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Leber v. Citigroup 401(k) Plan Inv. Comm.

United States District Court for the Southern District of New York

November 27, 2017, Decided; November 27, 2017, Filed

07-Cv-9329 (SHS)

Opinion

 [*149]  OPINION & ORDER

SIDNEY H. STEIN, U.S. District Judge.

Plaintiffs are participants in Citigroup's 401(k) retirement plan (the "401(k) Plan" or the "Plan") and bring this putative class action against certain fiduciaries of the Plan, alleging that these fiduciaries violated their duties of prudence and loyalty pursuant to the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1001 et seq. Plaintiffs have now moved for class [**3]  certification. For the reasons explained below, plaintiffs' motion is granted.

I. Background

The Court assumes the parties' familiarity with this action's procedural history, which was recounted in detail in the Court's September 8, 2015, Opinion & Order on plaintiffs' motion to amend the complaint. See Leber v. Citigroup 401(k) Plan Inv. Comm., 129 F. Supp. 3d 4 (S.D.N.Y. 2015). In that Opinion & Order, the Court granted plaintiffs leave to file a fourth amended complaint ("4AC" or the "Fourth Amended Complaint"), which plaintiffs then filed on September 18, 2015. (4AC, ECF No. 211.) Plaintiffs now seek to certify the class proposed in their Fourth Amended Complaint under Federal Rule of Civil Procedure 23(b)(1) or, in the alternative, Rule 23(b)(3).

A. The Plan

This action involves allegations of self-dealing and imprudent fiduciary conduct related to the administration of Citigroup's 401(k) Plan. The Plan is a defined contribution plan, within the meaning of 29 U.S.C. § 1002(34). (See 4AC ¶ 25; Answer, ECF No. 228, ¶ 25.) In a defined contribution plan, each participant maintains an individual account, chooses from a menu of specific investment options, and is entitled to only those benefits stemming from the amounts contributed to his or her account. See Hughes Aircraft Co. v. Jacobson, 525 U.S. 432, 439, 119 S. Ct. 755, 142 L. Ed. 2d 881 (1999) (citing 29 U.S.C. § 1002(34)). In contrast to a defined contribution [**4]  plan, the second type of pension plan covered by ERISA — a defined benefit plan — is comprised of a "general pool of assets rather than individual dedicated accounts" and employees are entitled to fixed payments upon retirement. Hughes Aircraft, 525 U.S. at 439.1

The three named plaintiffs — Marya J. Leber, Sara L. Kennedy, and Sherri M. Harris2— are all participants in the 401(k) Plan, and claim that the committees responsible for overseeing the Plan during the putative class period,3 along with those committees' individual  [*150]  members and officers (collectively, "defendants"), breached their fiduciary duties of prudence and loyalty by persistently favoring certain investment options despite the fact that those options had higher management fees than comparable alternatives.

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323 F.R.D. 145 *; 2017 U.S. Dist. LEXIS 194293 **; 99 Fed. R. Serv. 3d (Callaghan) 332; 2017 WL 5664850

MARYA J. LEBER, SARA L. KENNEDY, LESLIE HIGHSMITH, SHERRI M. HARRIS, and all others similarly situated, Plaintiffs, -against- THE CITIGROUP 401(k) PLAN INVESTMENT COMMITTEE; THE BENEFIT PLANS INVESTMENT COMMITTEE OF CITIGROUP, INC.; MICHAEL CARPENTER; PAUL COLLINS; JAMES COSTABILE; VIRGIL CUMMING; DAVID DODILLET; ROBERT GROGAN; WILLIAM HEYMAN; ROBIN LEOPOLD; ALAN MACDONALD; MICHAEL MURRAY; CHRISTINE SIMPSON; RICHARD TAZIK; TODD THOMSON; TIMOTHY TUCKER; DAVID TYSON; RONALD A. WALTER; GUY WHITTAKER; DONALD YOUNG; JAMES ZELTER; BRUCE ZIMMERMAN; and DOE DEFENDANTS 1-20, Defendants.

Prior History: Leber v. Citigroup, Inc., 2010 U.S. Dist. LEXIS 25097 (S.D.N.Y., Mar. 16, 2010)

CORE TERMS

funds, Affiliated, class member, defendants', invested, quotation, marks, plaintiffs', named plaintiff, fiduciary, proprietary, monitor, class action, certification, Retirement, options, losses, statute of repose, plan participant, imprudent, loyalty, tolling, class certification, commonality, certify, fiduciary duty, adequacy, injuries, cases, putative class member

Civil Procedure, Special Proceedings, Class Actions, Certification of Classes, Pensions & Benefits Law, Civil Litigation, Causes of Action, Breach of Fiduciary Duty, ERISA, Class Actions, Judgments, Entry of Judgments, Multiple Claims & Parties, Constitutional Law, Case or Controversy, Standing, Elements, The Judiciary, Standing, Class Members, Named Members, Third Party Standing, Particular Parties, Employee Benefit Plans, Pension Benefit Plans, Defined Benefit Plans, Defined Contribution Plans, Business & Corporate Compliance, Fiduciaries, Fiduciary Responsibilities, Duty of Prudence, Duty of Loyalty, Prerequisites for Class Action, Prerequisites for Class Action, Numerosity, Commonality, Adequacy of Representation, Typicality, Notice of Class Action, Predominance, Superiority, Class Attorneys, Appointments