Evans v. Akers
| Decision Date | 06 December 2006 |
| Docket Number | No. CIV.A.04 11380 WGY.,CIV.A.04 11380 WGY. |
| Citation | 466 F.Supp.2d 371 |
| Parties | Keri EVANS and Timothy Whipps, on behalf of themselves and a class of all others similarly situated Plaintiffs, v. John F. AKERS, Ronald C. Cambre Marye Anne Fox, John J. Murphy, Paul J. Norris, Thomas A. Vanderslice, H. Furlong Baldwin, Investments and Benefits Committee, Administrative Committee, Brenda Gottlieb, W. Brian McGowan, Michael Piergrossi, Robert M. Tarola, Eileen Walsh, David Nakashige, Elyse Napoli, Martin Hunter, Ren Lapadario, and Unknown Fiduciary Defendants 1-100 Defendants. |
| Court | U.S. District Court — District of Massachusetts |
Kenneth Betz, Arvada, CO, for Paul J. Norris, Defendant.
Jeffrey C Block, Berman DeValerio Pease Tabacco Burt & Pucillo, Boston, MA, James R. Cummins, Stanley M. Chelsey, Terrence L. Goodman, Jane H. Walker, Waite Schneider, Bayless & Chesley Co., LPA, Cincinnati, OH, Glen DeValerio, Berman DeValerio Pease, Boston, MA; for David Mueller, Jerry L. Howard, Sr., Lawrence Bunch, Consolidated Plaintiffs.
Katherine B. Bornstein, Schiffrin & Barroway, LLP, Radnor, PA, Edward W. Clolko, Schiffrin & Barroway, LLP, Bala Cynwyd, PA, Thomas J. Hart, Slevin & Hart, Washington, DC, David Pastor, Gilman and Pastor, LLP, Boston, MA, Gerald D. Wells, III, Schiffrin & Barroway, LLP, Cynwyd, PA, Joseph H. Meitzer, Schiffrin & Barroway, LLP, Radnor, PA, for Keri Evans, Plaintiff.
Gretchen A. Dixon, Caroline Turner English, Arent Fox PLLC, Washington, DC, for Administrative Committee, Investments and Benefits Committee, Brenda Gottlieb, H. Furlong Baldwin, John F. Akers, Marye Anne Fox, Michael Piergrossi, Paul J. Norris, Ronald C. Cambre, Thomas A. Vanderslice, W. Brian McGowan, Officer John J. Murphy, David Nakashige, Eileen Walsh, Elyse Napoli, Martin Hunter, Ren Lapadario, Defendants.
Carol Connor Flowe, Arent Fox PLLC, Washington, DC, for Administrative Committee, Investments and Benefits Committee, Brenda Gottlieb, H. Furlong Baldwin, John F. Akers, Officer John J. Murphy, Marye Anne Fox, Michael Piergrossi, Paul J. Norris, Ronald C. Cambre, Thomas A. Vanderslice, W. Brian McGowan, David Nakashige, Eileen Walsh, Elyse. Napoli, Martin Hunter, Ren Lapadario, Defendants.
John A.D. Gilmore, DLA Piper Rudnick Gray Cary U.S. LLP, Boston, MA, Arthur W.S. Duff, Robert N. Eccles, O'Melveny & Myers, Washington, DC, for Fidelity Management Trust Company, Defendant.
Nancy S. Heermans, Arent Fox PLLC, Washington, DC, for Administrative Committee Investments and Benefits Committee, Brenda Gottlieb, David Nakashige, Eileen Walsh, Elyse Napoli, H. Furlong Baldwin, John F. Akers, Officer John J. Murphy, Martin Hunter, Marye Anne Fox, Michael Piergrossi, Paul J. Norris, Ren Lapadario, Ronald C. Cambre, Thomas A. Vanderslice, W. Brian McGowan, Defendants.
