Sacerdote et al v. New York University

MEMORANDUM OF LAW in Support re: 120 MOTION to Certify Class . . Document

S.D.N.Y.December 18, 2017

IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK DR. ALAN SACERDOTE, et al., Plaintiffs, v. NEW YORK UNIVERSITY, Defendant. No. 1:16-CV-06284 MEMORANDUM IN SUPPORT OF PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION Case 1:16-cv-06284-KBF Document 121 Filed 12/18/17 Page 1 of 28 i CONTENTS Introduction .............................................................................................................................. 1 Background .............................................................................................................................. 2 I. Parties and the Plans. ........................................................................................................ 2 II. Plaintiffs’ claims ............................................................................................................... 4 A. Excessive recordkeeping and administrative fees (Count III) .................................. 4 B. Imprudent investments (Count V) ............................................................................. 5 III. The proposed class definition. .......................................................................................... 6 Argument ................................................................................................................................. 7 I. Standard for class certification. ........................................................................................ 7 II. Plaintiffs meet the requirements of Rule 23(a). ................................................................ 7 A. Numerosity ................................................................................................................ 7 B. Commonality ............................................................................................................. 8 C. Typicality ................................................................................................................ 10 D. Adequacy ................................................................................................................. 12 III. Plaintiffs meet the requirements of Rule 23(b). ............................................................. 15 A. The class should be certified under Rule 23(b)(1). ................................................. 16 B. In the alternative, the class should be certified under Rule 23(b)(3). ..................... 19 Conclusion ............................................................................................................................. 22 Case 1:16-cv-06284-KBF Document 121 Filed 12/18/17 Page 2 of 28 ii AUTHORITIES Cases Abbott v. Lockheed Martin Corp., 286 F.R.D. 388 (S.D. Ill. 2012) ................................................................................................ 16 Abbott v. Lockheed Martin Corp., No. 06-701, 2015 U.S.Dist.Lexis 93206 (S.D. Ill. July 17, 2015) ..................................... 15, 16 Amchem Prods., Inc. v. Windsor, 521 U.S. 591 (1997) ........................................................................................................... 13, 20 Amgen, Inc. v. Conn. Ret. Plans & Tr. Funds, 133 S. Ct. 1184 (2013) ............................................................................................................... 7 Beesley v. Int’l Paper Co., No. 06-703, Doc. 240 (S.D. Ill. Sept. 30, 2008), vacated on other grounds, 633 F.3d 574 (7th Cir. 2011) ........................................................................................................... 16 Consol. Rail Corp. v. Town of Hyde Park, 47 F.3d 473 (2d Cir. 1995) ........................................................................................................ 8 Crabill v. Trans Union, L.L.C., 259 F.3d 662 (7th Cir.2001) .................................................................................................... 21 Donovan v. Bierwirth, 680 F.2d 263 (2d Cir. 1982) ...................................................................................................... 1 Flores v. Anjost Corp., 284 F.R.D. 112 (S.D.N.Y. 2012) ............................................................................................... 7 Gen Tel. Co. of the Sw. v. Falcon, 457 U.S. 147 (1982) ............................................................................................................... 7, 8 George v. Kraft Foods Global Inc., 251 F.R.D. 338 (N.D. Ill. 2008) ............................................................................................... 16 In re Beacon Assocs. Litig., 282 F.R.D. 315 (S.D.N.Y. 2012) ........................................................................................... 1, 8 In re J.P. Morgan Stable Value Fund ERISA Litig., No. 12-2548, 2017 U.S.Dist.LEXIS 59264 (S.D.N.Y. Mar. 31, 2017) .................................... 9 In re Northrop Grumman Corp. ERISA Litig., Case 1:16-cv-06284-KBF Document 121 Filed 12/18/17 Page 3 of 28 iii No. 06-6213, 2011 U.S.Dist.Lexis 94451 (C.D. Cal. Mar. 29, 2011) ...................................... 16 In re Omnicom Grp., Inc. Sec. Litig., No. 02-4483, 2007 U.S.Dist.LEXIS 31963 (S.D.N.Y. Apr. 30, 2007) ..................................... 8 In re Prudential Sec. Inc. P'ships Litig., 163 F.R.D. 200 (S.D.N.Y. 1995) ............................................................................................... 8 In re Schering Plough Corp. ERISA Litig., 589 F.3d 585 (3d Cir. 2009) ....................................................................................... 1, 8, 16, 19 In re US FoodServ. Pricing Litig., 729 F.3d 108 (2d Cir. 2013) ...................................................................................................... 7 Kanawi v. Bechtel Corp., 254 F.R.D. 102 (N.D. Cal. 2008) ................................................................................. 10, 11, 16 Katsaros v. Cody, 744 F.2d 270 (2d Cir. 1984) ...................................................................................................... 1 Krueger v. Ameriprise Fin., Inc., 304 F.R.D. 559 (D.Minn. 2014) ........................................................................................ passim La Scala v. Scrufari, 479 F.3d 213 (2d Cir. 2007) ...................................................................................................... 1 Leber v. Citigroup 401(k) Plan Inv. Comm., No. 07-9329, 2017 U.S.Dist.LEXIS 194293 (S.D.N.Y. Nov. 27, 2017) ........................ 1, 7, 10 Loomis v. Exelon Corp., No. 06-4900, 2007 U.S.Dist.Lexis 46893 (N.D. Ill. June 26, 2007) ........................................ 16 Mass Mut. Lif. Ins. Co. v. Russell, 473 U.S. 134 (1985) ............................................................................................................. 6, 13 Moreno v. Deutsche Bank Ams. Holding Corp., No. 15-9936, 2017 U.S.Dist.LEXIS 143208 (S.D.N.Y Sept. 5, 2017) ............................. 1, 7, 9 Ortiz v. Fibreboard Corp., 527 U.S. 815 (1999) ................................................................................................................. 