United States District Court, D. Nevada
DONALD ALLBAUGH, on behalf of himself and all others similarly situated, Plaintiff,
CALIFORNIA FIELD IRONWORKERS PENSION TRUST et. al., Defendants.
Order re: Motion to Certify Class [Doc. 57]
JENNIFER A. DORSEY, District Judge.
This is a proposed ERISA class action for alleged miscalculation and failed payment of pension benefits. Plaintiff Donald Allbaugh claims he and similarly situated retirees are entitled to greater pension benefits than they are currently receiving to account for deferred benefits accumulated while they continued to work after reaching retirement age. Allbaugh moves to certify two proposed classes. I find that plaintiff has demonstrated that class treatment is appropriate for the claims asserted on behalf of Class 2 only, and I grant the motion in part and certify a class consisting of all participants (and their eligible beneficiaries) who had accrued benefits under the Plan prior to the adoption of the Plan amendment purporting to be effective as of June 1, 1989, and who did not receive or are not scheduled to receive both an actuarial adjustment to their benefits to compensate them for the delay in receipt of benefits after attainment of normal retirement age plus all of the retirement benefits each participant accrued following attainment of normal retirement age, for the prosecution of claims II and III.
From 1970, and continuing at various time through June 30, 2009, plaintiff Donald Allbaugh worked for employers who had contracts with the International Association of Bridge, Structural, Ornamental and Reinforcing Iron Workers. Those contracts required the employers to make contributions on behalf of employed ironworkers to Defendant California Field Ironworkers Pension Trust (the "Plan"), a multiemployer, defined-benefit employee pension benefit plan. As a result of his employment and the required employer contributions, plaintiff obtained a vested right to pension benefit payments upon turning sixty-five (normal retirement age) in August 2007. However, rather than retiring after reaching normal retirement age, plaintiff continued working and delayed application for his pension benefits until October 2009 (plaintiff's "delayed retirement date").
Under the Plan, participants who have at least five years of vesting credit are entitled to normal retirement benefits upon reaching the normal retirement age. For those working past normal retirement age, the version of the Plan in effect at plaintiff's delayed retirement date provided for payment of the greater of the pension credit earned during the continued employment or an actuarial increase to future payments to account for the benefits that would have been paid had plaintiff retired at normal retirement age (deferred benefits). When plaintiff requested his pension benefits, the Plan's administrator calculated that the increased pension credit due to plaintiff's extra years of service was a greater increase to his total benefit amount than the actuarial increase would have been. Consequently, the Plan began paying pension benefits, which included the pension credit plaintiff earned in his extra two years service.
Plaintiff, however, disagreed with the determination, arguing that under the terms of the Plan and the Employee Retirement Income Security Act ("ERISA") he is entitled to both the pension credits earned and an actuarial increase accounting for his deferred benefits. Plaintiff challenged the Plan's determinations of his benefits through the Plan's own internal review procedures. The Plan Administrator upheld the determination and plaintiff then brought this suit. Plaintiff asserts that the Plan has likewise deprived all similarly situated retirees of benefits to which they are entitled under the Plan and ERISA, and he now seeks to certify two classes:
Class 1: All participants in the Plan who worked past normal retirement age or who returned to work after commencement of benefits under the Plan (and their eligible beneficiaries) whose benefits are being suspended, were suspended or would, upon retirement, be suspended and who did not receive by personal delivery or first class mail in the first calendar month or payroll period for which benefits were withheld, a notice of suspension of benefits complaint with ERISA regulations and/or the Plan.
Class 2: All participants (and their eligible beneficiaries) who had accrued benefits under the Plan prior to the adoption of the Plan amendment purporting to be effective as of June 1, 1989 and who did not receive or are not scheduled to receive both an actuarial adjustment to their benefits to compensate them for the delay in receipt of benefits after attainment of normal retirement age plus all of the retirement benefits each participant accrued following attainment of normal retirement age.
Class 1 members assert claims in Counts I (violations of the Plan and ERISA's suspension-of-benefits and forfeiture provisions), III (violations of ERISA fiduciary duties), and IV (violation of the terms of the Plan) of the First Amended Complaint; and Class 2 seeks to pursue Counts II (violation of ERISA's accrual-of-benefits requirements) and III (violations of ERISA fiduciary duties). Having considered the papers and heard oral argument, I find that plaintiff has satisfied the class-certification requirements for Class 2 only; the absence of sufficient proof of commonality and typicality under Counts I, IV, and the portions of Count III that pertain to Class 1 prevents Class 1's certification.
A. Legal Standard for Class Certification
The class action is "an exception to the usual rule that litigation is conducted by and on behalf of the individual named parties only." To qualify for this exception, "[a] party seeking class certification must affirmatively demonstrate his compliance with [Fed. R. Civ. P. 23]." Rule 23(a) requires a plaintiff to meet four prerequisites for certification: (1) numerosity; (2) commonality; (3) typicality; and (4) adequacy of representation. Although a certification determination under Rule 23 does not involve a direct analysis of the merits of a plaintiff's underlying claims, "Rule 23 does not set forth a mere pleading standard." Rather, a plaintiff must prove "that there are in fact sufficiently numerous parties, common questions of law or fact, typicality of claims or defenses, and adequacy of representation, " in order for a court to grant certification. Accordingly, the court may certify a class only if it is "satisfied, after a rigorous analysis, that the prerequisites of Rule 23(a)" have been met. To that end, the plaintiff must provide "enough evidence, by affidavits, documents, or testimony, " to enable the court to determine that certification is appropriate. As this determination "generally involves considerations that are enmeshed in the factual and legal issues comprising the plaintiff's cause of action, " the court may be required "to probe behind the pleadings before coming to rest on the certification question." Consequently, the "rigorous analysis" required under Rule 23 will frequently "entail overlap with the merits of the plaintiff's claim."
In addition to meeting the requirements of Rule 23(a), a plaintiff must also satisfy one of the three subsections of Rule 23(b) before obtaining an order of certification. Rule 23(b)(1) requires the court to find that prosecuting separate actions would entail a risk of inconsistent judgments or establish dispositive facts for others prosecuting the same action against the same defendant. Rule 23(b)(2) requires the court to find that "the party opposing the class has acted or refused to act on grounds that apply generally to the class, so that final injunctive relief or corresponding declaratory relief is appropriate respecting the class as a whole." Rule 23(b)(3) requires the court to find (1) "that the questions of law or fact common to class members predominate over any questions affecting only individual members;" and (2) "that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy." The same analytical principles applicable to Rule 23(a) govern Rule 23(b).
B. Plaintiff Has Satisfied Rule 23(a) for Class 2 ...