Davis v. Stadion Money Management, LLC
Analysis Group was retained on behalf of investment advisor Stadion Money Management in an ERISA class action suit brought by investors in employee retirement plans administered by United Life Insurance Company. Certain plans included Stadion-managed investment products as options. The plaintiffs alleged that Stadion violated ERISA by breaching its fiduciary duty to plan participants when it directed their investments to Stadion- and United-affiliated funds despite the availability of funds that had lower fees and performed better. They sought to certify two classes of participants in approximately 1,650 plans administered by United that included either of the two Stadion-managed suites of investment options over the proposed class period.
An Analysis Group team led by Managing Principal Michael Beauregard and Vice Presidents Eileen Lu and Eric Nguyen supported multiple affiliates. Steven Gissiner filed expert reports on class certification issues and rebutted the submissions of the plaintiffs’ experts. Mr. Gissiner opined that class certification was inappropriate in this case because of differences in the nature of the various plan sponsors who selected the Stadion products for inclusion in their plan lineups, as well as differences in the non-Stadion investment options made available to plan participants and the fee structure for those options. The large number of plan-specific and participant-specific variations, he submitted, precluded a class-wide assessment of harm and, by extension, damages. The Analysis Group team also supported affiliate Kristen Willard, who submitted expert reports rebutting the opinions of the plaintiffs’ experts on damages issues.
A judge in the US District Court for the District of Nebraska denied certification of the class, holding that the plaintiffs had not satisfied the requirements of Federal Rule of Civil Procedure 23. In particular, the court held that “[b]ecause of the many individualized differences between plans and class members, it is unlikely that there could be a classwide damages calculation. … The Court cannot evaluate the propriety of Stadion’s decisions without considering the individual employer plans.” Following the court’s denial of the plaintiffs’ class certification motion, the case was voluntarily dismissed with prejudice.