Narrative Opinion Summary
This case involves the plaintiffs, trustees of ERISA pension benefit plans, who brought a breach of fiduciary duty claim against Nationwide Financial Services, Inc. and Nationwide Life Insurance Co. under ERISA. The plaintiffs alleged that Nationwide acted as a fiduciary and breached its duties by accepting revenue sharing payments from mutual funds. Initially, the class was certified under Rule 23(b)(2) in 2009, but following the Supreme Court's decision in Wal-Mart v. Dukes, the Second Circuit vacated the certification, directing reassessment under Rule 23(b)(3). The plaintiffs successfully renewed their motion for class certification under Rule 23(b)(3), demonstrating that common legal and factual questions predominated over individual issues. The court concluded that the commonality and typicality requirements were met, and that class-wide adjudication was superior to individual actions, considering the efficiency and fairness of a class action. The court's decision accounted for the procedural history, the impact of Wal-Mart on class certification standards, and the plaintiffs' fiduciary duty theories under ERISA, ultimately granting class certification for the claims to proceed collectively.
Legal Issues Addressed
Class Certification under Rule 23(b)(3)subscribe to see similar legal issues
Application: The court granted the plaintiffs' renewed motion for class certification under Rule 23(b)(3) after considering the predominance of common legal or factual questions over individual issues.
Reasoning: The plaintiffs have now successfully renewed their motion for class certification under Rule 23(b)(3).
Fiduciary Duty under ERISAsubscribe to see similar legal issues
Application: Plaintiffs argued that Nationwide acted as a fiduciary and breached its duties by receiving revenue sharing payments, necessitating proof that Nationwide's actions as a fiduciary violated ERISA provisions.
Reasoning: Plaintiffs argue that Nationwide acted as a fiduciary based on two theories: (1) the specific accumulation theory, wherein Nationwide... controlled a substantial amount of retirement contributions and received revenue sharing from mutual funds; and (2) the mutual fund selection theory...
Impact of Supreme Court Decision in Wal-Mart v. Dukes on Class Certificationsubscribe to see similar legal issues
Application: The decision in Wal-Mart v. Dukes prompted a reassessment of class certification, affecting the commonality requirement and the viability of certifying a class under Rule 23(b)(2) for claims seeking monetary relief.
Reasoning: The ruling emphasized a stricter interpretation of the commonality requirement under Rule 23(a)(2)... and narrowed the scope of Rule 23(b)(2), ruling that it does not permit class certification for claims seeking monetary relief unless such relief is incidental to injunctive or declaratory relief.
Predominance Requirement for Class Certification under Rule 23(b)(3)subscribe to see similar legal issues
Application: The court found that common questions of law or fact predominated over individual issues, supporting class-wide adjudication for the plaintiffs' ERISA claims.
Reasoning: The court reaffirms that Rule 23(b)(3) requires common questions to predominate, not exclusivity of common questions, and concludes that the plaintiffs meet the predominance requirement of Rule 23(b)(3) based on established findings from prior case law.
Role of Revenue Sharing in ERISA Fiduciary Breach Claimssubscribe to see similar legal issues
Application: The plaintiffs allege that Nationwide's acceptance of revenue sharing payments from mutual funds constituted a breach of fiduciary duty under ERISA, involving prohibited transactions.
Reasoning: They contend that Nationwide’s investment process and acceptance of these payments constituted breaches of fiduciary duties under ERISA.
Superiority Requirement for Class Actions under Rule 23(b)(3)subscribe to see similar legal issues
Application: Class-wide adjudication was deemed superior to individual lawsuits due to efficiency, fairness, and the absence of ongoing related litigation, satisfying Rule 23(b)(3) requirements.
Reasoning: The court found that the first three factors support class certification, as there is no evidence that class members favor individual lawsuits, no ongoing related litigation, and concentration in the current jurisdiction is appropriate.