Sanft v. Winnebago Industries, Inc., No. C01-3067-MWB (N.D. Iowa 5/7/2003)

• Decision Date: 07 May 2003
• Docket Number: No. C01-3067-MWB.,C01-3067-MWB.
• Parties: THOMAS SANFT and EDWARD LUPPEN, on their own behalf, and as representatives of a class of all other persons similarly situated, Plaintiffs, v. WINNEBAGO INDUSTRIES, INC.; WINNEBAGO INDUSTRIES, INC. DEFERRED COMPENSATION PLAN; WINNEBAGO INDUSTRIES, INC. DEFERRED INCENTIVE FORMULA BONUS PLAN; and, WINNEBAGO INDUSTRIES, INC. DEFERRED COMPENSATION PLAN AND DEFERRED BONUS PLAN TRUST, Defendants.
• Court: U.S. District Court — Northern District of Iowa

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THOMAS SANFT and EDWARD LUPPEN, on their own behalf, and as representatives of a class of all other persons similarly situated, Plaintiffs, v. WINNEBAGO INDUSTRIES, INC.; WINNEBAGO INDUSTRIES, INC. DEFERRED COMPENSATION PLAN; WINNEBAGO INDUSTRIES, INC. DEFERRED INCENTIVE FORMULA BONUS PLAN; and, WINNEBAGO INDUSTRIES, INC. DEFERRED COMPENSATION PLAN AND DEFERRED BONUS PLAN TRUST, Defendants.

No. C01-3067-MWB.

United States District Court, N.D. Iowa, Central Division.

May 7, 2003.

MEMORANDUM OPINION AND ORDER REGARDING PLAINTIFF'S MOTION FOR CLASS CERTIFICATION

MARK BENNETT, District Judge.

I. INTRODUCTION AND BACKGROUND

On August 20, 2001, plaintiff Thomas Sanft, on his own behalf and as representative of a class of persons similarly situated, filed this lawsuit under the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001, et seq., against his former employer, Winnebago Industries, Inc. ("Winnebago"), Winnebago Industries, Inc. Deferred Compensation Plan ("Deferred Compensation Plan"), Winnebago Industries, Inc. Deferred Incentive Formula Bonus Plan ("Deferred Bonus Plan"), Winnebago Industries, Inc. Deferred Compensation Plan And Deferred Bonus Plan Trust ("the Trust").

On December 28, 2001, plaintiff Sanft filed an amended complaint in this matter. On January 31, 2003, United States Magistrate Judge Paul A. Zoss granted plaintiff Sanft's motion to amend the complaint for a second time to add Edward Luppen as a named representative plaintiff in this matter. In their Second Amended and Substituted Complaint and Jury Demand, plaintiffs seek relief against defendants for improperly and illegally reducing Sanft's rightful retirement benefits. Specifically, plaintiffs allege the following claims in their Second Amended and Substituted Complaint: declaratory judgment (Count I); breach of contract regarding the Deferred Compensation Plan (Count II); breach of contract with respect to the Deferred Bonus Plan (Count III); promissory estoppel (Counts IV & XI); unjust enrichment (Counts V & XII); breach of the trust agreement (Counts VI, XIV & XV); breach of contract through violation of ERISA's vesting requirements (Count VII); breach of fiduciary duty (Count VIII); violation of ERISA's vesting requirements (Count IX); violation of ERISA's funding requirements (Count X); breach of fiduciary duties owed under the trust agreement (Count XIII), and common law fraud (Count XVI).

On February 3, 2003, plaintiff Sanft filed his Motion For Class Certification in which he seeks to have the court certify a class under Federal Rule of Civil Procedure 23(b)(2) or, alternatively, under Federal Rule of Civil Procedure 23(b)(1) or 23(b)(3), described as follows:

All persons who made deferrals into the Winnebago Industries, Inc. Deferred Compensation Plan or the Winnebago Industries, Inc., Deferred Incentive Formula Bonus Plan, who were vested in their right to receive benefits under one or both of these plans at the time Defendants retroactively reduced the benefits of some participants under the Plans, and whose benefits were reduced as a result of actions of the Defendants.

Plaintiff's Mot. For Class Certification at ¶ 3.¹ Plaintiff Sanft contends that this class satisfies the requirements of Rule 23(a) as to numerosity, commonality, typicality, and adequacy of representation. Defendants filed a timely resistance to plaintiff Sanft's Motion For Class Certification on March 7, 2003, in which they resist the motion on the ground that plaintiff Sanft is unable to meet the prerequisites for class certification. Specifically, defendants assert that plaintiff Sanft cannot establish that the class is so numerous as to make joinder impracticable. Defendants also argue that half of the purported class lack standing to bring this lawsuit because they were not participants in the disputed plan at the time the lawsuit was filed. Defendants further contend that plaintiff Sanft cannot establish a basis for certification under Federal Rule of Civil Procedure 23(b)(1), (2), or (3).

The court held telephonic oral arguments on plaintiff Sanft's Motion For Class Certification on May 2, 2003. At the oral arguments, plaintiff Sanft was represented by William T. McCartan and Donald G. Thompson of Bradley & Riley, P.C., Cedar Rapids, Iowa. Defendants were represented by Gene R. La Suer and Deborah M. Tharnish of Davis, Brown, Koehn, Shors & Robert, P.C., Des Moines, Iowa. The parties have filed comprehensive briefs in support of their respective positions.

II. LEGAL ANALYSIS

A. Class Action Requirements Of Rule 23(a)

Rule 23(a) of the Federal Rules of Civil Procedure identifies the prerequisites for a class action as follows:

(a) Prerequisites to a Class Action. One or more members of a class may sue or be sued as representative parties on behalf of all only if (1) the class is so numerous that joinder of all members is impracticable, (2) there are questions of law or fact common to the class, (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class, and (4) the representative parties will fairly and adequately protect the interests of the class.

