ERISA and Federal Rule 23... Point 1

In an ERISA case pending in the Northern District of Illinois involving breach of fiduciary duty and prohibited transaction claims, the plaintiffs filed a motion asking the court to allow them to proceed in a representative capacity on behalf of the plan under ERISA section 502(a)(2) rather than require them to certify a class under Federal Rule 23.  The District Court in Chicago denied that motion based on the defendants' opposition, and suggested that the case proceed, not as a class action under Federal Rule 23, but as a "derivative action" under Federal Rule 23.1.

On an issue of first impression, the Court adopted our argument that the plan — in this case an ESOP — was the real "party in interest," and as such, the plaintiffs are effectively bringing their claims derivatively on behalf of the plan.  See Fish v. Greatbanc Trust Co., et al., ___ F. Supp. 2d ____, 2009 WL 3649814.  As a result, the court concluded that there was "no need for the parties to jump through the procedural hoops required for Rule 23 class certification" and suggested that Rule 23.1 may provide a more efficient means to "bind all Plan participants to the holdings ultimately reached by this Court."  We will be putting on a stipulation to that effect shortly.

If you practice in ERISA class action litigation (like we do), the Fish approach may be an alternative to the "class or no class" debate. 

Article reprinted from Westlaw with permission of Thomson Reuters.  If you wish to check the currency of this case you may do so by using KeyCite on Westlaw at


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