Plaintiffs claim that Lockheed breached its fiduciary duty to its retirement savings plan, under the Employee Retirement Income Security Act, 29 U.S.C. 1132(a)(2). The Plan is a defined-contribution plan, (401(k)); employees direct part of their earnings to a tax-deferred savings account. Participants may allocate funds as they choose. Among the investment options Lockheed offered was a “stable-value fund” (SVF). SVFs typically invest in a mix of short- and intermediate-term securities, such as Treasury securities, corporate bonds, and mortgage-backed securities. Holding longer-term instruments, SVFs generally outperform money market funds. For stability, SVFs are provided through “wrap” contracts with banks or insurance companies that guarantee the fund’s principal and shield it from interest-rate volatility. Plaintiffs allege that the Lockheed SVF was heavily invested in short-term money market investments, with a low rate of return that did “not beat inflation by a sufficient margin to provide a meaningful retirement asset.”
The district court granted Lockheed summary judgment with respect to some claims. The SVF claim survived.
The district court initially certified two classes under FRCP 23(b)(1)(A). On remand, the court declined to certify further narrowed classes. The Seventh Circuit reversed, reasoning that the plaintiffs carefully limited the class to plan participants who invested in the SVF during the class period and employed reasonable means to exclude from the class persons who did not experience injury. The Court held:
To conform to Spano’s warning that the class must not be “defined so broadly that some members will actually be harmed” by the relief sought, Plaintiffs limited their definition of the SVF class to those who suffered damages as a result of Lockheed’s purportedly prudent management of the fund. … [T]his court has never held, and Spano did not
imply, that the mere possibility that a trivial level of intra-class conflict may materialize as the litigation progresses forecloses class certification entirely. … We conclude both that
Spano poses no bar to the proposed SVF class and that the district court’s reservations about the class were unfounded.
You can view the full 7th Circuit opinion here
Our Chicago class action attorneys have brought class action cases involving mass consumer product defects, false advertising and failure to honor warranties similar to the claims in this case. We are looking for new class actions to pursue involving defective products. Contact us if you feel you have a claim at our toll free number (877) 990-4990 or filling out an online contact form.
Our Chicago consumer rights private law firm handles individual and class action unfair debt collection and other consumer fraud cases that government agencies and public interest law firms such as the Illinois Attorney General may not pursue. Class action lawsuits has been involved in or spear-headed have led to substantial awards totalling over a million dollars to organizations including the National Association of Consumer Advocates, the National Consumer Law Center, and DiTommaso Lubin Austermuehle is proud of in assisting national and local consumer rights organizations obtain the funds needed to ensure that consumers are protected and informed of their rights. By standing up to consumer fraud and consumer rip-offs, and in the right case filing consumer protection lawsuits and class-actions you too can help ensure that other consumers’ rights are protected from consumer rip-offs and unscrupulous or dishonest practices.
Our Lombard and Elmhurst and Chicago consumer lawyers provide assistance in fair debt collection, consumer fraud and consumer rights cases including in Illinois and throughout the country. You can click here to see a description of the some of the many individual and class-action consumer cases we have handled.