18 Piazza v. EBSCO Indus. Inc., 273 F.3d 1341 (11th Cir. 2001) ................................................................................................ 19 Roach v. T.L. Cannon Corp., 778 F.3d 401 (2d Cir. 2015) ...................................................................................................... 7 Case 1:16-cv-06284-KBF Document 121 Filed 12/18/17 Page 4 of 28 iv Spano v. Boeing Co., 294 F.R.D. 114 (S.D. Ill. 2013) ................................................................................................ 16 Stanford v. Foamex L.P., 263 F.R.D. 156 (E.D. Pa. 2009) ............................................................................................... 18 Surowitz v. Hilton Hotels Corp., 383 U.S. 363 (1966) ................................................................................................................. 13 Taylor v. United Techs. Corp., No. 06-1494, 2008 U.S.Dist.Lexis 43655 (D. Conn. June 3, 2008)......................................... 16 Tibble v. Edison Int’l, No. 07-5359, 2009 U.S.Dist.Lexis 120939 (C.D.Cal. June 30, 2009), aff’d, 729 F.3d 1110 (9th Cir. 2013), vacated on other grounds, 135 S.Ct. 1823 (2015) ................................................................................................................................. 10, 18 Tibble v. Edison Int’l, No. 07-5359, 2009 U.S.Dist.Lexis 120939 (C.D. Cal. June 30, 2009) .................................... 16 Tussey v. ABB Inc., 850 F.3d 951 (8th Cir. 2017) .................................................................................................... 17 Tussey v. ABB Inc., No. 06-4305, 2007 U.S.Dist.Lexis 88668 (W.D. Mo. Dec. 3, 2007) ....................................... 16 Tussey v. ABB, Inc., 746 F.3d 327 (8th Cir. 2014) ..................................................................................................... 5 Tussey v. ABB, Inc., No. 06-4305, 2012 U.S.Dist.Lexis 157428 (W.D. Mo. Nov. 2, 2012) .................................... 15 Tussey v. ABB, Inc., No. 06-4305, 2012 U.S.Dist.Lexis 45240 (W.D. Mo. Mar. 31, 2012)..................................... 18 Wal-Mart Stores, Inc., v. Dukes, 564 U.S. 338 (2011) ............................................................................................................. 8, 12 Statutes 26 U.S.C. §403(b) ........................................................................................................................... 2 29 U.S.C. §1002(16)(A)(i) .............................................................................................................. 3 29 U.S.C. §1002(34) ....................................................................................................................... 2 Case 1:16-cv-06284-KBF Document 121 Filed 12/18/17 Page 5 of 28 v 29 U.S.C. §1102(a) ......................................................................................................................... 3 29 U.S.C. §1103(c)(1) ..................................................................................................................... 5 29 U.S.C. §1104(a)(1) ............................................................................................................... 9, 17 29 U.S.C. §1109(a) ........................................................................................................... 1, 2, 6, 13 29 U.S.C. §1132(a)(2) ................................................................................................................. 1, 6 Rules Fed. R. Civ. P. 23 ............................................................................................................................ 7 Fed.Civ.P. 23(g) ............................................................................................................................ 15 Fed.R.Civ.P. 23 ............................................................................................................................. 18 Fed.R.Civ.P. 23(a)(1) ...................................................................................................................... 7 Fed.R.Civ.P. 23(a)(2) ...................................................................................................................... 8 Fed.R.Civ.P. 23(a)(3) .................................................................................................................... 10 Fed.R.Civ.P. 23(a)(4) .................................................................................................................... 13 Fed.R.Civ.P. 23(b)(1)(B) .............................................................................................................. 18 Other Charles Alan Wright, Arthur R. Miller, & Mary Kay Kane, 7AA FED. PRAC. & PROC. CIV. (3d ed.) ................................................................................................................... 19 Case 1:16-cv-06284-KBF Document 121 Filed 12/18/17 Page 6 of 28 1 INTRODUCTION As the fiduciary of two ERISA-governed defined contribution retirement plans for its employees,1 Defendant NYU owed the Plans a duty to act in accordance with “the objective prudent person standard developed in the common law of trusts”— a standard that is “the highest duty known to the law.” La Scala v. Scrufari, 479 F.3d 213, 219–21 (2d Cir. 2007)(citing Katsaros v. Cody, 744 F.2d 270, 279 (2d Cir. 1984), Donovan v. Bierwirth, 680 F.2d 263, 271– 72 & n.8 (2d Cir. 1982)(Friendly, J.)). To redress a breach of fiduciary duties, ERISA expressly authorizes any plan participant to bring suit in a representative capacity on behalf of a plan to obtain the plan’s remedies, including “losses to the plan” and appropriate equitable relief. See 29 U.S.C. §§1132(a)(2), 1109(a) . Numerous courts have held “that the distinctive ‘representative capacity’ aspect of ERISA participant and beneficiary suits makes litigation of this kind ‘a paradigmatic example of a [Rule 23](b)(1) class.’” In re Beacon Assocs. Litig., 282 F.R.D. 315, 342 (S.D.N.Y. 2012)(alteration in original)(quoting In re Global Crossing Sec. & ERISA Litig., 225 F.R.D. 436, 453 (S.D.N.Y. 2004)); In re Schering Plough Corp. ERISA Litig., 589 F.3d 585, 604 (3d Cir. 2009)(citing cases); see also Leber v. Citigroup 401(k) Plan Inv. Comm., No. 07-9329, 2017 U.S.Dist.LEXIS 194293, *44–47 (S.D.N.Y. Nov. 27, 2017)(granting Rule 23(b)(1)(B) certification); Moreno v. Deutsche Bank Ams. Holding Corp., No. 15-9936, 2017 U.S.Dist.LEXIS 143208, *21–27 (S.D.N.Y Sept. 5, 2017)(same), petition for permission to appeal pending, No. 17-2911 (2d Cir. Sept. 19, 2017). This case is no exception. Plaintiffs’ claims arise from NYU’s plan-level conduct regarding 1 The “Plans” are the New York University Retirement Plan for Members of the Faculty, Professional Research Staff and Administration (“Faculty Plan”), and NYU School of Medicine Retirement Plan for Members of the Faculty, Professional Research Staff and Administration (“Medical Plan”). Doc. 39, Amended Complaint (AC) ¶¶19–25. Case 1:16-cv-06284-KBF Document 121 Filed 12/18/17 Page 7 of 28 2 administrative fees and investment options. On behalf of a class of all participants in the Plans, Plaintiffs seek to obtain remedies due to the Plans under 29 U.S.C. §1109(a), including damages and equitable relief. The Court should certify this action as a class action under Federal Rule of