ERISA CLASS ACTION SURVEY

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					ERISA CLASS ACTION SURVEY
                               By Gerald L. Maatman, Jr., Ian H. Morrison and Diane M. Soubly




                                                  I. Introduction

                                                  Class action settlements and decisions in 2008 under
                                                  the Employee Retirement Income Security Act, 29
                                                  U.S.C. § 1001 et seq. (ERISA), significantly impacted
   Gerald L. Maatman, Jr. is a part-              the direction of ERISA litigation. Among the more
   ner of Seyfarth Shaw LLP, the leading          closely watched ERISA class actions, courts confronted
   national employment and labor law              class certification issues in cases involving challenges to
   firm. Mr. Maatman is resident in the            continued employer stock investments in 401(k) defined
   firm’s Chicago and New York offices.             contribution pension plans and employee stock owner-
   Mr. Maatman has a primary emphasis             ship plans (ESOP’s).
   in his practice on defending employers            Courts also have continued to split on whether
   sued in employment-related class actions       Plaintiffs who have received lump-sum distributions
   and EEOC pattern or practice lawsuits          have standing to sue under ERISA, whether cash
   brought in federal and state courts            balance plans are inherently age-discriminatory, and
   throughout the United States.                  whether employers may modify retiree health benefits.
                                                  Significant litigation also ensued for U.S.-based auto
   Ian H. Morrison is a partner with the          companies saddled with “legacy costs,” which have
   Chicago office of Seyfarth Shaw LLP             negotiated funding for court-approved transfers of
   where he practices labor and employ-           retiree liabilities and retiree benefits administration to
   ment law. He represents employers in           voluntary employee benefit associations (VEBAs) under
   cases brought under various laws affect-       separate plans. Plaintiffs also have filed repeated class
   ing employment , with a focus on defense       actions challenging the reasonableness of investment
   of claims under the Employee Retirement        management and other fees against some of the nation’s
   Income Security Act of 1974 (ERISA). He        largest 401(k) retirement savings plans.
   has represented employers in numerous
   federal courts, at all court levels and all    II. Cases Certifying Or Refusing To Certify
   stages of proceedings, including signifi-       ERISA Class Actions
   cant trial and appellate work.
                                                  A. First Circuit
   Diane M. Soubly, an attorney with
   Seyfarth Shaw, has represented employ-         In Re Boston Scientific ERISA
   ers, plans and fiduciaries for 25 years in      Litigation, 2008 U.S. Dist. LEXIS 94794
   ERISA litigation, litigation risk reduction,   (D. Mass. Nov. 3, 2008).
   ERISA administrative proceedings, labor
   and employment litigation, agency pro-         In this fiduciary breach action alleging that Defendants
   ceedings, and appellate litigation.            Boston Scientific Corp. and fiduciaries of the Boston
                                                  © Gerald L. Maatman, Jr., Ian H. Morrison and Diane M. Soubly
                                                                                                                  41
ERISA CLASS ACTIONS


Scientific 401(k) Retirement Savings Plan (the         these issues with the benefit of this new case
“Plan”) continued to permit investment in             law authority and acknowledging that Plaintiffs
company stock despite their knowledge that            had statutory standing, the Court found that
the stock price was artifi cially infl ated, the        the remaining two Plaintiffs nonetheless had
Court denied class certification, finding that the      no constitutional standing to sue for fiduciary
remaining two of four original named Plaintiffs       breach. As the Court reasoned, Article III
lacked injury-in-fact and therefore lacked Ar-        standing requires: (1) injury-in-fact, (2) caused
ticle III standing to sue under ERISA. Plaintiffs     by fiduciary breach, and (3) redressable by the
and other participants in the Plan could select       Court in the ERISA action. The Court chose, as
from ten different investment options, only one       the appropriate measure of loss, the price of the
of which was the Boston Scientifi
				
DOCUMENT INFO
Description: Class action settlements and decisions in 2008 under the Employee Retirement Income Security Act, 29 U.S.C. Section 1001 et seq. (ERISA), significantly impacted the direction of ERISA litigation. Among the more closely watched ERISA class actions, courts confronted class certification issues in cases involving challenges to continued employer stock investments in 401(k) defined contribution pension plans and employee stock ownership plans (ESOP's). Several class action settlements are presented. In this fiduciary breach action alleging that Defendants Boston Scientific Corp and fiduciaries of the Boston Scientific 401(k) Retirement Savings Plan continued to permit investment in company stock despite their knowledge that the stock price was artificially inflated, the Court denied class certification, finding that the remaining two of four original named Plaintiffs lacked injury-in-fact and therefore lacked Article III standing to sue under ERISA.
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