Last month with ERISA class action suits in the news, I blogged about a recent ERISA class action suit in which the Fifth Circuit Court of Appeals vacated a lower court’s decision certifying the case as a case action. Plan participants of the EDS 401(k) plan claimed that the fiduciaries of the plan improperly required them to purchase Company stock even after the stock became an "imprudent investment".
I said that I would leave it to the attorneys to comment on the implications of this case on the current class action suit lineup. Alston & Bird did exactly that today in their ERiSA Litigation Advisory, Fifth Circuit Panel Reverses Class Certification in 401(k) Stock Drop Litigation:
Several district courts have recently grappled with issues similar to the ones before the Fifth Circuit in Langbecker, and some have also determined certification to be inappropriate, at least in part. As the first circuit court to address these issues, the Fifth Circuit’s decision is of notable consequence and it provides defendants with authority to support their effort in defending against class certification.Given the importance of the issues and the forcefulness of the dissent, however, this decision may be headed for further review by an en banc Fifth Circuit.
Note: In referring to the U.S. Court of Appeals for the Fifth Circuit in my prior post, I said that it has jurisdiction for the U.S. District Courts in Louisiana and Texas. I neglected to include Mississippi. Paul Secunda, assistant law professor at the University of Mississippi School of Law and a co-editor of the Workplace Prof Blog kindly pointed out the oversight. Thanks for the correction, Paul.