Civil Procedure 23(b)(1). BACKGROUND I. Parties and the Plans. The Plans are individual account, defined contribution plans under 29 U.S.C. §1002(34), and qualified plans under 26 U.S.C. §403(b). AC ¶¶9, 13; Doc. 80, Answer to AC (Ans.), ¶¶9, 13. Each of the six named Plaintiffs is an NYU employee and a participant in one of the Plans; three are participants in the Faculty Plan, and three are participants in the Medical Plan. AC ¶¶19–21, 23–25; Ans. ¶¶19–21, 23–25. The Plans are among the largest defined contribution plans in the United States. AC ¶3. As of year-end 2014, the Plans had a combined total of over $4 billion in assets, with the Faculty Plan holding $2.4 billion and the Medical Plan $1.8 billion. AC ¶¶12, 16; Ans. ¶¶12, 16. Each Plan has had thousands of participants throughout the proposed class period (since August 9, 2010). The Faculty Plan has had at least 11,600 participants at all relevant times, and over 16,300 participants with account balances as of year-end 2014.2 The Medical Plan has had at least 7,600 participants at all relevant times, and over 7,800 participants with account balances as of year- end 2014.3 Defendant NYU is the Administrator and named fiduciary of both Plans, with exclusive authority to control and manage the operation and administration of the Plans. AC ¶¶26–27; Ans. 2 AC ¶12; Ans. ¶12; Faculty Plan Forms 5500, 2010–2016, attached hereto as Exhibits 1–7, see p. 2, Line 6(g) of each. 3 AC ¶16; Ans. ¶16; Medical Plan Forms 5500, 2010–2016, attached hereto as Exhibits 8–14, see p.2, Line 6(g) of each. Case 1:16-cv-06284-KBF Document 121 Filed 12/18/17 Page 8 of 28 3 ¶¶26–27; Doc. 46-1 at 26 (§§7.1, 7.2)(Faculty Plan document);4 Doc. 46-2 at 38 (§§7.1, 7.2) (Medical Plan document). 29 U.S.C. §§1002(16)(A)(i); 1102(a). In its capacity as Administrator and named fiduciary, Defendant was responsible for hiring the Plans’ administrative service providers, negotiating their compensation, and determining the available investment options in which participants can invest. Doc. 46-1 at 14, 16, 26 (§§4.11(a), 4.14, 7.1–7.3); Doc. 46-2 at 18, 22, 38 (§§4.10(a), 4.15, 7.1–7.3). NYU manages the Plans on a centralized basis through the Retirement Plan Committee (“Committee”), which consists of various officers of NYU and NYU Langone Medical Center. Exs. 15–17 (Committee Charters). Each member of the Committee serves ex officio on behalf of NYU, and not in his or her individual capacity. Ex. 15 at 1; Ex. 16 at 1; Ex. 17 at 1. The Committee’s responsibilities include evaluating, selecting, and monitoring investment options in both Plans. Ex. 15 at 2, 5; Ex. 16 at 2, 5; Ex. 17 at 2, 5. The Committee was required to follow the Plans’ Investment Policy Statement (“IPS”), which sets forth uniform criteria to be applied to the investment providers and investment options available in all of NYU’s defined contribution plans, including the Plans. Ex. 18 at 1, 3 (IPS). The Committee made decisions for both Plans collectively. The Committee referred to both Plans collectively as “the 403B (Defined Contribution Plan.” E.g., Ex. 19 at 1. It hired the same outside consultant to assist with reviewing “the investment performance and expenses of the funds” in “both” Plans, because the large “number of investment funds” in the Plans meant that NYU’s Investment Office could not “feasibly” satisfy that fiduciary duty. Id. at 1–2. Based on Defendant’s centralized management of Plan assets, there is substantial overlap in the Plans’ investment lineups. As of year-end 2014, the Faculty Plan had 103 investment options (25 4 All “Doc.” page citations refer to the ECF page number at the top of the page. Case 1:16-cv-06284-KBF Document 121 Filed 12/18/17 Page 9 of 28 4 TIAA-CREF, 78 Vanguard), 84 of which were also in the Medical Plan (11 TIAA-CREF, 73 Vanguard). AC ¶¶107–08; Ans. ¶¶107–08; Ex. 5 at 41–42; Ex. 12 at 42–43.5 Each participant’s account balance is based on the value of contributions and investment earnings, less expenses. See, e.g., Ex. 1 at 29 (p. 4, Note 1 to Financial Statements); Ex. 8 at 30 (p. 5, Note 1 to Financial Statements). The Plans’ administrative expenses are paid entirely through asset-based revenue sharing paid from the expense ratios of the Plans’ investment options. Doc. 46-5 at 2; Doc. 46-6 at 3; Doc. 46-1 at 26 (§7.3); Doc. 46-2 at 38 (§7.3); Exs. 1–14 (Schedule C of each 5500, listing “indirect compensation”). NYU acknowledges that these administrative expenses “are allocated to each participant in a uniform way.” Doc. 46-5 at 2; Doc. 46-6 at 3. II. Plaintiffs’ claims On May 10, 2017, the Court granted in part and denied in part the Defendant’s motion to dismiss. Doc. 79. Plaintiffs’ remaining claims allege that Defendant breached its duty of prudence (1) by causing the Plans to incur excessive administrative and recordkeeping fees (id. at 18–22, Count III, AC ¶¶123–38, 205–12); and (2) failing to prudently select and evaluate investment options in the Plans by continuing to offer the CREF Stock and TIAA Real Estate accounts despite high fees and poor performance, and by including actively managed mutual funds and retail options with high expenses and poor performance instead of superior options that were readily available to the Plans (Doc. 79 at 22–25, Count V, AC ¶¶163–89, 217–29). A. Excessive recordkeeping and administrative fees (Count III) As noted, the investment options in the Plans made revenue sharing payments to the Plans’ recordkeepers ostensibly as compensation for recordkeeping services. Doc. 46-5 at 2; Doc. 46-6 5 Other years had similar overlap. Doc. 46-5 at 3–4, 7–11, 12–21 (2016); Doc. 46-6 at 6–17 (2016); Doc. 46-8 at 2–14 (2011); Doc. 46-9 at 2–12 (2011). Case 1:16-cv-06284-KBF Document 121 Filed 12/18/17 Page 10 of 28 5 at 3; AC ¶¶51, 127–29. While ERISA does not prohibit revenue sharing, Defendant was required to monitor the amount of the revenue sharing payments to ensure it was reasonable for the services provided, and to take action to reduce any excessive costs to reasonable levels. Tussey v. ABB, Inc., 746 F.3d 327, 336 (8th Cir. 2014); DOL Adv. Op. 2013-03A, at 4 (Jul. 3, 2013)(emphasis added); 6 AC ¶¶63–65, 131, 135–36; 29 U.S.C. §§1103(c)(1), 1104(a)(1)(A). Defendant failed to monitor and control the amount of revenue sharing payments and to determine and negotiate a reasonable recordkeeping fees for the Plans. AC ¶¶127–38. Based on the market for similar services for similarly sized Plans, Defendant could have obtained a total annual recordkeeping fee for both Plans of $840,000 (an average of roughly $35/participant). Id. ¶132. the uncapped, asset-based revenue sharing payments to the Plans’ recordkeepers far exceeded these market rates. From 2010 to 2014, the Faculty Plan paid between $3.1 and $3.8 million annually from the Faculty Plan—approximately $230 to $270 per participant—over 670% higher than the reasonable market rate. Id. ¶133. In that same period, the Medical Plan paid between $2.1 and $2.6 million annually—approximately $220 to $340 per participant—over 870% higher than the reasonable market rate. Id. ¶134. Plaintiffs estimate that Defendant’s failure to prudently monitor and control these excessive administrative and recordkeeping fees caused losses to the Plans in excess of $43 