The ERISA Litigation team recently secured denial of a motion to certify a class in a case in which two named plaintiffs alleged that Stadion Money Management, LLC (Stadion) violated certain provisions of ERISA based on its provision of managed account services to certain ERISA retirement plans whose plan sponsors or responsible plan fiduciaries selected Stadion’s service for their individual plans. The plaintiffs sought to certify two classes consisting of individual plan participants who participated in approximately 1,650 different 401(k) plans administered by United of Omaha Life Insurance Company. Stadion is a portfolio company of longtime client TA Associates.
Goodwin successfully argued that class certification of a proposed class implicating over 1,650 different 401(k) plans was not viable due to differences between each plan’s terms, coverage, investment lineups, anticipated risk, and other issues specific to the individual plans and participants included in plaintiffs’ putative class definitions.
The United States District Court for the District of Nebraska (Court) denied the motion to certify a class, and found that plaintiffs failed to sustain their burden to show that a class action is warranted under Rule 23. Specifically, the Court found that plaintiffs failed to satisfy Rule 23(a)’s requirements of commonality and typicality, nor did they show predominance or superiority as required under Rule 23(b)(3). Notably, the Court held that it cannot determine whether and to what extent Stadion breached any fiduciary duty under ERISA with common proof, as the question would turn on individualized facts and circumstances such as each plan’s terms, coverage, and investment lineups, and each plan sponsor’s anticipated participant risk tolerance. Additionally, the Court held that resolution of plaintiffs’ claims through a class action would create case management issues and would be an inefficient allocation of judicial resources given the individualized nature of the claims. Following the Court’s denial of plaintiffs’ class certification motion, the case was voluntarily dismissed with prejudice.
Established in 1993, Stadion Money Management is an independent firm headquartered near Athens, Georgia. Stadion works with financial professionals and recordkeepers to build custom retirement plan and participant level investment solutions. As of April 30, 2021, Stadion managed approximately $3.1 billion.
TA Associates is a leading global growth private equity firm. Focused on targeted sectors within five industries – technology, healthcare, financial services, consumer and business services – the firm invests in profitable, growing companies with opportunities for sustained growth, and has invested in more than 550 companies around the world. TA has raised $47.5 billion in capital since its founding in 1968.
The case is Davis v. Stadion Money Management, LLC, No. 8:19-cv-556, in the District of Nebraska. Read the decision.