Cal. 2009).

Opinion

Order Denying Plaintiffs’ Motion for Class Certification (fld 5-5-09) and Granting in Part and Denying in Part Defendants’ Motion for Review of Magistrate Judge’s March 25, 2009 Minute Order (Fld 4-13-09)

JAMES Y. SELNA, Judge.

Karla Tunis Deputy Clerk

Plaintiffs Denise Rogers (“Rogers”), Jennifer Easton (“Easton”), and David Hillert (“Hillert”) (collectively, the “Plan Participants”) seek class certification pursuant to Federal Rule of Civil Procedure 23. Defendants The First American Corporation (“First American”), et al. (collectively, the “First American Defendants”) oppose, and move the Court to reverse Magistrate Judge Robert N. Block’s (the “Magistrate Judge’s”) March 25, 2009 Minute Order (the “Minute Order”) as to certain requests for production, or, alternatively, to stay the Minute Order. The Plan Participants’ motion for class certification is DENIED, and the First American Defendants’ motion to reverse the Minute Order is GRANTED IN PART AND DENIED IN PART.

I. Background,

The Plan Participants are participants in or beneficiaries of the First American 401(k) retirement savings plan (the “Plan”), which is an “employee pension benefit plan” within the meaning of the Employee Retirement Income Security Act (“ERISA”). The Plan is a defined contribution plan, in which participants have individual accounts and select their investment fund from a variety of available options.

The Plan Participants’ consolidated complaint rests on the theory that the First American Defendants breached their fiduciary duties under ERISA by failing to prudently and loyally manage the Plan’s investment in the First American common stock fund (the “Fund”) by, inter alia, (1) continuing to offer the Fund as a Plan investment option when it was imprudent to do so; (2) maintaining the Plan’s preexisting heavy investment in the Fund when First American stock was no longer a prudent investment; and (3) investing the Plan’s assets in the Fund when First American stock was not a prudent investment.

The Plan Participants primarily seek relief under ERISA § 502(a)(2), 29 U.S.C. § 1132(a)(2), which permits a Plan participant to bring an action under ERISA § 409, 29 U.S.C. § 1109. Section 409 provides that a plan fiduciary who breaches his duty shall be personally liable to “make good to such plan any losses to the plan resulting from each such breach____” 29 U.S.C. § 1109(a).

In Massachusetts Mutual Life Insurance Co. v. Russell, 473 U.S. 134, 140, 105 S.Ct. 3085, 87 L.Ed.2d 96 (1985), the Supreme Court emphasized that the text of § 409(a) characterizes the relevant fiduciary relationship as one “with respect to a plan,” and repeatedly identifies the “plan” as the victim of any fiduciary breach. The Court concluded that “[a] fair contextual reading of the statute makes it abundantly clear that its draftsmen were primarily concerned with the possible misuse of plan assets, and with remedies that would protect the entire plan, rather than with the rights of an individual beneficiary.” Id. at 142, 105 S.Ct. 3085. In [554]*554LaRue v. DeWolff, Boberg & Associates, Inc., 552 U.S. 248, 128 S.Ct. 1020, 169 L.Ed.2d 847 (2008), the Court recognized that, in the defined contribution plan context, a plaintiff may also recover for an injury to his individual plan under § 502(a)(2).

This ERISA action is alleging breach of fiduciary duties that affected all participants in the Plan, rather than a single individual account. The Plan Participants move to certify the following class: “All persons who were participants in or beneficiaries of the ... Plan, at any time between April 1, 2006 and the present (the “Class Period”) and whose Plan accounts included investments in First American stock.”1 They seek certification under Rule 23(a) and (b)(1).

The Plan Participants have also sought merits-based discovery for this ERISA action. On October 7, 2008, they propounded sixty-seven production requests. The Magistrate Judge’s Minute Order partly granted their motion on March 25, 2009. First American now challenges twelve of these requests.

Presently before this Court are both the Plan Participants’ motion for class certification, as well as the First American Defendants’ motion to reverse the Minute Order. The Court considers each motion in turn.

II. Motion to Certify Class

A. Legal Standard

A motion for class certification involves a two-part analysis. First, the Plan Participants must demonstrate that the proposed class satisfies the requirements of Rule 23(a): (1) the members of the proposed class must be so numerous that joinder of all claims would be impracticable; (2) there must be questions of law and fact common to the class; (3) the claims or defenses of the representative parties must be typical of the claims or defenses of absent class members; and (4) the representative parties must fairly and adequately protect the interests of the class. Fed.R.Civ.P. 23(a).

Second, the Plan Participants must meet the requirements of at least one of the subsections of Rule 23(b). Here, the Plan Participants contend that they qualify under Rule 23(b)(1), which allows for certification if prosecuting separate actions by individual class members would create a risk of inconsistent or varying adjudications and establish incompatible standards for defendants, or when a judgment in one suit would be dispositive of the interests of the other class members who were not parties to the suit. Fed. R.Civ.P. 23(b)(1).

The Plan Participants must offer facts sufficient to satisfy the requirements of Rule 23(a) and (b). Doninger v. Pac. Nw. Bell, Inc., 564 F.2d 1304, 1308-09 (9th Cir.1977). In turn, this Court must conduct a rigorous analysis to determine whether the prerequisites of Rule 23 have been met. Gen. Tel. Co. v. Falcon, 457 U.S. 147, 161, 102 S.Ct. 2364, 72 L.Ed.2d 740 (1982). While the Court’s analysis must be rigorous, Rule 23 confers “broad discretion to determine whether a class should be certified, and to revisit that certification throughout the legal proceedings before the court.” Armstrong v. Davis, 275 F.3d 849, 872 n. 28 (9th Cir.2001).

In Falcon, the Supreme Court reiterated the well-recognized precept that “ ‘the class determination generally involves considerations that are enmeshed in the factual and legal issues comprising the plaintiffs cause of action.’ ” Falcon, 457 U.S. at 160, 102 S.Ct.

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263 F.R.D. 549, 47 Employee Benefits Cas. (BNA) 2192, 2009 U.S. Dist. LEXIS 53427, 2009 WL 1851308, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-first-american-corp-erisa-litigation-cacd-2009.