million. Id. ¶138. B. Imprudent investments (Count V) Defendants allowed the Plans’ recordkeepers, TIAA and Vanguard, to dictate the Plans’ investment lineups, resulting in the Plans consisting exclusively of the recordkeepers’ proprietary options. AC ¶¶4, 107–108. As a result of Defendants’ deficient process for monitoring investments, Defendants retained options—including the TIAA Real Estate Account and CREF 6 Available at: https://www.dol.gov/sites/default/files/ebsa/employers-and- advisers/guidance/advisory-opinions/AO2013-03A_0.pdf. Case 1:16-cv-06284-KBF Document 121 Filed 12/18/17 Page 11 of 28 6 Stock Account—that charged significantly higher fees and consistently underperformed over long periods compared to prudent alternative investment options available to the Plans. Id. ¶¶163–189, 217–229. The CREF Stock Account and TIAA Real Estate Account had long histories of substantial underperformance as of the beginning of the proposed class period, dramatically underperforming both passive and active benchmarks on a long-term basis, and charged significantly higher fees than comparable options available to the Plans. AC ¶¶170–89. Defendants similarly included a number of including actively managed mutual funds and retail options with high expenses and poor performance compared to readily available alternatives. AC ¶¶164–69, 223. Had Defendants used a prudent investment review process, these options would have been removed. Id. ¶¶165, 170, 180, 182, 186, 188. Defendants’ failure to remove those imprudent options caused the Plans losses of over $250 million. Id. ¶¶183, 189. III. The proposed class definition. ERISA authorizes any plan participant to bring an action on behalf of a plan to enforce ERISA’s fiduciary duties and to recover all losses to a plan caused by a breach of fiduciary duty. 29 U.S.C. §§1132(a)(2), 1109(a). Plaintiffs bring this action “in a representative capacity on behalf of the plan as a whole” to recover losses to their Plans caused by Defendant’s breaches, and to obtain equitable remedies. Mass Mut. Lif. Ins. Co. v. Russell, 473 U.S. 134, 142 n.9 (1985). Plaintiffs seek to represent and to certify the following class: All participants and beneficiaries of the NYU School of Medicine Retirement Plan for Members of the Faculty, Professional Research Staff and Administration and the New York University Retirement Plan for Members of the Faculty, Professional Research Staff and Administration from August 9, 2010, through the date of judgment, excluding the Defendant and any participant who is a fiduciary to the Plans. AC ¶191. Case 1:16-cv-06284-KBF Document 121 Filed 12/18/17 Page 12 of 28 7 ARGUMENT I. Standard for class certification. To obtain class certification, a proposed class must meet the four requirements of Rule 23(a) and one of the requirements of Rule 23(b). Roach v. T.L. Cannon Corp., 778 F.3d 401, 405 (2d Cir. 2015); Moreno, 2017 U.S.Dist.LEXIS 143208, *9–10; Fed.R.Civ.P. 23.7 Although courts must conduct a “rigorous analysis” to ensure that the Rule 23(a) elements are met, Flores v. Anjost Corp., 284 F.R.D. 112, 122 (S.D.N.Y. 2012)(quoting Gen. Tel. Co. of the Sw. v. Falcon, 457 U.S. 147, 160–61 (1982)), “Rule 23 grants courts no license to engage in free-ranging merits inquiries at the certification stage.” Amgen, Inc. v. Conn. Ret. Plans & Trust Funds, 568 U.S. 455, 466 (2013). “Merits questions may be considered to the extent—but only to the extent—that they are relevant to determining whether the Rule 23 prerequisites for class certification are satisfied.” Amgen, 568 U.S. at 466. II. Plaintiffs meet the requirements of Rule 23(a). Rule 23(a) requirements are commonly referred to as numerosity, commonality, typicality, and adequacy of representation. In re US FoodServ. Pricing Litig., 729 F.3d 108, 117 (2d Cir. 2013). The proposed class satisfies these elements. A. Numerosity “[T]he class is so numerous that joinder of all members is impracticable.” Fed.R.Civ.P. 23(a)(1). “In this Circuit, numerosity is ‘presumed at a level of 40 members.’” Leber, 2017 U.S.Dist.LEXIS 194293, *30 (quoting Consol. Rail Corp. v. Town of Hyde Park, 47 F.3d 473, 7 Implicit in Rule 23 is a “modest threshold requirement” of ascertainability, which asks if the “proposed class is defined using objective criteria that establish a membership with definite boundaries.” Petrobras Sec. Univs. Superannuation Scheme Ltd. v. Petróleo Brasileiro S.A. Petrobras, 862 F.3d 250, 269 (2d Cir. 2017). Here, the class is indisputably defined using objective criteria: status as a participant or beneficiary of the Plans during the proposed class period (excluding the Plans’ fiduciaries). AC ¶191. Case 1:16-cv-06284-KBF Document 121 Filed 12/18/17 Page 13 of 28 8 483 (2d Cir. 1995)). When a proposed class has “thousands of members,” joinder “would obviously be impracticable ….” ” In re Beacon, 282 F.R.D. at 339. Here, the Plans collectively had at least 19,000 participants throughout the proposed class period, with over 24,000 participants as of year-end 2014. AC ¶¶12, 16; Exhibits 1–14, p.2, Line 6(g) of each. Joinder is unquestionably impracticable. B. Commonality The commonality inquiry asks if “there are questions of law or fact common to the class[.]” Fed.R.Civ.P. 23(a)(2). “The commonality and typicality requirements of Rule 23(a) tend to merge.” Gen. Tel. Co. of the Sw., 457 U.S. at 157 n.13. “Those requirements [ ] also tend to merge with the adequacy-of-representation requirement ….” Id. Commonality involves “the capacity of a classwide proceeding to generate common answers apt to drive the resolution of the litigation.” Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 350 (2011)(internal quotations omitted). Commonality is satisfied when there is at least one common question, the determination of which “will resolve an issue that is central to the validity of each one of the claims in one stroke.” Id. at 350. “[E]ven a single common question will do.” Id. at 359 (quotation, citation, and editing marks omitted). The commonality test is “generally considered a ‘low hurdle’ easily surmounted.” In re Omnicom Grp., Inc. Sec. Litig., No. 02- 4483, 2007 U.S.Dist.LEXIS 31963, *11 (S.D.N.Y. Apr. 30, 2007)(quoting In re Prudential Sec. Inc. P'ships Litig., 163 F.R.D. 200, 206 n.8 (S.D.N.Y. 1995)). Because an ERISA fiduciary breach action is an action on behalf of a plan regarding duties owed at the plan level, “commonality is quite likely to be satisfied.” In re Schering Plough Corp. ERISA Litig., 589 F.3d 585, 599 n.11 (3d Cir. 2009). “Typically, ‘the question of defendants’ liability for ERISA violations is common to all class members because a breach of fiduciary duty Case 1:16-cv-06284-KBF Document 121 Filed 12/18/17 Page 14 of 28 9 affects all participants and beneficiaries.’” In re J.P. Morgan Stable Value Fund ERISA Litig., No. 12-2548, 2017 U.S.Dist.LEXIS 59264, *20 (S.D.N.Y. Mar. 31, 2017)(quoting In re Polaroid ERISA Litig., 240 F.R.D. 65, 74 (S.D.N.Y. 2006)); see also, e.g., In re Global Crossing Sec. & ERISA Litig., 225 F.R.D. at 452 (holding same). Here, Defendant owed duties to the Plans, not individual participants, and Plaintiffs’ claims all concern Plan-level decisions regarding administrative fees and investment options. See 29 U.S.C. §1104(a)(1)(“a