On June 30, 2022, the Honorable Edward G. Smith of the United States District Court for the Eastern District of Pennsylvania certified a class of over 63,000 former employees and retirees of B. Braun Medical Inc. (the “Company”) in a class action lawsuit brought under the Employee Retirement Income Security Act of 1974 (“ERISA”). The decision follows the Third Circuit’s recent ruling in Boley v. Universal Health Systems.
ERISA is a federal law that establishes standards of conduct for private industry retirement plans to protect workers. In this case, Plaintiffs allege that the Company, board of directors, retirement plan oversight committee, and 30 unnamed fiduciaries (collectively, “Defendants”) breached their fiduciary duties under ERISA by mismanaging the $571 million B. Braun Medical Inc. Savings Plan (the “Plan”), a defined contribution 401(k) retirement plan.
Specifically, Plaintiffs allege that Defendants mismanaged the Plan by (1) maintaining overpriced investments in Collective Investment Trusts (“CITs”) instead of less expensive managed fund options, (2) failing to obtain the cheapest available share classes, and (3) allowing the Plan to incur—and participants to pay—excessive recordkeeping fees. Plaintiffs further claim that Defendants should have used a flat fee, per-participant rate to pay for recordkeeping fees rather than the more costly revenue-sharing method.
The Class is defined as all persons who were participants or beneficiaries of the Plan between August 26, 2014 through the date judgment is entered in this action.
Defendants challenged Plaintiffs’ standing to bring claims on behalf of the class on the grounds that Plaintiffs invested in only three of the twenty-eight funds at issue in this litigation. However, the Court was not persuaded by this argument and looked instead to the recent Third Circuit Universal decision, which granted certification of a 60,000-member class even though the named plaintiff did not invest in every challenged fund. Both the B. Braun and Universal courts found class certification to be appropriate because defined contribution plan administration is uniform and affects all plan participants equally. Therefore, all participants have similar interests with respect to plan management, even if they are not invested in the same funds.
Updates will be posted to this blog as the matter proceeds through discovery. The caption for this lawsuit is Nunez et al. v B. Braun Medical Inc. et al, Case No. 5:20-cv-04195, filed in the Eastern District of Pennsylvania. The class is represented by Capozzi Adler, P.C.
The legal team at Miller Shah LLP has significant experience representing ERISA class action matters. If you have any questions regarding this subject or this post, please contact Samantha Kielbania (sjkielbania@millershah.com) or Alec Berin (ajberin@millershah.com). The firm can also be reached toll-free at (866) 540-5505.
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