Lloyd v. Argent Trust Company

Background

Jamaal Lloyd and Anastasia Jenkins are former employees of W BBQ Holdings, Inc., which owns the Dallas BBQ restaurant chain. W BBQ’s Employee Stock Ownership Plan purchased 80% of W BBQ’s common stock in July 2016 for approximately $98.9 million, or about $247.22 per share. By December 2020, the price per share had declined to $18.52.

The plaintiffs allege that flaws in Argent Trust Company’s valuation process caused the plan to overpay for the stock, including through reliance on inflated financial projections from W BBQ’s owners. The defendants include Argent, W BBQ’s founder and members of his family, and two trusts. The plaintiffs seek to recover gains from the stock sale for the plan’s participants.

The plaintiffs moved to certify a class consisting of participants in the W BBQ employee stock ownership plan on or after July 29, 2016, who vested in whole or in part under the plan’s terms, and those participants’ beneficiaries. The proposed class excludes the defendants and their immediate family members, plan fiduciaries, and current or former W BBQ officers or directors.

Class-Certification Requirements

Class certification requires the plaintiffs to establish the requirements of Federal Rule of Civil Procedure 23. These include numerosity, meaning enough members that joining each person individually would be impracticable; commonality, meaning shared legal or factual questions; typicality, meaning the representatives’ claims are similar to the class’s claims; and adequacy of representation. The proposed class must also be identifiable through objective criteria and must fit within one of Rule 23’s categories for class actions.

The court found numerosity because the plaintiffs submitted evidence that the proposed class contains well over 1,000 members. It found commonality and typicality because the class members share questions such as whether the defendants violated fiduciary duties and whether the plan paid a fair price for the stock. The defendants did not dispute commonality, typicality, or the qualifications of the proposed representatives and class counsel.

The court also found that the class was adequately represented. It rejected the defendants’ argument that plaintiffs’ counsel had a conflict because counsel could receive a percentage of the plan’s recovery. The court explained that counsel’s financial interest in obtaining class certification did not, by itself, undermine adequate representation in this Employee Retirement Income Security Act case.

The defendants also argued that certification was unnecessary because the Department of Labor had filed a related action seeking restitution for plan participants. The court rejected that argument, noting that the Department of Labor’s goals were not precisely the same, its resources were limited, and plaintiffs’ counsel had filed this case earlier and had carried out most of the discovery. The court found the proposed class ascertainable because its members could be identified using objective criteria.

Rule 23(b)(1)(B)

The court held that certification was appropriate under Rule 23(b)(1)(B). This provision applies when separate cases could substantially affect the interests of absent class members. The plaintiffs’ claims alleged breaches of fiduciary duties owed to the employee stock ownership plan as a whole. Because any recovery would benefit the plan as a whole, the success or failure of one participant’s claims could greatly affect other participants’ claims.

Because certification was proper under Rule 23(b)(1)(B), the court did not decide whether certification was also proper under Rule 23(b)(1)(A) or Rule 23(b)(2).

Disposition

Judge Denise Cote granted the plaintiffs’ July 18, 2025 motion for class certification. The court certified the proposed class, appointed Jamaal Lloyd and Anastasia Jenkins as class representatives, and appointed Cohen Milstein Sellers & Toll PLLC as class counsel. The opinion decided the class-certification question; it did not determine whether the defendants ultimately breached their fiduciary duties or whether the plan overpaid for the stock.