fiduciary shall discharge his duties with respect to a plan …”)(emphasis added). Essentially the same menu of options, the same fee structures, and the same fiduciary actions and omissions applied to all participants. Doc. 46-5 at 2–4, 7–11, 12–21; Doc. 46-6 at 3, 6–17; Doc. 46-8 at 2–14; Doc. 46-9 at 2–12; Ex. 5 at 41–42; Ex. 12 at 42–43. Therefore, there are numerous common questions upon which all class members’ claims depend, including: (1) whether Defendant is a fiduciary; (2) whether Defendant breached its fiduciary duties in each respect alleged by Plaintiffs; (3) whether the Plans’ suffered resulting losses; (4) how to calculate the Plans’ losses; and (5) what equitable relief should be imposed to remedy such breaches and to prevent future ERISA violations. AC ¶¶192(b). The evidence needed to answer these contentions are Plan-level facts, and thus the same for all the Plans’ participants. If the evidence shows that defendants “failed to monitor [plan] investments” or fees, “it would not only generate answers applicable to all class members, but would also address the heart of the claims at issue in this litigation.” Leber, 2017 U.S.Dist. LEXIS 194293 at *32–33. These answers do not depend on particular circumstances of any one participant. That is because, in ERISA fiduciary breach actions, “[l]iability is determined based on Defendants’ not Plaintiffs’ decisions.” Moreno, 2017 U.S.Dist.LEXIS 143208, *13–14 (citation omitted). The Case 1:16-cv-06284-KBF Document 121 Filed 12/18/17 Page 15 of 28 10 questions of law and fact in this action are common to each class member, as numerous federal courts in similar cases have recognized. Id. at *14 (finding commonality because questions regarding the imprudent retention of funds and allegedly excessive recordkeeping fees were common questions to “be resolved with respect to the Plan as a whole”); Leber, 2017 U.S.Dist. LEXIS 194293, *32–33 (finding commonality where common questions include “whether defendants failed to prudently and loyally monitor the Plan’s investments”); Krueger v. Ameriprise Fin., Inc., 304 F.R.D. 559, 572 (D. Minn. 2014)(“the questions of whether Defendants breached their fiduciary duties by causing the Plan to select imprudent investment options or pay excessive record-keeping fees, and whether the Plan suffered losses from those breaches, are common to all Plan participants’ claims and, therefore, will generate answers common to all of the putative class members”); Tibble v. Edison Int’l, No. 07-5359, 2009 U.S. Dist.LEXIS 120939, *8–9 (C.D. Cal. June 30, 2009), aff’d, 729 F.3d 1110 (9th Cir. 2013), vacated on other grounds, 135 S. Ct. 1823 (2015)(holding same); Kanawi v. Bechtel Corp., 254 F.R.D. 102, 110 (N.D. Cal. 2008)(“Defendants owed identical fiduciary duties to all members of the proposed class with respect [to] the Plan. Because this case involves Defendants’ conduct as to all participants in the Plan, Rule 23’s ‘commonality’ requirement is satisfied.”). In sum, because Defendant owed identical fiduciary duties to all members of the class and made decisions at the Plan level as to both Plans collectively, commonality is satisfied. C. Typicality Typicality requires that the “claims or defenses of the representative parties are typical of the claims or defenses of the class.” Fed.R.Civ.P. 23(a)(3). This prong of the analysis “does not require that the factual background of each named plaintiff’s claim be identical to that of all class members,” Caridad v. Metro-N. Commuter R.R., 191 F.3d 283, 293 (2d Cir. 1999), nor does it Case 1:16-cv-06284-KBF Document 121 Filed 12/18/17 Page 16 of 28 11 require that all Plan participants invest in identical funds at identical times. Leber, 2017 U.S.Dist. LEXIS 194293, *41; Krueger, 304 F.R.D. at 573. Instead, typicality requires that “each class member’s claim arises from the same course of events and each class member makes similar legal arguments to prove the defendant’s liability.” In re Flag Telecom Holdings, Ltd. Sec. Litig., 574 F.3d 29, 35 (2d Cir. 2009)(quoting Robidoux v. Celani, 987 F.2d 931, 936 (2d Cir. 1993)). Accord Moreno, 2017 U.S.Dist.LEXIS 143208, *18; In re Virtus Inv. Partners, Inc., No. 15- 1249, 2017 U.S.Dist.LEXIS 73554, *7 (S.D.N.Y. May 15, 2017)(both holding same). Accordingly, “when it is alleged that the same unlawful conduct was directed at or affected both the named plaintiff and the class sought to be represented, the typicality requirement is usually met irrespective of minor variations in the fact patterns underlying individual claims.” Robidoux, 987 F.2d at 936–37. Because a §1132(a)(2) claim is inherently a representative claim, any participant’s claim is necessarily typical of the claims of the class, since any participant is asserting the Plans’ claim. For these reasons, courts routinely find any participant’s fiduciary breach claims to be typical of the claims of all participants in the plan. Piazza v. EBSCO Indus., 273 F.3d 1341, 1351 (11th Cir. 2001)(finding typicality because ERISA fiduciary breach claims on behalf of a plan “arise from precisely the same practice and the legal issues are identical”); In re Suntrust Banks, Inc., No. 08-03384, 2016 U.S. Dist. LEXIS 108916, *23–24 (N.D. Ga. Aug. 17, 2016)(because ERISA fiduciary breach claims “are brought on behalf of the Plan,” purported conflicts between the representative and the class members “are irrelevant”); Krueger, 304 F.R.D. at 573 (finding typicality satisfied for claims “alleging breaches of fiduciary duties Defendants owed to the Plan,” because named plaintiffs and class members were “seeking redress of similar grievances under the same legal and remedial theories”); Kanawi, 254 F.R.D. at 110 (“In light of the Case 1:16-cv-06284-KBF Document 121 Filed 12/18/17 Page 17 of 28 12 representative nature of a suit filed pursuant to [§1132](a)(2) . . . Plaintiffs’ claims are sufficiently typical of those of other class members”). Recent decisions from this District have found typicality satisfied for similar ERISA claims involving defined contribution plans. In Moreno, 2017 U.S.Dist.LEXIS 143208, the Court found typicality to be satisfied and certified a class alleging ERISA fiduciary breach claims because each plaintiff had done one or more of the following: (1) invested in a poorly performing fund, (2) participated in the Plan while allegedly excessive recordkeeping fees were being charged, or (3) invested in a challenged fund for which lower cost alternatives were available. Id. at *19. Accord Leber, 2017 U.S.Dist.LEXIS 194293, *38–42. The same reasoning applies here. Moreover, because the commonality and typicality requirements “tend to merge,” Dukes, 564 U.S. at 349 n.5, Plaintiffs’ claims are typical for many of the same reasons that there are overwhelmingly common issues of fact and law. Because Defendant’s actions were directed to and affected the Plans as a whole, the claims of Plaintiffs and class members all arise from the same events and course of conduct—Defendant’s failures to prudently (1) monitor and control the Plans’ recordkeeping fees, and (2) monitor the Plans’ investment options on an ongoing basis and to remove imprudent ones. See Tussey, 746 F.3d at 336; Tibble v. Edison Int’l, 135 S. Ct. 1823, 1828–29 (2015); Katsaros, 744 F.2d at 279. Moreover, the Plaintiffs and all class members are bringing the same claims under the same legal and remedial theory: enforcement through §1132(a)(2) of Defendant’s obligations under §1109(a) to make good to the Plans the losses caused by Defendant’s breaches of duty and to obtain appropriate equitable relief. Accordingly, typicality is satisfied. D. Adequacy The final prong of Rule 23(a), adequacy, asks whether Plaintiffs “will fairly and adequately Case 1:16-cv-06284-KBF Document 121 Filed 12/18/17 Page 18 of 28 13 protect the interests of the class.” Fed.R.Civ.P. 23(a)(4). The adequacy requirement ensures that there are no potential “conflicts of interests between the named parties and the class they seek to represent.” Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 625 (1997). Adequacy looks at both the adequacy of the class representatives and the adequacy of the class counsel. The class representatives “must have an interest in vigorously pursuing the claims of the class,” with no “fundamental” conflicts of interest that would render them antagonistic to the class. Denney v. Deutsche Bank AG, 443 F.3d 253, 268 (2d Cir. 2006). In addition, class counsel must be “qualified, experienced, and able to conduct the litigation.” In re Flag Telecom Holdings, 574 F.3d at 34 (internal quotations omitted). Here, both requirements are met. 1. Plaintiffs have no conflicts with other class members and will vigorously prosecute this action on behalf of the class. Plaintiffs’ interests are aligned with the class members’ interests because they all are acting on behalf of their Plans in seeking to enforce the fiduciary duties that Defendant owed to the Plans and to recover damages and equitable relief that are due to the Plans. See 29 U.S.C. §1109(a); Russell, 473 U.S. at 142 n.9. Because Plaintiffs are pursuing claims on behalf of the Plans, as opposed to individual claims, there are no conflicts between Plaintiffs’ individual interests and the interests of the class. Krueger, 304 F.R.D. at 574–75.8 To the contrary, the Plaintiffs and class members all share the same objectives, the same factual and legal positions, and the same interest in establishing Defendant’s liability. Additionally, a class representative needs only a basic understanding of the claims and a willingness to participate in the case. Surowitz v. Hilton Hotels Corp., 383 U.S. 363, 373 (1966). 8 Mere hypothetical or minor conflicts among class members do not defeat class certification. “In order to defeat a motion for certification, [ ] the conflict must be fundamental.” In re Flag Telecom Holdings, 574 F.3d at 35 (2d Cir. 2009)(internal quotations omitted). Case 1:16-cv-06284-KBF Document 121 Filed 12/18/17 Page 19 of 28 14 See also Baffa v. Donaldson, 222 F.3d 52, 61 (2d Cir. 2000)(“The Supreme Court in Surowitz[ ] expressly disapproved of attacks on the adequacy of a class representative based on the representative’s ignorance.”) Thus, a representative need not have extensive knowledge of the law or facts underpinning the action to be adequate. “This is particularly the case in complex securities litigation, where a great deal of reliance on expert counsel is to be expected.” N.J. Carpenters Health Fund v. Royal Bank of Scot. Grp., PLC, No. 08-5310, 2016 U.S.Dist.LEXIS 153804, *17 (S.D.N.Y. Nov. 4, 2016)(internal quotations omitted). As shown by their deposition testimony, each of the named Plaintiffs understands the nature of their claims and their duties as class representatives to vigorously prosecute this case through its conclusion.9 Plaintiffs have amply demonstrated their commitment to date by reviewing court documents sent to them by their attorneys and monitoring the progress of the action.10 Thus, each of the Plaintiffs satisfies the adequacy requirement.11 2. Plaintiffs’ counsel has no conflicts with the class, is qualified and experienced, and will vigorously prosecute this action on behalf of the class. Rule 23(g) provides factors for the Court to assess in appointing class counsel: 9 Ex. 20, Deposition of Alan Sacerdote (“Sacerdote Dep.”) 22:6–22:22, 37:24–38:6, 43:3– 43:11, 49:8–50:2, 77:25–78:10, 83:16–83:21, 89:14–89:22, 102:4–103:6, 103:22–104:9; Ex. 21, Deposition of Marie Monaco (“Monaco Dep”) 7:14–8:3, 9:3–11:17; Ex. 22, Deposition of Lala Straussner (“Straussner Dep.”) 61:22–62:7, 62:12–62:18; Ex. 23, Deposition of Mark Crispin Miller (“Miller Dep.”) 15:14–16:8, 42:15–42:23, 64:9–64:20; Ex. 24, Deposition of Dr. Herbert Samuels (“Samuels Dep.”) 15:5–15:12, 18:24–19:5, 36:16–37:9, 59:14–59:19, 63:13–64:12, 80:11–80:21, 82:21–83:12, Ex. 25, Deposition of James Brown (“Brown Dep.”) 22:19–23:2, 28:5–28:9, 32:19–32:25. 10 Ex. 23 Miller Dep 12:6–12:18, 100:13–100:20, 116:21–117:16, 118:4–121:6 138:9–138:17, 141:10–141:20; Ex. 24 Samuels Dep. 17:12–17:5, 53:17–53:24, 56:6–56:21, 103:14–104:9; Ex. 20 Sacerdote Dep. 21:4–21:8; Ex. 22 Straussner Dep. 9:19–12:2, 124:16–124:21; Ex. 21 Monaco Dep. 12:23–14:10; Ex. 25 Brown Dep. 102:10–102:17, 108:20–110:5. 11 Plaintiffs Monaco and Miller inadvertently did not produce certain responsive electronic communications based on a misunderstanding of what exactly was requested. Upon discovering this oversight shortly before their depositions, both promptly produced the responsive materials. Ex. 21 Monaco Dep. 367:15–374:13; Ex. 23 Miller Dep. 118:4–120:2. Case 1:16-cv-06284-KBF Document 121 Filed 12/18/17 Page 20 of 28 15 (i) the work counsel has done in identifying or investigating potential claims in the action; (ii) counsel’s experience in handling class actions, other complex litigation, and the types of claims asserted in the action; (iii) counsel’s knowledge of the applicable law; and (iv) the resources that counsel will commit to representing the class. Fed.Civ.P. 23(g). Plaintiffs’ counsel—Schlichter Bogard & Denton LLP—has unparalleled experience in prosecuting ERISA fiduciary breach class actions such as this and will fairly and adequately represent the interests of the class. Declaration of Jerome J. Schlichter, ¶¶ 3–23. The firm conducted a lengthy investigation of potential claims in this action, and is committed to devoting all necessary resources to representing the class and vigorously prosecuting this action, as it has done in many prior ERISA fiduciary breach actions. Id. ¶¶ 6–23. The firm’s experience is shown by its appointment as class counsel in 20 other, large ERISA fiduciary breach class actions, where it obtained multi-million dollar settlements and judgments, as well as its involvement in Tibble, 135 S. Ct. 1823—the only defined contribution plan excessive fee case taken by the U.S. Supreme Court—in which it obtained a unanimous opinion in favor of ERISA plan participants, and two trial judgments for plan participants. Schlichter Decl. ¶¶7, 13. The firm is recognized as a “pioneer and the leader in the field” of defined contribution plan excessive fee litigation, Abbott v. Lockheed Martin Corp., No. 06-701, 2015 U.S.Dist.LEXIS 93206, *4–5 (S.D. Ill. July 17, 2015), and “clearly experts in ERISA litigation.” Tussey v. ABB, Inc., No. 06-4305, 2012 U.S.Dist.LEXIS 157428, *10 (W.D. Mo. Nov. 2, 2012). Thus, Schlichter Bogard & Denton LLP should be appointed class counsel under Rule 23(g). III. Plaintiffs