Spano v. the Boeing Co.
633 F.3d 574
| 7th Cir. | 2011Background
- ERISA defined-contribution plans (including 401(k)) at Boeing and International Paper were challenged for fiduciary duties via planned fees, investments, and communications.
- District court certified class actions under Rule 23(b)(1) in both cases; Boeing and IP sought interlocutory review under Rule 23(f).
- Court must decide if the district court properly certified the classes, not the underlying merits of ERISA claims.
- LaRue v. DeWolff held that 502(a)(2) may compensate plan assets in defined-contribution plans, potentially supporting class claims.
- Schering-Plough ERISA Litigation analyzed class certification in stock-fund contexts and emphasized limitations when class definitions are too broad or misaligned with typicality/adequacy.
- Court notes potential intra-class conflicts and contemplates remand to redefine classes to satisfy Rule 23(a) and (b).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Spano class meets Rule 23(a) prerequisites | Spano argues common questions and plan-wide harm justify class | Boeing contends lack of commonality/typicality due to individual investments | Rule 23(a) not satisfied; vacate and remand for narrower class |
| Whether the Beesley class meets Rule 23(a) prerequisites | Beesley argues plan-wide misrepresentations and fees affect all | IP asserts individualized reliance and fund-specific effects | Rule 23(a) not satisfied; vacate and remand for narrower class |
| Whether Rule 23(b) mandatorily can apply or require dismissal/remand | Mandatory class treatment appropriate to avoid inconsistent standards | Mandatory relief risks due process; not appropriate here | Ortiz cautioned against overuse; remand to redefine class for proper 23(b) analysis |
| Impact of LaRue on class action viability in defined-contribution plans | LaRue supports plan-level relief that can affect all participants | LaRue was an individual-case; class viability unclear | LaRue does not resolve class viability; remand to determine proper class scope |
Key Cases Cited
- Massachusetts Mut. Life Ins. Co. v. Russell, 473 U.S. 134 (U.S. 1985) (defined-benefit plan injuries require plan-wide breach to seek §409(a) relief)
- LaRue v. DeWolff, Boberg & Assocs., Inc., 552 U.S. 248 (U.S. 2008) (502(a)(2) injuries may affect individual account in a defined-contribution plan)
- Ortiz v. Fibreboard Corp., 527 U.S. 815 (U.S. 1999) (cautions against overuse of Rule 23(b)(1) in complex class actions)
- General Telephone Co. of the Southwest v. Falcon, 457 U.S. 147 (U.S. 1982) (Rule 23(a) typicality and commonality; representative must stand in same position as class members)
- Schering-Plough Corp. ERISA Litig., 589 F.3d 585 (3d Cir. 2009) (class-action considerations in defined-contribution ERISA plan contexts)
- Harzewski v. Guidant Corp., 489 F.3d 799 (7th Cir. 2007) (illustrates plan-wide harms from fiduciary breaches in defined-contribution plans)
- Wise v. Verizon Communications Inc., 600 F.3d 1180 (9th Cir. 2010) (example of plan-wide injury analysis in benefit claims)
- Rogers v. Baxter Int’l, Inc., 521 F.3d 702 (7th Cir. 2008) (LaRue-related analysis in defined-contribution context; remand guidance)