Bailey v. LinkedIn Corporation
- Edward Davila
- 5:20-cv-05704
- U.S. District Court · Northern District of California
- 5
In Bailey v. LinkedIn Corporation, Judge Davila denied LinkedIn’s requests to pause the case and its response deadline pending other appeals.
LinkedIn Corporation, its Board of Directors, and its 401(k) Committee must proceed with the case and respond to the plaintiffs’ second amended complaint; the plaintiffs’ case will not be paused based on the pending Hughes and Kong appeals.
What happened
Bailey v. LinkedIn Corporation is a proposed class action in which Douglas Bailey, Jason Hayes, and Marianne Robinson allege that LinkedIn breached fiduciary duties under the federal employee-benefits law known as ERISA.
LinkedIn asked the court to pause the case while the Supreme Court considered Hughes v. Northwestern University and the Ninth Circuit considered Kong v. Trader Joe’s, and separately asked to pause its deadline to respond to the plaintiffs’ amended complaint. The court found those appeals were unlikely to resolve the remaining claims and that further delay could harm the plaintiffs’ ability to develop facts.
Judge Edward J. Davila denied both motions and ordered LinkedIn to respond to the amended complaint by January 27, 2022.
The detailed version
- Bailey v. LinkedIn Corporation · No. 5:20-cv-05704
- Edward Davila
- Jan. 12, 2022
Background
Douglas Bailey, Jason Hayes, and Marianne Robinson brought a proposed class action alleging breaches of fiduciary duties under the Employee Retirement Income Security Act of 1974, or ERISA. The defendants are LinkedIn Corporation, LinkedIn Corporation’s Board of Directors, and LinkedIn Corporation’s 401(k) Committee, collectively referred to as LinkedIn.
The court had previously granted in part and denied in part LinkedIn’s motion to dismiss the operative amended complaint. It dismissed all of the plaintiffs’ liability theories except claims based on the Freedom Fidelity funds, dismissing some theories for lack of standing and others for failure to state a claim. The plaintiffs then filed a second amended complaint.
Motions to Stay
LinkedIn asked the court to stay, meaning temporarily pause, the case while the Supreme Court decided Hughes v. Northwestern University and the Ninth Circuit decided Kong v. Trader Joe’s. LinkedIn argued that those appeals could provide guidance on whether offering actively managed target-date funds instead of better-performing passively managed funds could support an ERISA fiduciary-duty claim. LinkedIn also filed an administrative motion to stay its deadline to respond to the second amended complaint while the court considered the motion to stay the case.
The plaintiffs opposed both motions.
Court’s Analysis
The court explained that it has discretion to stay proceedings and must weigh the possible harm from a stay, any hardship or unfairness to the party opposing the stay, and whether a stay would promote the orderly resolution of the case. The party seeking a stay bears the burden of showing that a stay is needed.
The court concluded that Hughes and Kong were not likely to definitively resolve this case. Although those appeals involved allegations concerning fees and actively managed funds, neither appeared to focus expressly on whether a passively managed fund could serve as an adequate comparison for an actively managed fund. The court also noted that its earlier ruling had not relied on Hughes or Kong and that LinkedIn had already cited other authorities in its prior motion to dismiss.
The court further found that the case had been pending since August 2020 with little progress, so additional delay could prejudice the plaintiffs’ ability to develop necessary facts. LinkedIn identified no hardship or unfairness beyond having to litigate the case, which the court held was not enough to justify a stay.
Disposition
The court denied LinkedIn’s motion to stay the proceedings and denied LinkedIn’s administrative motion to stay the pleading deadlines. It ordered LinkedIn to respond to the second amended complaint by January 27, 2022.
Read the full 5-page opinion on CourtListener, the free public archive maintained by the Free Law Project.