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Cunningham v. Wawa, Inc.

United States District Court for the Eastern District of Pennsylvania

July 2, 2019, Decided; July 2, 2019, Filed

Civ. No. 18-3355


 [*534]  ORDER

Plaintiffs John Cunningham, David Ciuffetelli, Benjamin DiDonato, and John Rucki, Jr. challenge two amendments to Defendant Wawa, Inc.'s Employee Stock Ownership Plan that eliminated their right to hold Wawa stock through age 68 and forced them to sell their shares at a purportedly unfair price. (Compl., Doc. No. 1.) Plaintiffs seek to certify a Class of all terminated employee participants in the ESOP whose accounts were liquidated after September 12, 2015 for Counts I—IV, IX, and X in their Complaint. (Doc. No. 56.) They also seek to certify a Subclass of: (1) all Class members who participated in  [*535]  the ESOP before January 1, 2014 and were terminated on or after January 1, 2015 for Counts VI and VIII in their Complaint; and (2) all Class members who retired between January 1, 2011 and December 31, 2014 for Counts V—VIII in their Complaint. (Id.) Defendants challenge class certification as to only three claims. (Doc. No. 57.) I will grant Plaintiffs' Motion to Certify.


Established in 1992, the Wawa Employee Stock Ownership Plan is an ERISA-qualified employee benefit plan sponsored by Defendant Wawa; its primary asset is Wawa equity. (Compl. ¶¶ 3, 16, 29; Answer ¶¶ 3, 16, 29, Doc. No. 49.) The Retirement Plans Committee is the ESOP administrator. (Compl. ¶ 17; Answer ¶ 17.) Individual Defendants Culotta, Eckhardt, Morey, Pulos, Swartz, and Wiggins are Committee members and Wawa officers. (Compl. ¶¶ 18-24; Answer ¶¶ 18-24.) Individual Defendants Wood, Wright, and Stoeckel are the Trustees of the ESOP. (Compl. ¶¶ 25-27; Answer ¶¶ 25-27.)

The Wawa ESOP initially permitted all retired and terminated employees—including those terminated for cause—to continue to hold Wawa stock through the ESOP after their Wawa employment ended. (See ESOP (eff. Jan. 1, 2004), Doc. No. 56-3; see also Peterson Dep. 120:21-121:8, Doc. No. 77-3, Civ. No. 16-497; accord. Stipulation ¶ 2, Doc. No. 54.) As required by ERISA, Wawa periodically provided Summary Plan Descriptions of the Plan terms. (Compl. ¶¶ 37, 43, 46; Answer ¶¶ 37, 43, 46; Peterson Dep. 70:18-25); see also 29 U.S.C. § 1022(a). Each SPD stated that terminated employee participants would be "paid in the same form [**4]  and manner as retirement benefits," and that "no amendment to the Plan will reduce the benefit you have already earned or divest you of any entitlement to a benefit." (See 2004 SPD 8-9, Doc. No. 77-4, Civ. No. 16-497; 2006 SPD 9, Doc. No. 77-5, Civ. No. 16-497; 2011 SPD 9, Doc. No. 77-6, Civ. No. 16-497; 2014 SPD 12, Doc. No. 77-7, Civ. No. 16-497; accord. Joint Stipulation ¶ 1, Doc. No. 46.) The SPDs also provided that "if the total value of your benefit is more than $5,000, you may elect to delay payment until the April 1 of the year following the year you reach age 68." (See 2011 SPD 9; 2014 SPD 12; see also 2004 SPD 8-9; 2006 SPD 9 (until 2011, former employees could hold Wawa stock until age 70 1/2).)

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387 F. Supp. 3d 529 *; 2019 U.S. Dist. LEXIS 115023 **; 104 Fed. R. Serv. 3d (Callaghan) 82; 2019 WL 2929937

JOHN J CUNNINGHAM, et al., Plaintiffs, v. WAWA, INC., et al., Defendants.

Subsequent History: Appeal terminated, 08/13/2019

Appeal filed, 08/23/2019

Prior History: Cunningham v. Wawa, Inc., 2019 U.S. Dist. LEXIS 115020 (E.D. Pa., July 2, 2019)


stock, terminated, detrimental reliance, fiduciary duty, reformation, class-wide, certify, Defendants', liquidated, class certification, fiduciary, Retired, commonality, surcharge, Parties, certification, Plaintiffs', merits, rights, defendants breached, misrepresentations, employees, benefits, shares, misrepresentation claim, fair market value, class member, releases, purportedly, breached

Civil Procedure, Class Actions, Prerequisites for Class Action, Adequacy of Representation, Evidence, Burdens of Proof, Preponderance of Evidence, Commonality, Typicality, Special Proceedings, Certification of Classes, Compromise & Settlement, Numerosity, Pensions & Benefits Law, Civil Litigation, Causes of Action, Breach of Fiduciary Duty, Prerequisites for Class Action, Defenses, Demurrers & Objections, Affirmative Defenses, Res Judicata, Maintainability, Contracts Law, Remedies, Reformation, Equitable Relief, Defenses, Fraud & Misrepresentation, ERISA, Causes of Action