Randall v. Greatbanc Trust Company

Background

Aryne Randall, Scott Kuhn, and Peter Morrissey were former Wells Fargo & Co. employees and participants in the Wells Fargo & Co. 401(k) Plan. The plan included an employee stock ownership fund. GreatBanc Trust Company was appointed by Wells Fargo to act as a named fiduciary for that fund, and Timothy J. Sloan was the sole member of the Employee Stock Ownership Plan Committee during the period described in the opinion.

The plaintiffs allege that the plan paid more than fair market value for Wells Fargo preferred stock and that defendants used dividend income from that stock to satisfy Wells Fargo’s employer matching-contribution obligations. They assert that this conduct breached fiduciary duties and involved transactions prohibited by the Employee Retirement Income Security Act (ERISA). The plaintiffs previously survived the defendants’ motions to dismiss. This order addressed the plaintiffs’ unopposed request to certify a class and appoint class counsel.

Class Certification

Under Federal Rule of Civil Procedure 23, a proposed class must satisfy four requirements: enough members that joining them individually is impractical, common legal or factual questions, claims typical of the class, and representatives who will adequately protect the class’s interests. The court found all four requirements satisfied.

The certified class includes:

All participants in the Wells Fargo & Co. 401(k) Plan from September 27, 2016, to December 30, 2022, who held any portion of their Plan accounts at any time during that period in the Wells Fargo ESOP Fund.

The court excluded individual defendants, their beneficiaries, their immediate families, and Wells Fargo’s officers and directors. The court noted that the plan had more than 300,000 participants with account balances during each year of the class period, and that the proposed class members were geographically dispersed. It also found common questions concerning whether the defendants were plan fiduciaries, breached fiduciary duties, engaged in prohibited transactions, and caused injury to the class.

The court concluded that the named plaintiffs’ claims were typical because the alleged conduct affected the plan as a whole. It also found that the plaintiffs and their attorneys had actively litigated the case, conducted discovery, and had relevant ERISA class-action experience. The court found no conflict between the named plaintiffs and the proposed class members.

The court further found that certification was proper under Rule 23(b)(1)(A) and Rule 23(b)(1)(B). It reasoned that separate lawsuits could produce inconsistent standards concerning the defendants’ conduct and could affect the interests of other plan participants because the plaintiffs sought relief for the plan as a whole.

Appointment of Class Counsel

Rule 23(g) requires the court to consider counsel’s work investigating the claims, experience with class actions and the relevant type of claims, knowledge of the applicable law, and available resources. The court found that Feinberg, Jackson, Worthman & Wasow LLP; Nichols Kaster, PLLP; and Bailey & Glasser LLP had the necessary experience and had already devoted substantial resources to the case.

The court appointed those three firms as class counsel. It cautioned that, if counsel later seeks attorneys’ fees and costs, the court will not award fees it considers duplicative, including unnecessary overlapping review of briefs and motions by lawyers at multiple firms.

Disposition

Judge Laura M. Provinzino granted the plaintiffs’ motion for class certification and appointment of class counsel. The court certified the stated class, appointed Aryne Randall, Peter Morrissey, and Scott Kuhn as class representatives, and appointed the three listed law firms as class counsel.