Compass Lexecon Client Successfully Defeats Class Certification in ERISA Litigation
Compass Lexecon client Prudential Insurance Company of America successfully defeated class certification in a matter brought by Plaintiffs representing a putative class of employer-sponsored life insurance beneficiaries. Plaintiffs contended that the method of payment of the life insurance benefits did not follow plan policies which stated that payment would normally be made in “one sum.” They claimed that Prudential breached its fiduciary duties under the Employee Retirement Income Security Act of 1974 (ERISA) and state law by investing the benefits (held in interest-bearing checking or “retained asset” accounts) for its own benefit before beneficiaries withdrew the funds.
Beyond the dispositive technical legal grounds, the decision by Judge Joseph F. Leeson, Jr. of the US District Court for the Eastern District of Pennsylvania noted that many of the beneficiaries used their retained asset accounts like checking accounts, “and interest bearing ones at that,” with some withdrawing all of the funds right away and one class representative writing 35 checks, a perspective that was emphasized and rigorously documented in Professor Robert Willig’s expert report. Prudential was successfully represented by Alison V. Douglass, Dave Rosenberg, James O. Fleckner, Jordan D. Weiss and Michael K. Isenman of Goodwin Procter LLP. Professor Willig was supported by a team at Compass Lexecon led by Colleen Loughlin that included Laura Yergesheva and Andrew Lin.