Matthew C. Hurley, Mintz, Levin, Cohn, Ferris, Glovsky & Popeo, PC, Boston, MA, for Administrative Committee, Investments and Benefits Committee, Brenda Gottlieb, H. Furlong Baldwin, John F. Akers, Officer John J. Murphy, Marye Anne Fox, Michael Piergrossi, Paul J. Norris, Ronald C. Cambre, Thomas A. Vanderslice, W. Brian McGowan, State Street Bank & Trust Company, Fidelity Management Trust Company, David Nakashige, Eileen Walsh, Elyse Napoli, Martin Hunter, Ren Lapadario, Unknown Fiduciary Defendants 1-100, Fidelity Management Trust Company, State Street Bank & Trust Company, Defendants.
Joshua Irwin Paul, Hastings, John A. Reding, Janofsky & Walker, LLP, San Francisco, CA, David B Mack, Nixon Peabody LLP (BOS), Boston, MA, Sean T. Carnathan, O'Connor, Carnathan and Mack LLC, Burlington, MA, Scott M. Flicker, Paul, Hastings, Janofsky & Walker, LLP, Washington, DC, Thomas A. Rust Paul, Hastings, Janofsky & Walker LLP, Washington, DC, for State Street Bank and Trust Company, Consolidated Defendant.
Brian H. Mukherjee, Goodwin Procter, LLP, Boston, MA, Kirsten M. Nelson, Shearman & Sterling LLP, New York, NY, Gary S. Tell, O'Melveny & Myers LLP, Washington, DC, for Fidelity Management Trust Company, Defendant.
Valerie N. Webb, Arent Fox PLLC, Washington, DC, for Administrative Committee, Investments and Benefits Committee, Brenda Gottlieb, David Nakashige, Elyse Napoll, H. Furlong Baldwin, John F. Akers, Officer John J. Murphy, Martin Hunter, Marye Anne Fox, Michael Plergrossi, Paul J. Norris, Ren Lapadario, Ronald C. Cambre, Thomas A. Vanderslice, W. Brian McGowan, Defendants.
Jeffrey Robert Yousey, Nelson Kinder Mosseau & Saturley, PC, Manchester, NH, for Fidelity Management Trust Company, State Street Bank & Trust Company, Defendants.
The Court here considers the propriety of certifying a class consisting of all persons who were participants or beneficiaries of the W.R. Grace & Co. Savings and Investment Plan ("the Plan") at any time between July 1, 1999 and April 19, 2004.
W.R. Grace & Co. ("Grace") is a global supplier of catalysts and silica products, speciality construction chemicals and building materials, and container products. Am. Compl. [Doc. No. 53] ¶ 95. Grace has over 6,000 employees, operations in nearly 40 countries, and annual sales of approximately $2,000,000,000. Id.
Grace offered eligible employees the opportunity to participate in a Plan that permitted employees to save a certain percentage of their pay through regular payroll deductions and invest those savings in company stock through the Grace Stock Fund. Id. ¶¶ 42, 50. Matching company contributions were deposited in the employee stock plan and invested in Grace stock. Id. ¶ 56.
After January 1, 2001, however, employees were no longer permitted to invest matching company contributions in Grace stock but could otherwise direct investment of those funds. Id. ¶¶ 58, 61. These changes were made in light of "market uncertainty surrounding companies, like Grace, that have significant asbestos liability." Id. ¶ 62. Employees were still permitted to invest their own savings in Grace stock even as the stock price declined precipitously over the next two years. Id. ¶¶ 63, 65.
Finally, on April 17, 2003, the Grace Stock Fund ceased accepting contributions or allocations. Id. ¶ 67. From that point on, contributions were redirected to the Fixed Income Fund. Id. Nonetheless, past contributions were not redirected to other funds unless the participant expressly decided to change his investment options. See id. ¶ 69.
On February 27, 2004, Plan fiduciaries informed participants that investment in Grace Stock was "clearly imprudent." Id. ¶ 70. State Street Bank & Trust Company ("State Street"), the fund's investment manager, commenced a program to sell Grace stock. Id. State Street sold all Grace stock by April 16, 2004. Id. ¶ 74. On April 19, 2004, the Grace Stock Fund ceased to exist. Id.
