Anthony Abbott v. Lockheed Martin Corporation
86 Fed. R. Serv. 3d 6
7th Cir.2013Background
- Plaintiffs (participants in Lockheed Martin’s Salaried and Hourly defined-contribution plans) sued for breach of fiduciary duty under ERISA Sections 409 and 502(a)(2)-(3), alleging the Plan’s stable-value fund (SVF) was imprudently managed and yielded inadequate returns.
- The SVF allegedly held an excessive allocation to short-term money‑market securities, producing returns that “did not beat inflation by a sufficient margin.”
- Plaintiffs proposed a class limited to participants who held SVF units during Sept. 11, 2000–Sept. 30, 2006 and whose SVF performance underperformed the Hueler FirstSource Universe Index (Hueler Index).
- The district court denied certification, viewing the Hueler Index reference as improperly prejudging damages/merits and finding typicality problems.
- On appeal the Seventh Circuit addressed standing, the propriety of using the Hueler Index in the class definition, whether the surviving theory at summary judgment foreclosed an imprudence claim, and the district court’s authority to amend class definitions under Rule 23(c)(1).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Article III standing of original named plaintiff (DeMartini) | DeMartini’s pleadings and evidence show injury from SVF investment; standing satisfied at pleading/summary stages | DeMartini lacked injury under Hueler Index so lacked Article III standing and court lacked jurisdiction | Court: Plaintiffs met burden; lack of damages under a provisional damages metric does not negate Article III standing at this stage |
| Use of Hueler Index in class definition | Hueler Index is a provisional, reasonable benchmark to limit class to injured members and avoid including beneficiaries who may have profited | Inclusion of Hueler Index prejudges merits/damages and improperly back doors resolution of contested issue | Court: Reference to Hueler Index for class certification is permissible; it is a case-management tool and does not bind merits or final damages choice |
| Scope of surviving claim after summary judgment (imprudence vs. misrepresentation) | Plaintiffs maintain an imprudence theory—SVF was an imprudent retirement investment for participants, supported by multiple factual allegations | Lockheed contends summary judgment left only misrepresentation/omission theory and deems imprudence unsuitable for class treatment | Court: Record and district court orders show imprudence claim survived; DeBruyne does not bar using comparisons to other stable-value funds as evidence |
| District court’s authority to amend class definition later (Rule 23(c)(1)) | Class certification is provisional; court may alter/amend class definition before final judgment if needed | District court thought approving a class tied to Hueler Index would be insufficiently tentative to allow later amendment | Court: Rule 23(c)(1) permits modification; certifying the class with Hueler Index is not more permanent than other class definitions and is amenable to later adjustment |
Key Cases Cited
- Spano v. Boeing Co., 633 F.3d 574 (7th Cir. 2011) (guidance on class certification in ERISA §502(a)(2) suits involving defined‑contribution plans)
- Ross v. RBS Citizens, N.A., 667 F.3d 900 (7th Cir. 2012) (approving narrowly defined classes tied to the specific cohort affected by defendant’s conduct)
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (U.S. 1992) (standards for Article III injury‑in‑fact at pleading/summary stages)
- DeBruyne v. Equitable Life Assurance Soc., 920 F.2d 457 (7th Cir. 1990) (limits of expert comparisons to other funds; plaintiffs must produce probative evidence)
- Messner v. Northshore Univ. Health Sys., 669 F.3d 802 (7th Cir. 2012) (abuse‑of‑discretion standard for class certification review and that merits uncertainty does not bar certification)