meet the requirements of Rule 23(b). Having satisfied all the requirements of Rule 23(a), Plaintiffs need only satisfy one subsection of Rule 23(b). As noted, courts in similar ERISA fiduciary breach cases have Case 1:16-cv-06284-KBF Document 121 Filed 12/18/17 Page 21 of 28 16 overwhelmingly granted certification under Rule 23(b)(1), because “the distinctive ‘representative capacity’ aspect of ERISA participant and beneficiary suits makes litigation of this kind ‘a paradigmatic example of a [23](b)(1) class.’” In re Beacon, 282 F.R.D. at 342 (alteration in original)(quoting In re Global Crossing, 225 F.R.D. at 453, and collecting cases); see also, Schering, 589 F.3d at 604, collecting cases); Krueger, 304 F.R.D. at 575–78; In re Northrop Grumman Corp. ERISA Litig., No. 06-6213, 2011 U.S.Dist.LEXIS 94451, *62 (C.D. Cal. Mar. 29, 2011); Kanawi, 254 F.R.D. at 111; Tatum, 254 F.R.D. at 67; Tussey v. ABB Inc., No. 06-4305, 2007 U.S.Dist.LEXIS 88668, *27 (W.D. Mo. Dec. 3, 2007).12 In the alternative, if the Court were to somehow find Rule 23(b)(1) certification inappropriate, Plaintiffs seek certification under Rule 23(b)(3) because Defendants’ actions and omissions on a Plan- and class-wide basis ensure that common questions predominate over any individual issues, and resolving the Plans’ claims in a class-wide proceeding is vastly superior to individual adjudications. A. The class should be certified under Rule 23(b)(1). Rule 23(b)(1) provides: A class action may be maintained if Rule 23(a) is satisfied and if . . . (1) prosecuting separate actions by or against individual class members would create a risk of: (A) inconsistent or varying adjudications with respect to individual class members that would establish incompatible standards of conduct for the party opposing the class; 12 See also, orders granting Rule 23(b)(1) certification in Leber, 2017 U.S.Dist.LEXIS 194293, *46–47 & n.17; Moreno, 2017 U.S.Dist.LEXIS 143208, *23–27; Koch v. Dwyer, No. 98-5519-, 2001 U.S.Dist.LEXIS 4085, *13–14 (S.D.N.Y. Mar. 22, 2001); George v. Kraft Foods Global Inc., 251 F.R.D. 338, 351–52 (N.D. Ill. 2008); Beesley v. Int’l Paper Co., No. 06-703, Doc. 240 (S.D. Ill. Sept. 30, 2008), vacated on other grounds, 633 F.3d 574 (7th Cir. 2011); Taylor v. United Techs. Corp., No. 06-1494, 2008 U.S.Dist.LEXIS 43655, at *15 (D. Conn. June 3, 2008); Loomis v. Exelon Corp., No. 06-4900, 2007 U.S.Dist.LEXIS 46893, *11 (N.D. Ill. June 26, 2007); Tibble v. Edison Int’l, No. 07-5359, 2009 U.S.Dist.LEXIS 120939, *20, *29 (C.D. Cal. June 30, 2009); Spano v. Boeing Co., 294 F.R.D. 114 (S.D. Ill. 2013); Abbott v. Lockheed Martin Corp., 286 F.R.D. 388, 405 (S.D. Ill. 2012), and Abbott, No. 06-701, Doc. 403 at 3–6, 12 (S.D. Ill. Aug. 1, 2014). Case 1:16-cv-06284-KBF Document 121 Filed 12/18/17 Page 22 of 28 17 or (B) adjudications with respect to individual class members that, as a practical matter, would be dispositive of the interests of the other members not parties to the individual adjudications or would substantially impair or impede their ability to protect their interests[.] Rule 23(b)(1)(A) “‘takes in cases where the party is obligated by law to treat the members of the class alike[.]’” Amchem, 521 U.S. at 614 (citation omitted). “One person may have rights against, or be under duties toward, numerous persons constituting a class, and be so positioned that conflicting or varying adjudications in lawsuits with individual members of the class might establish incompatible standards to govern his conduct.” Fed.R.Civ.P.23, Adv. Comm. Note, 1966 amend., sub. (b)(1)(A). Defendant’s fiduciary duties are owed to the Plan, and thus to all participants as a class. 29 U.S.C. §1104(a)(1). Defendant owed its fiduciary duties to all participants in the Plans, and hence to all class members. In discharging its duties to the Plans, Defendant, as fiduciary, was obligated to treat all participants (hence all class members) alike. Allowing 20,000 individual class members to pursue this action on behalf of the Plans could result in varying adjudications over whether Defendant breached is duties as alleged, whether Defendant is liable for these actions, and how to measure damages to the Plans and other relief. As to the administrative and recordkeeping fees claim, the fact-finder will have to determine the Plans’ losses by deciding—with expert testimony—how much the recordkeepers were paid, whether the services of all recordkeepers were necessary, and whether the fees were reasonable. For the imprudent investment options, the fact-finder will determine whether Defendant conducted a prudent and thorough investigation of Plan investments on an ongoing basis, whether the funds and options were prudent and reasonably priced, and the proper benchmark alternative to measure losses to the Plans. See, e.g., Tussey v. ABB Inc., 850 F.3d 951, 959 (8th Cir. 2017)(where fiduciary breached its duty in replacing a fund with a fund that benefited the Case 1:16-cv-06284-KBF Document 121 Filed 12/18/17 Page 23 of 28 18 fiduciary and plan recordkeeper, the district court must measure the plans’ resulting losses). Injunctive relief may be appropriate to require a removal of certain investment options or a bidding process to replace the Plans’ recordkeepers. See, e.g., Tussey v. ABB, Inc., No. 06-4305, 2012 U.S.Dist.LEXIS 45240, *114 (W.D. Mo. Mar. 31, 2012)(ordering breaching fiduciary to “utilize[ ] a competitive bidding process . . . to select a new recordkeeper”). Separate individual adjudications to resolve any one of these issues would create incompatible standards for Defendant in so far as losses or profits it must restore to the Plans under §1109(a), and what Defendant must do to the Plans’ investment options and service providers. As numerous courts have recognized, these claims satisfy the requirements for certification under Rule 23(b)(1)(A). Piazza, 273 F.3d at 1352–53; Krueger, 304 F.R.D. at 576–77 (citing cases); Tibble, 2009 U.S.Dist.LEXIS 120939, *20–21, 27; Stanford v. Foamex L.P., 263 F.R.D. 156, 173 (E.D. Pa. 2009). Rule 23(b)(1)(B), however, asks whether one participant’s action over these claims “as a practical matter, would be dispositive of the interests” of the other participants’ actions over the same claims because they concern the same actions, damages, and fiduciary duties owed to the Plans. Fed.R.Civ.P. 23(b)(1)(B). “[A]n action which charges a breach of trust by an indenture trustee or other fiduciary similarly affecting the members of a large class of security holders or beneficiaries, and which requires an accounting or like measures to restore the subject of the trust” is a typical Rule 23(b)(1)(B) action. Fed.R.Civ.P. 23, Adv. Comm. Note, 1966 amend., sub. (b)(1)(B); Ortiz v. Fibreboard Corp., 527 U.S. 815, 834 (1999). Due to the trust-like nature of a defined contribution plan, with fiduciary duties owed to the plan and not to individual participants, many courts (including several in this Circuit) have found similar claims to be classic Rule 23(b)(1)(B) class actions. E.g., Leber, 2017 U.S.Dist.LEXIS 194293, *46–47 & n.17 Case 1:16-cv-06284-KBF Document 121 Filed 12/18/17 Page 24 of 28 19 (collecting cases); Moreno, 2017 U.S.Dist.LEXIS 143208, *23–27 (collecting cases); In re Beacon, 282 F.R.D. at 342; Koch v. Dwyer, No. 98-5519, 2001 U.S.Dist.LEXIS 4085, *13–14 (S.D.N.Y. Mar. 22, 2001). See also Schering, 589 F.3d at 604; Krueger, 304 F.R.D. at 577–78; Tatum, 254 F.R.D. at 67. Even if absent participants were not barred by res judicata from litigating the same claims on behalf of the Plans, as a “practical matter” a prior adjudication of whether the fiduciaries breached their duties to the Plans would influence a subsequent court’s adjudication of the same claims. Thus, Plaintiffs satisfy both Rule 23(b)(1)(A) and (b)(1)(B). B. In the alternative, the class should be certified under Rule 23(b)(3). When a class satisfies both Rule 23(b)(1) and Rule 23(b)(3), Rule 23(b)(1) controls. Leber, 2017 U.S. Dist. LEXIS 194293, *45–46; Charles Alan Wright, Arthur R. Miller, & Mary Kay Kane, 7AA FED. PRAC. & PROC. CIV. §1772 (3d ed.)