333 F.R.D. 324 (D.Del. 2019), C. A. 17-250-RGA, Guidry v. Wilmington Trust, N.A.

Docket Nº:Civil Action 17-250-RGA
Citation:333 F.R.D. 324, 105 Fed.R.Serv.3d 603
Opinion Judge:ANDREWS, U.S. DISTRICT JUDGE
Party Name:Lyle J. GUIDRY and Rodney Choate, on Behalf of the MRMC ESOP and a Class of all Other Persons Similarly Situated, Plaintiff, v. WILMINGTON TRUST, N.A., as Successor to Wilmington Trust Retirement and Institutional Services Company, Defendant.
Attorney:David A. Felice, BAILEY & GLASSER, LLP, Wilmington, DE; Gregory Y. Porter, Patrick Muench, Charleston, and Ryan T. Jenny, BAILEY & GLASSER, LLP, Washington, DC; Daniel Feinberg and Todd Jackson, FEINBERG, JACKSON, WORTHMAN & WASOW LLP, Berkeley, CA, attorneys for Plaintiff. Albert H. Manwaring, I...
Case Date:December 10, 2019
Court:United States District Courts, 3th Circuit, District of Delaware

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333 F.R.D. 324 (D.Del. 2019)

105 Fed.R.Serv.3d 603

Lyle J. GUIDRY and Rodney Choate, on Behalf of the MRMC ESOP and a Class of all Other Persons Similarly Situated, Plaintiff,

v.

WILMINGTON TRUST, N.A., as Successor to Wilmington Trust Retirement and Institutional Services Company, Defendant.

Civil Action No. 17-250-RGA

United States District Court, D. Delaware

December 10, 2019

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[Copyrighted Material Omitted]

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David A. Felice, BAILEY & GLASSER, LLP, Wilmington, DE; Gregory Y. Porter, Patrick Muench, Charleston, and Ryan T. Jenny, BAILEY & GLASSER, LLP, Washington, DC; Daniel Feinberg and Todd Jackson, FEINBERG, JACKSON, WORTHMAN & WASOW LLP, Berkeley, CA, attorneys for Plaintiff.

Albert H. Manwaring, IV, MORRIS JAMES LLP, Wilmington, DE; Michael J. Prame, Edward J. Meehan, Ross P. McSweeney, GROOM LAW GROUP, Washington, D.C., attorneys for Defendant.

MEMORANDUM OPINION

ANDREWS, U.S. DISTRICT JUDGE

Plaintiff Rodney Choate alleges Defendant Wilmington Trust breached its fiduciary duties under the Employee Retirement Income Security Act (ERISA) by causing an employee pension plan to overpay for company stock. Currently before the Court is Plaintiff’s Motion for Class Certification. (D.I. 80). For the reasons discussed below, the motion is GRANTED.

I. BACKGROUND

The Martin Resource Management Corporation (MRMC) is a privately-held company that transports petroleum products and other bulk liquids. (D.I. 31 at 7). In January 2012, MRMC created an Employee Stock Ownership Plan (ESOP)— a retirement benefit for employees made up primarily of stock in the employer company. (Id. at 8). MMRC appointed Wilmington Trust as the trustee of the ESOP. (Id. at 9). Under ERISA, an ESOP trustee may not pay more than "adequate consideration" for the employer’s stock. 29 U.S.C. § 1108(e)(1).

Plaintiff is challenging two ESOP transactions. In the first transaction, on October 2, 2012, the Plan purchased 3,066.5 shares of MRMC preferred stock and 738 shares of MRMC common stock for $233 million. (D.I. 31 at 9). After a stock split and conversion of preferred stock into common stock, this transaction became 95,112.5 shares of common stock. (Id. at 10). In the second transaction, on December 23, 2013, the Plan bought an additional 89,049.5 shares of MMRC common stock for $142.5 million. (Id. at 11). According to Plaintiff, the shares from both transactions are only worth about $79 million now. (D.I. 81 at 1). Wilmington Trust is responsible for both transactions in its capacity as trustee of the ESOP. (D.I. 31 at 9, 11).

Lyle J. Guidry sued Wilmington Trust over the transactions in March 2017, and Rodney Choate sued the next month. The cases were consolidated in May 2017. (D.I. 12). Guidry died on August 26, 2018, leaving Choate to pursue this action. (D.I. 124).

Choate was employed as a boat captain for an MRMC subsidiary from November 2006 until about April 2013. (D.I. 85, Ex. 5, "Choate Decl.," at 1). He became a participant in the ESOP when it started in 2012. (Id. ) Because he left the company before his retirement account fully vested, Choate forfeited

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about 80 percent of his potential benefits. (D.I. 93 at 3).

II. LEGAL STANDARD

A class action is "an exception to the usual rule that litigation is conducted by and on behalf of the individual named parties only." Comcast Corp. v. Behrend, 569 U.S. 27, 33, 133 S.Ct. 1426, 185 L.Ed.2d 515 (2013). To qualify for this exception, a party "must affirmatively demonstrate his compliance" with Fed.R.Civ.P. 23 by a preponderance of the evidence. Reyes v. Netdeposit, LLC, 802 F.3d 469, 485 (3d Cir. 2015). "Merits questions may be considered to the extent— but only to the extent— that they are relevant to determining whether the Rule 23 prerequisites for class certification are satisfied." Amgen Inc. v. Connecticut Ret. Plans & Tr. Funds, 568 U.S. 455, 466, 133 S.Ct. 1184, 185 L.Ed.2d 308 (2013). The plaintiff must satisfy "the prerequisites of Rule 23(a): numerosity, commonality, typicality, and adequacy of the class representative." Shelton v. Bledsoe, 775 F.3d 554, 559 (3d Cir. 2015). Additionally, the "proposed class must satisfy at least one of the three requirements listed in Rule 23(b)." Wal-Mart Stores v. Dukes, 564 U.S. 338, 345, 131 S.Ct. 2541, 180 L.Ed.2d 374 (2011).

Plaintiff has sought certification under Rules...

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