The U.S. District Court for the Central District of California first found that the proposed class satisfied the requirements of Rule 23(a): (1) the members of the proposed class must be so numerous that joinder of all claims would be impracticable; (2) there must be questions of law and fact common to the class; (3) the claims or defenses of the representative parties must be typical of the claims or defenses of absent class members; and (4) the representative parties must fairly and adequately protect the interests of the class.
However, where the plaintiffs failed was with their argument that they qualify under Rule 23(b)(1), which allows for certification if prosecuting separate actions by individual class members would create a risk of inconsistent or varying adjudications and establish incompatible standards for defendants, or when a judgment in one suit would be dispositive of the interests of the other class members who were not parties to the suit.
The court found that potential class members would be able to bring separate lawsuits without affecting the rights of other class members, and additionally said that under 9th Circuit precedent, lawsuits cannot be certified as class actions under Rule 23(b)(1)(A) when the proposed class seeks monetary damages. “Here, the Plan Participants primarily seek monetary damages—damages to the Plan, and demands that the First American Defendants make the Plan whole,” according to the opinion.
The First American Defendants initially opposed the class certification because the participants lack standing under the Employee Retirement Income Security Act, saying they cannot show a loss traceable to the First American defendants. However, the court said that “at the pleading stage, general factual allegations of injury resulting from the defendant’s conduct may suffice” as proof of loss.
The case is In re First American Corp. ERISA Litigation, C.D. Cal., No. 07-01357-JVS.