FED. R. CIV. P. 23(a); see generally Alpern v. Utilicorp United, Inc., 84 F.3d 1525, 1539 (8th Cir. 1996); accord Smilow v. Southwestern Bell Mobile Sys., Inc., 323 F.3d 32, 37 (1st Cir. 2003); O'Sullivan v. Countrywide Home Loans, Inc., 319 F.3d 732, 737 (5th Cir. 2003); In re Veneman, 309 F.3d 789, 792 (D.C. Cir. 2002); Uhl v. Thoroughbred Tech. & Telcomm., Inc., 309 F.3d 978, 985 (7th Cir. 2002); Coleman v. General Motors Acceptance Corp., 296 F.3d 443, 446 (6th Cir. 2002); Franze v. Equitable Assurance, 296 F.3d 1250, 1252 (11th Cir. 2002); In re Visa Check/MasterMoney Antitrust Litig., 280 F.3d 124, 132-33 (2d Cir. 2001), cert. denied, 536 U.S. 917 (2002); Johnston v. HBO Film Mgt., Inc., 265 F.3d 178, 183 (3rd Cir. 2001); In re Prudential Ins. Co. of America Sales Litig., 148 F.3d 283, 308-09 (3rd Cir. 1998). These four prerequisites for class certification under Rule 23(a) are commonly referred to as "numerosity, commonality, typicality, and adequacy of representation." General Telephone Co. v. E.E.O.C., 446 U.S. 318, 330 (1980); Piazza v. Ebsco Indus., Inc., 273 F.3d 1341, 1345 (11th Cir. 2001) (quoting General Telephone Co., 446 U.S. at 330). A plaintiff moving for class certification has the burden of showing that the class should be certified and that the requirements of Rule 23 are met. See Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 614 (1997); Coleman v. Watt, 40 F.3d 255, 258 (8th Cir. 1994) (citing Smith v. Merchants & Farmers Bank of West Helena, 574 F.2d 982, 983 (8th Cir. 1978)); Howe v. Varity Corp., 896 F.2d 1107, 1111 (8th Cir. 1990); Smith v. Merchants & Farmers Bank of West Helena, Ark., 574 F.2d 982, 983 (8th Cir. 1978); Parkhill v. Minnesota Mut. Life Ins. Co., 188 F.R.D. 332, 336 (D.Minn. 1999), aff'd, 286 F.3d 1051 (8th Cir. 2001); Jenson v. Eveleth Taconite Co., 139 F.R.D. 657, 659 (D.Minn. 1991); accord General Motors Acceptance Corp., 296 F.3d at 446; Bishop v. New York City Dep't of Hous. Preservation and Dev., 141 F.R.D. 229, 234 (S.D.N.Y. 1992). In addition to satisfying the threshold requirements of Rule 23(a), a class action may be maintained only if it qualifies under at least one of the categories provided in Federal Rule of Civil Procedure 23(b). See Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 613-16 (1997); Smilow, 323 F.3d at 37; General Motors Acceptance Corp., 296 F.3d at 446; Franze, 296 F.3d at 1252; In re Visa Check/MasterMoney Antitrust Litig., 280 F.3d at 133; see also Rutstein v. Avis Rent-A-Car Sys., Inc., 211 F.3d 1228 (11th Cir. 2000), cert. denied sub nom. Zeirei Agudath Israel Bookstore v. Avis Rent-A-Car Sys., Inc., 532 U.S. 919 (2001). The district court's determination of whether or not to certify a class will be set aside only if there was an abuse of discretion. Coleman, 40 F.3d at 259; Arthur Young & Co. v. Reves, 937 F.2d 1310, 1323 (8th Cir. 1991) ("`A district court has broad discretion in determining whether to certify a class, and its determination will not be overturned absent a showing that it abused its discretion,'" quoting Gilbert v. City of Little Rock, 722 F.2d 1390, 1399 (8th Cir. 1983), cert. denied, 466 U.S. 972 (1984)), rev'd on other grounds, 507 U.S. 170 (1993); accord O'Sullivan, 319 F.3d at 737 (noting that review of the certification of a class is for abuse of discretion); Newton v. Merrill, Lynch, Pierce, Fenner & Smith, 259 F.3d 154, 165 (3rd Cir. 2001) (noting that court reviews a decision granting or denying class certification for abuse of discretion).

The court must engage in a "rigorous analysis" to determine whether all the prerequisites of Rule 23(a) are satisfied. General Tel. Co. v. Falcon, 457 U.S. 147, 161 (1982); Newton, 259 F.3d at 165.² To determine whether the requirements of Rule 23(a) have been satisfied, the court must examine the factual basis for the plaintiff's claims and may examine not only the pleadings but also the evidentiary record, including any affidavits and results of discovery. See Newton, 259 F.3d at 165 (noting that when conducting an examination of the factual and legal allegations for the purposes of class certification, "`it may be necessary for the court to probe behind the pleadings before coming to rest on the certification question.'") (quoting Falcon, 457 U.S. at 160); Szabo v. Bridgeport Machs. Inc., 249 F.3d 672, 676 (7th Cir.) (holding that a court was not required to accept allegations in complaint as true when determining whether to grant class certification, but instead must make whatever factual and legal inquiries that are necessary to ensure that prerequisites and requirements for class certification are satisfied), cert. denied, 534 U.S. 951 (2001); In re Buspirone Patent Litig., 210 F.R.D. 43, 56-57 (S.D.N.Y. 2002) (noting that while a court should "refrain from deciding any...