275 F.R.D. 256
N.D. Ill.2011Background
- Plaintiffs claim ERISA fiduciary breaches related to the Tribune ESOP's leveraged buyout and seek certification of a class of ESOP participants.
- Tribune Company went private via an ESOP purchase; the Tribune declared bankruptcy months later and Plaintiffs allege ESOP stock holdings are worthless.
- Plaintiffs asserted claims under ERISA § 409 and § 502(a)(2) for breach of fiduciary duty and under § 502(a)(3) for equitable relief; prior rulings addressed standing and scope of equitable relief.
- The court previously held GreatBanc had standing to pursue equitable remedies and rejected limiting damages to a fixed amount; Zell and EGI-TRB were deemed fiduciaries only post-ESOP purchase for some claims.
- Plaintiffs move to certify a class defined as all Tribune ESOP participants or beneficiaries from 2007 onward, excluding certain defendants and affiliates.
- GreatBanc challenges adequacy of Neil and Bailey as class representatives, citing personal animus and potential conflicts of interest; Zell and EGI-TRB did not oppose certification but commented on adequacy.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the proposed class satisfies Rule 23(a). | Class satisfies numerosity, commonality, typicality, adequacy. | Potential issues with typicality/adequacy due to releases and personal animus. | Yes; the class satisfies 23(a) in all four elements. |
| Whether ERISA class action may be certified under Rule 23(b)(1) or (b)(2) or (b)(3). | Rule 23(b)(1) or (b)(2) appropriate for plan-wide relief; (b)(3) also discussed but not required. | Certification should be limited or avoided due to potential individualized issues; (b)(3) would require notice. | Certification appropriate under 23(b)(1) and 23(b)(2); not certified under 23(b)(3). |
| Whether the named plaintiffs Neil and Bailey are adequate class representatives. | No evidence of conflict or misconduct; their stakes align with the class interest. | Personal animus toward Zell and potential release-related issues threaten adequacy. | Neil and Bailey are adequate representatives; releases, if valid, narrow the class but do not defeat adequacy. |
| Whether the court should appoint class counsel under Rule 23(g). | Firms have substantial ERISA class action experience and resources. | None expressed; defendants did not oppose appointment. | Plaintiffs' counsel appointed as class counsel. |
Key Cases Cited
- Spano v. The Boeing Co., 633 F.3d 574 (7th Cir.2011) (typicality and class suitability in ERISA context; funds alignment)
- Oshana v. Coco‑Cola Co., 472 F.3d 506 (7th Cir.2006) (typicality and class representation in ERISA actions)
- Howell v. Motorola, Inc., 633 F.3d 552 (7th Cir.2011) (significance of releases affecting typicality of class representatives)
- In re Allstate Ins. Co., 400 F.3d 505 (7th Cir.2005) (incidental damages and 23(b)(2) certification in ERISA context)
- Berger v. Xerox Corp. Retirement Income Guarantee, 338 F.3d 755 (7th Cir.2003) (incidental damages; 23(b)(2) class appropriate when benefits read from plan)
- Schaner Plough Corp. ERISA Litig., 589 F.3d 585 (3d Cir.2009) (typicality and representation in ERISA class actions)
- Bieneman v. City of Chicago, 864 F.2d 463 (7th Cir.1988) (conflict-of-interest in class adequacy; applicability limits)
- Valley Drug Co. v. Geneva Pharm., Inc., 350 F.3d 1181 (11th Cir.2003) (adequacy and conflicts in class actions; economic-interest considerations)
- In re Evanston Northwestern Healthcare Corp. Antitrust Litig., 268 F.R.D. 56 (N.D.Ill.2010) (Bieneman-like conflicts; class certification despite potential benefits to some members)