Masten v. Metropolitan Life Insurance Company
1:18-cv-11229
S.D.N.Y.Sep 7, 2023Background
- Plaintiffs are former MetLife employees and participants in the MetLife Retirement Plan who challenge how joint and survivor annuities (JSAs) were calculated under the Plan’s Traditional Part.
- Plaintiffs allege the Plan used outdated mortality assumptions that produced JSAs below the actuarial equivalence required by ERISA, reducing monthly benefits compared to the single life annuity (SLA) offered.
- Plaintiffs moved to certify a class of 1,824 participants who began benefits on or after Jan. 1, 2013, elected JSAs with 50–100% survivorship, whose benefits were calculated under the Traditional formula, excluding an “as of June 2008” group with a different benefit structure.
- Defendants objected to certification on three grounds: (1) Plaintiffs’ expert methodology is flawed; (2) the class improperly excludes certain plan participants; and (3) a subclass of members who signed releases cannot be certified because release issues are individualized.
- Magistrate Judge Wang recommended certification and creating two subclasses (those who signed releases and those who did not); Judge Abrams adopted the R&R and certified the class under Fed. R. Civ. P. 23(b)(1)(A), appointing class representatives and counsel.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Expert methodology for proving actuarial inequivalence | Use SLA amounts actually offered (from plan data) and convert to hypothetical JSAs using updated mortality to show JSAs are undervalued | Plaintiffs’ two-step approach is improper; conversions must apply consistent assumptions to both SLA and JSA (both derived from CLA) — plaintiffs’ method misapplies Plan terms | Court: methodological dispute is a merits question; plaintiffs’ model is a viable, classwide method for certification and merits can be addressed later |
| Excluding the “as of June 2008” participants from class | Those participants have different benefit structure and subsidized JSAs; exclusion narrows class to those with the same formula and harm | Exclusion gerrymanders class and fails to protect all similarly affected participants | Court: exclusion is appropriate because the excluded group’s benefit structure differs materially; certification need not include all plan participants |
| Subclass of participants who signed releases | Releases contain similar carveouts preserving vested ERISA benefits and are sufficiently uniform to handle classwide | Enforceability (knowing/voluntary) and differing release terms require individualized inquiries making subclass unsuitable | Court: releases are substantially similar and amenable to class treatment; individualized issues, if any, can be managed later; subclass stands |
| Proper Rule 23(b) vehicle | Class seeks consistent adjudication of how Plan assumptions should be applied to all members | If individual suits proceed, inconsistent orders would create conflicting fiduciary obligations for MetLife | Court: certifies under Rule 23(b)(1)(A) because separate suits risk inconsistent adjudications and incompatible standards of conduct for defendant |
Key Cases Cited
- Amgen Inc. v. Connecticut Retirement Plans & Trust Funds, 568 U.S. 455 (2013) (merits questions may be considered at certification only insofar as they relate to Rule 23 requirements)
- Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338 (2011) (commonality requires common questions capable of classwide resolution)
- Comcast Corp. v. Behrend, 569 U.S. 27 (2013) (plaintiffs must present a model capable of measuring classwide damages attributable to their theory)
- Shahriar v. Smith & Wollensky Rest. Grp., Inc., 659 F.3d 234 (2d Cir. 2011) (district courts must resolve factual disputes relevant to Rule 23 prerequisites)
- Teamsters Local 445 Freight Div. Pension Fund v. Bombardier Inc., 546 F.3d 196 (2d Cir. 2008) (plaintiffs must produce enough evidence to satisfy each Rule 23 requirement)
- In re U.S. Foodservice Inc. Pricing Litig., 729 F.3d 108 (2d Cir. 2013) (a contested expert battle is generally inappropriate at class-certification if plaintiffs’ methodology is capable of classwide application)
- Amchem Products, Inc. v. Windsor, 521 U.S. 591 (1997) (Rule 23(b)(1)(A) can be appropriate where separate suits would create inconsistent standards of conduct)
- General Telephone Co. v. Falcon, 457 U.S. 147 (1982) (district court retains discretion to modify class orders as litigation develops)