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Taylor v. United Techs. Corp.

United States District Court for the District of Connecticut

June 3, 2008, Decided

3:06cv1494 (WWE)

Opinion

MEMORANDUM OF DECISION ON MOTION FOR CLASS CERTIFICATION

Plaintiffs David Taylor, Jim Conlin and Karl Todd, individually and on behalf of all similarly situated persons, have filed an action pursuant to the Employee  [*3] Retirement Income Security Act of 1974 ("ERISA"). Specifically, plaintiffs allege that defendants United Technologies Corporation ("UTC"), its Pension and Investment Committee ("PAIC"), and its Pension Administration Committee ("PAC") breached their fiduciary duties pursuant to ERISA with regard to an employee benefit plan. Plaintiffs now move for class certification.

BACKGROUND

The following background to plaintiffs' claims is reflected in the allegations of the amended complaint and the parties' briefs and the exhibits thereto.

UTC offers certain of its employees the opportunity to participate in an employee benefit plan known as the Employee Savings Plan ("Savings Plan"), which contains employee stock ownership plan provisions and is a tax-qualified 401(k) plan. The Savings Plan is governed by a single Plan document and all of the same investment options are available to all Plan participants. All Plan participants receive a Summary Plan Description ("SPD"), an annual report and quarterly statements for their individual accounts.

Under the Savings Plan, qualified employees may contribute a percentage of their before-tax earnings to the Savings Plan. UTC makes matching contributions  [*4] in UTC common stock rather than cash in varying percentages of the employees' eligible compensation.

Employees participating in the Savings Plan may choose to invest their contributions in any of 25 options. These investment options include eight collective trusts, sixteen retail mutual funds, and the UTC Common Stock Fund. Savings Plan participants may invest in the UTC Common Stock Fund by buying units of the Stock Fund.

Although the UTC Common Stock Fund invests in a single stock, the value credited to a Savings Plan participant's "units" do not track the value of UTC common stock because the UTC Common Stock Fund holds cash to fund participants' distributions, loans or investment changes. Plaintiffs allege that the holding of cash has a negative impact on the UTC Common Stock Fund returns, and defendants breached their fiduciary obligations with respect to the UTC Common Stock Fund by allowing excess cash to be held in the fund. Plaintiffs assert that they did not discover that defendants had breached their fiduciary responsibilities until shortly before the filing of this action because of acts of fraud and concealment and because of the false representations made to Plan participants  [*5] that the performance of the Stock Fund would reflect the total investment return on UTC common stock.

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2008 U.S. Dist. LEXIS 43655 *; 43 Employee Benefits Cas. (BNA) 2825

DAVID S. TAYLOR, JIM CONLIN, and KARL TODD, individually and on behalf of all similarly situated persons, Plaintiffs, v. UNITED TECHNOLOGIES CORPORATION, UNITED TECHNOLOGIES CORPORATION PENSION AND INVESTMENT COMMITTEE, UNITED TECHNOLOGIES CORPORATION PENSION AND ADMINISTRATION COMMITTEE, Defendants.

Subsequent History: Summary judgment granted by, Summary judgment denied by Taylor v. United Techs. Corp., 2009 U.S. Dist. LEXIS 19059 (D. Conn., Mar. 3, 2009)

Prior History: Taylor v. United Techs. Corp., 2007 U.S. Dist. LEXIS 57807 (D. Conn., Aug. 9, 2007)

CORE TERMS

common stock, named plaintiff, plaintiffs', breach of fiduciary duty, damages, fiduciary duty, certification, breached, expenses, invested, defendants', employees, subclass, Stock, funds, revenue sharing, proposed class, class member, fiduciary, adequacy, benefits, options, returns