Retirement: Class certified in imprudent investment suit

Where plaintiffs alleged a plan sponsor violated fiduciary duties by failing to monitor and remove imprudent investment options from the plan, their motion for class certification was granted.

Background

Peter Trauernicht and Zachary Wright, on behalf of themselves, the Genworth Financial Inc. Retirement and Savings Plan and all other similarly situated individuals, filed suit against Genworth Financial Inc. alleging that Genworth breached its fiduciary duties under the Employee Retirement Income Security Act, or ERISA. Plaintiffs move the court for an order certifying the proposed class under Federal Rule of Civil Procedure 23(b)(1), appointing plaintiffs as the class representatives and appointing plaintiffs’ counsel as counsel for the class.

Standing

Genworth argues that the class cannot be certified because plaintiffs have failed to adduce evidence that each class member has suffered an injury-in-fact. At the class certification stage, however, the standing inquiry focuses on the standing of the class representatives. The court finds that Trauernicht and Wright possess standing for each claim pressed and for each form of relief sought.

Plaintiffs have alleged fiduciary duties owed to them and the Plan and that Genworth violated those duties by failing to monitor and remove imprudent investment options from the Plan. Furthermore, that conduct is alleged to have caused injuries, and declaratory relief would redress the alleged injuries.

Genworth argues that Trauernicht has not suffered any financial losses to his individual account from the retention of the BlackRock TDFs and therefore lacks standing to pursue relief as a class representative. Genworth’s argument ultimately reflects a disagreement over the proper measurement of damages. In the context of damages, Rule 23 simply requires that losses be capable of measurement on a class-wide basis. Plaintiffs easily satisfy that requirement.

Rule 23

The court will modify the class definition to Plan participants and beneficiaries whose accounts were invested in the BlackRock TDFs during the Class Period. The court otherwise finds that the requirements of Rule 23(a) are satisfied.

In addition to satisfying the requirements of Rule 23(a), plaintiffs must also satisfy at least one subsection of Rule 23(b). Plaintiffs move to certify the class under Rule 23(b)(1). The court finds that certification under Rule 23(b)(1) is appropriate under both subsections (A) and (B). Genworth makes four arguments for why Rule 23(b)(1) certification is not appropriate, but none are persuasive.

Plaintiffs’ motion for class certification granted.

Trauernicht v. Genworth Financial Inc., Case No. 3:22-cv-532, Aug. 15, 2024. EDVA at Richmond (Payne). VLW 024-3-422. 43 pp.