(collecting cases); see also Piazza v. EBSCO Indus. Inc., 273 F.3d 1341, 1352 (11th Cir. 2001)(abuse of discretion to certify class for ERISA fiduciary breach claim under Rule 23(b)(3) rather than Rule 23(b)(1)). But if for any reason the Court were to reject certification under Rule 23(b)(1), certification is appropriate under Rule 23(b)(3) because common questions of law or fact predominate and a class action is the superior method of adjudicating the claims. Fed.R.Civ.P. 23(b)(3). Rule 23(b)(3)’s requirement that common issues of law or fact predominate is closely related to the Rule 23(a)(2) “commonality” requirement. This inquiry “tests whether proposed classes are sufficiently cohesive to warrant adjudication by representation.” Amchem, 521 U.S. at 623. Common issues predominate “if the plaintiff can establish that the issues in the class action that are subject to generalized proof, and thus applicable to the class as a whole, . . . predominate over those issues that are subject only to individualized proof.” Brown v. Kelly, 609 F.3d 467, Case 1:16-cv-06284-KBF Document 121 Filed 12/18/17 Page 25 of 28 20 483 (2d Cir. 2010)(quoting Cordes & Co. Fin. Servs., Inc. v. A.G. Edwards & Sons, Inc., 502 F.3d 91, 107-08 (2d Cir. 2007)); see also Tyson Foods, Inc. v. Bouaphakeo, 136 S.Ct. 1036, 1045 (2016). Here, for the same reasons that commonality is satisfied, there are myriad issues of law and fact common to the members of the proposed class. Plan fiduciaries selected the Plan’s investment options and contracted with service providers for the Plans as a whole; such decisions were not made by, or on behalf of, any individual participant. The evidence relevant to Plaintiffs’ allegations involve Plan-level facts and are therefore the same for all Plan participants. The common issues regarding Defendants’ fiduciary breaches thus predominate in this case. A class action is far “superior to other available methods for fairly and efficiently adjudicating the controversy.” Fed. R. Civ. P. 23(b)(3). The “superiority” requirement asks the Court to consider: (A) the interests of members of the class in individually controlling the prosecution or defense of separate actions; (B) the extent and nature of any litigation concerning the controversy already commenced by or against members of the class; (C) the desirability or undesirability of concentrating the litigation of the claims in the particular forum; and (D) the difficulties likely to be encountered in the management of a class action. Fed.R.Civ.P. 23(b)(3). Class certification is “superior” when the “class action would achieve economies of time, effort, and expense, and promote . . . uniformity of decision as to persons similarly situated, without sacrificing procedural fairness or bringing about other undesirable results.” Amchem, 521 U.S. at 615 (internal citations omitted). As set forth above, litigation of 20,000 separate suits by individual participants is not feasible. The losses suffered by individual participants and beneficiaries are too small for individual members to enforce their rights through individual actions. No participants could Case 1:16-cv-06284-KBF Document 121 Filed 12/18/17 Page 26 of 28 21 economically pursue his individual claim on his own. Rule 23(b)(3) vindicates “the rights of groups of people who individually would be without effective strength to bring their opponents into court at all. . . .” Sykes v. Mel S. Harris & Assocs. LLC, 780 F.3d 70, 81 (2d Cir. 2015)(quoting Amchem, 521 U.S. at 617); see also id. (“The policy at the very core of the class action mechanism is to overcome the problem that small recoveries do not provide the incentive for any individual to bring a solo action prosecuting his or her rights.”)(quoting Mace v. Van Ru Credit Corp., 109 F.3d 338, 344 (7th Cir. 1997)); Crabill v. Trans Union, L.L.C., 259 F.3d 662, 665 (7th Cir. 2001) (“the core function of [the class action] is to enable the litigation of claims too small to warrant the costs of prosecuting a separate suit for each claim.”). Given the nature of the allegations seeking Plan-wide relief for the same Plan-level breaches of fiduciary duties, no class member has an interest in individually controlling the prosecution of this matter that seeks to recover losses on behalf of the Plans. Moreover, the judicial process and the resources of the federal courts would be severely burdened if the Plans’ participants pursued individual suits regarding the same conduct in potentially thousands of suits. Concentration of all litigation concerning the Plans’ fiduciaries and their duties in one action would be more economical and ensure uniformity of decision. It would undeniably save the parties and the courts considerable resources and effort by resolving questions concerning the Plans’ operation in a single litigation, rather than sorting out the disparate effects of many and possibly contradictory orders. Finally, because the common issues raised in this action predominate, the action will be manageable as a class action. Indeed, similar claims handled by Plaintiffs’ counsel involving large 401(k) plans have proceeded to trial on a class-wide basis with no manageability issues. See, e.g., Tibble v. Edison Int’l, 135 S. Ct. 1823, 1826 (2015); Tussey v. ABB, Inc., 746 F.3d 327, 336 (8th Cir. 2014). Thus, Rule 23(b)(3) Case 1:16-cv-06284-KBF Document 121 Filed 12/18/17 Page 27 of 28 22 certification would also be proper. CONCLUSION For these reasons, the Court should certify all of Plaintiffs’ claims as a class action under Rule 23(b)(1), and appoint Dr. Alan Sacerdote, Dr. Herbert Samuels, Mark Crispin Miller, Marie E. Monaco, Dr. Shulamith Lala Straussner, and James B. Brown as class representatives. Under Rule 23(g), the Court should also appoint Schlichter, Bogard & Denton LLP as class counsel. December 18, 2017 Respectfully submitted, /S/ Jerome J. Schlichter SCHLICHTER BOGARD & DENTON LLP Andrew D. Schlichter, Bar No. 4403267 Jerome J. Schlichter* Michael A. Wolff* Troy A. Doles* Heather Lea* Stephen M. Hoeplinger* James Redd, IV* 100 South Fourth Street, Suite 1200 St. Louis, Missouri 63102 (314) 621-6115, (314) 621-7151 (fax) aschlichter@uselaws.com jschlichter@uselaws.com mwolff@uselaws.com tdoles@uselaws.com hlea@uselaws.com shoeplinger@uselaws.com jredd@uselaws.com *admitted pro hac vice Attorneys for Plaintiffs Case 1:16-cv-06284-KBF Document 121 Filed 12/18/17 Page 28 of 28