Keri Evans and Timothy Whipps (the "Plaintiffs") are former employees of Grace who were participants of the Plan during the proposed class period. Id. ¶ 3. They allege that the defendants, as fiduciaries of the Plan, breached their duties to the Plan and Plan participants and beneficiaries in violation of ERISA, particularly with regard to the Plan's various and heavy holdings of Grace stock. Id. ¶ 4.
Specifically, the Plaintiffs allege that the defendants, each having certain responsibilities regarding, or authority over, the management of the investment of Plan assets, breached their fiduciary duties by (1) continuing to offer Grace common stock as a Plan investment option for participant contributions; (2) utilizing Grace securities for employer contributions to the Plan; and (3) maintaining the Plan's pre-existing heavy investment in Grace securities when the stock was no longer a prudent investment for the Plan. Id. ¶ 5.
The Plaintiffs also allege that certain defendants charged with the selection and monitoring of other Plan fiduciaries failed to (1) provide the "monitored" fiduciaries with material information regarding the imprudence of investing Plan assets in Grace securities; and (2) remove certain such fiduciaries whose deficient performance damaged the Plan and its participants. Id. ¶ 6.
The Plaintiffs further allege that certain defendants failed to communicate to the Plan participants complete and accurate information regarding the Plan's investment in Grace securities sufficient to advise participants of the true risks of investing their retirement savings in Grace stock. Id. ¶ 7.
The Plaintiffs allege that the defendants breached their duty of loyalty to the Plan and its participants by failing to avoid or ameliorate inherent conflicts of interests which crippled their ability to function as independent, single-minded fiduciaries with only the Plan's and its participants' best interests in mind. Id. ¶ 8.
Finally, the Plaintiffs allege that even if certain fiduciaries were not involved in the breach of fiduciary duty, these fiduciaries knew of and did nothing to stop, or even abate, the particular breach and were therefore liable for breach of their co-fiduciary duties in violation of 29 U.S.C. § 1105. Id.
This action was brought on behalf of the Plan and seeks to recover alleged losses to the Plan under 29 U.S.C. §§ 1109, 1132. Id. ¶ 10.
The Plaintiffs face a barrier to their standing to bring the instant action. Although ERISA's remedial purposes are to be interpreted broadly,1 only participants, beneficiaries, fiduciaries, and the Secretary of Labor may bring a civil action. See 29 U.S.C. § 1132(a). In the present case, "[t]he requirement that a claimant be a `participant' is a subject matter jurisdiction requirement as well as a standing issue under ERISA." Katzoff v. Eastern Wire Products Co., 808 F.Supp. 96, 98 (D.R.I.1992) (citations omitted).
ERISA defines a participant as "any employee or former employee ... who is or may become eligible to receive a benefit of any type from [the] employee benefit plan." 29 U.S.C. § 1002(7). In Firestone Tire &...
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Evans v. Akers
...the Plan's pre-existing heavy investment in Grace securities when the stock was no longer a prudent investment." Evans v. Akers, 466 F.Supp.2d 371, 374 (D.Mass.2006). The plaintiffs also alleged that other fiduciaries had breached their duty to monitor their co-fiduciaries and advise Plan p......
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In re Boston Scientific Corp. Erisa Litigation, Civil Action No. 06-10105-JLT.
...as a participant.1 This very issue has been the source of recent litigation, and is currently before the First Circuit on Appeal.2 In Evans v. Akers, Judge Young held that cashed out plan participants alleging a breach of fiduciary duty based on imprudent investment choices were seeking dam......
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Labor and employment law.
...ERISA). (5.) See 534 F.3d at 73, 76 (concluding claims for extra-contractual damages outside scope of ERISA). (6.) Evans v. Akers, 466 F. Supp. 2d 371, 373 (D. Mass. 2006) (introducing details of "W.R. Grace & Co. Savings and Investment Plan"), rev'd, 534 F.3d 65, 76 (1st Cir. 2008). Th......