Pipefitters Local 636 Insurance Fund v. Blue Cross Blue Shield of Michigan
654 F.3d 618
| 6th Cir. | 2011Background
- The Fund is a ERISA multiemployer trust that switched in 2002 from insured BCBSM coverage to self-funded, funded by Fund assets.
- BCBSM administered the Fund’s self-funded plan under an Administrative Services Contract (ASC) including claims processing and financial management.
- From June 2002 to January 2004 BCBSM collected an OTG subsidy fee to subsidize non-group coverage; self-insured clients were not consistently charged.
- In January 2004 BCBSM unilaterally eliminated the OTG subsidy from the Fund, prompting the Fund to sue for breach of ERISA fiduciary duty.
- The district court granted summary judgment to BCBSM on disclosure and, on remand, addressed whether OTG violated Michigan law; the district court certified a class under Rule 23(a) and (b).
- The Sixth Circuit reversed the district court’s class certification, holding that ERISA fiduciary status must be determined on a contract-by-contract basis, making class certification improper under Rule 23(b)(3) and not warranted under Rule 23(b)(1)(A).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the OTG class certification was proper under Rule 23(b)(3). | Pipefitters contends common questions predominate due to OTG legality. | BCBSM argues individualized ERISA fiduciary status defeats commonality. | No; class certification under 23(b)(3) was improper. |
| Whether the ERISA fiduciary status issue renders class treatment superior. | Fund asserts common legal issue controls; class superior due to many plaintiffs. | BCBSM contends threshold fiduciary issue requires individualized inquiries. | Not superior; class action inappropriate. |
| Whether the district court conducted a rigorous Rule 23 analysis. | N/A | N/A | District court failed to perform a rigorous analysis; remand appropriate. |
| Whether certification under Rule 23(b)(1)(A) was appropriate. | N/A | N/A | Not appropriate; incompatible standards of conduct not shown. |
Key Cases Cited
- Gen. Tel. Co. of the Nw., Inc. v. Falcon, 457 U.S. 147 (1982) (rigorous analysis required for class certification)
- In re American Medical Sys., Inc., 75 F.3d 1069 (6th Cir. 1996) (rigorous analysis; avoid generalized certification when individualized proofs exist)
- Sprague v. Gen. Motors Corp., 133 F.3d 388 (6th Cir. 1998) (extensive analysis of Rule 23 prerequisites; en banc considerations)
- Amchem Prod., Inc. v. Windsor, 521 U.S. 591 (1997) (class certification standards and predominance/superiority considerations)
- Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (2011) (common questions must predominate; extremity of class treatment cautioned)
- Katz v. Carte Blanche Corp., 496 F.2d 747 (3d Cir. 1974) (superiority considerations and public-interest factors in class actions)