The opinion of the court was delivered by: SIDNEY STEIN, District Judge
Plaintiffs Isadore Fisher, Janna M. Wooten, Kelli M. Bunn,
Tammy T. Soileau and Amy K. Harvey have brought this action for
alleged breaches of fiduciary duty in violation of section 409(a)
of the Employee Retirement Income Security Act of 1974 ("ERISA"),
29 U.S.C. § 1109(a). Plaintiffs, who are present and former
participants in JP Morgan Chase & Co.'s 401(k) Savings Plan (the "Plan"), contend that defendants are fiduciaries with
respect to the Plan who have breached their fiduciary duties in
connection with the investment of Plan funds in JP Morgan Chase &
Co. ("JPM Chase") stock. Plaintiffs have now moved for
certification of the proposed class of Plan participants whose
personal accounts included units of funds that held shares of
common stock of JPM Chase. To the extent plaintiffs' claims are
purportedly brought pursuant to the right of action contained in
ERISA section 502(a)(2), 29 U.S.C. § 1132(a)(2), plaintiffs lack
standing, because they are asserting claims for damages to
individuals on behalf of a subset of Plan participants. Insofar
as plaintiffs bring their claims pursuant to the right of action
contained in ERISA section 502(a)(3), 29 U.S.C. § 1132(a)(3),
they have failed to satisfy their burden to establish compliance
with the requirements of Fed.R.Civ.P. 23. Accordingly,
plaintiffs' motion for class certification is denied.
Individual participants in the Plan maintained personal
accounts and chose from among a menu of investment options,
including the JP Morgan Chase Stock Fund, which in turn made
investments in the common stock of JPM Chase. (Id. ¶¶ 35-37).
Defendants allegedly violated their fiduciary duties to those
Plan participants whose personal accounts contained units of the
JP Morgan Chase Stock Fund. Accordingly, plaintiffs seek to
certify a class comprised of the following members:
All current and former participants and beneficiaries
of the JP Morgan Chase 401(k) Saving Plan ("Plan")
for whose individual accounts the Plan held shares of
common stock of the Chase Manhattan Corporation
("Chase") and/or JP Morgan Chase & Co. ("JPMC" or the
"Company") (such shares of common stock being held in
the form of units of the J.P. Morgan Stock Fund
and/or the JP Morgan Chase Stock Fund) at any time
from April 1, 1999 to and including January 2, 2003.
Excluded from the Class are Defendants herein,
officers and directors of Defendant JPMC, members of
their immediate families, and the heirs, successors
or assigns of any of the foregoing.
(Pls.' Supplemental Submission in Supp. of Mot. for Class Cert.
at 8). II. Legal Standard for Certification
When considering a motion for class certification, a court
should not address whether the plaintiffs have "stated a cause of
action or will prevail on the merits, but whether the
requirements of [Federal] Rule [of Civil Procedure] 23 are met."
Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 178,
94 S. Ct. 2140, 40 L. Ed. 2d 732 (1974) (citation and quotation marks
omitted). The burden is on the proponents of the class to
establish compliance with Rule 23. Amchem Prods., Inc. v.
Windsor, 521 U.S. 591, 614, 117 S. Ct. 2231, 138 L. Ed. 2d 689
(1997); Caridad v. Metro-North Commuter R.R., 191 F.3d 283, 291
(2d Cir. 1999). "Although the determination of whether to certify
a class is not an occasion for an examination of the merits of
the case, a court must conduct a `rigorous analysis' to decide if
the plaintiffs have met their burden of establishing the
prerequisites for certification under Rule 23." Spann v. AOL
Time Warner, Inc., 219 F.R.D. 307, 315 (S.D.N.Y. 2003) (quoting
In re Visa Check/Master Money, 280 F.3d 124, 135 (2d Cir. 2001)
(citation omitted), and Gary Plastic Packaging Corp. v. Merrill
Lynch, Pierce, Fenner & Smith, Inc., 903 F.2d 176, 180 (2d Cir.
Fed.R.Civ.P. 23 provides a two-tiered process for
determining whether certification of a proposed class is
appropriate. First, the Court must examine whether the four
threshold requirements of Fed.R.Civ.P. 23(a) have been met. To
achieve certification, the proponents of the class must show
that: "(1) the class is so numerous that joinder of all members
is impracticable, (2) there are questions of law or fact common
to the class, (3) the claims or defenses of the representative
parties are typical of the claims or defenses of the class, and
(4) the representative parties will fairly and adequately protect
the interests of the class." Fed.R.Civ.P. 23(a). The
proponents must also demonstrate that the action fits into one of
the categories set forth in Fed.R.Civ.P. 23(b). Before determining whether a proposed class satisfies the
requirements of Fed.R.Civ.P. 23, the Court must be satisfied
that plaintiffs possess standing to assert their claims, since
the Court cannot certify a proposed class if the proposed
representatives lack standing to sue. See O'Shea v.
Littleton, 414 U.S. 488, 494, 94 S. Ct. 669, 38 L.Ed.2d 674
(1974); Murray v. U.S. Bank Trust Nat'l Ass'n, 365 F.3d 1284,
1289 n. 7 (11th Cir. 2004); Piazza v. Ebsco Indus., Inc.,
273 F.3d 1341, 1351 (11th Cir. 2001); Carter v. West Publ'g Co.,
225 F.3d 1258, 1267 (11th Cir. 2000); Fallick v. Nationwide
Mutual Ins. Co., 162 F.3d 410, 423 (6th Cir. 1998); Selby v.
Principal Mut. Life Ins. Co., 197 F.R.D. 48, 56 (S.D.N.Y. 2000);
In re Bank of Boston Corp. Sec. Litig., 762 F. Supp. 1525, 1531
(D. Mass 1991); The Canadian St. Regis Band of Mohawk Indians v.
The State of N.Y., 573 F. Supp. 1530, 1533 (N.D.N.Y. 1983).
There are generally two aspects to standing, constitutional
standing pursuant to Article III of the Constitution and
prudential standing, which involves "`judicially self-imposed
limits on the exercise of federal jurisdiction. . . .'" Lerner
v. Fleet Bank, N.A., 318 F.3d 113, 126 (2d Cir. 2003) (quoting
Allen v. Wright, 468 U.S. 737, 751, 104 S. Ct. 3315,
82 L. Ed. 2d 556 (1984)); see also Warth v. Seldin, 422 U.S. 490, 500,
95 S. Ct. 2197, 45 L. Ed. 2d 343 (1975). "Prudential
considerations include `the general prohibitions on a litigant's
raising another person's legal rights, the rule barring
adjudication of generalized grievances more appropriately
addressed in the representative branches, and the requirement
that a plaintiff's complaint fall within the zone of interests
protected by the law invoked.'" Lerner, 318 F.3d at 126
(quoting Allen, 468 U.S. at 751). Included among prudential
considerations is the principle of statutory standing. Id.
Just as the requirement of constitutional standing imposes a
jurisdictional prerequisite to suit, id. at 126-27, so too
prudential standing considerations are generally treated as
jurisdictional. Id. at 127; see also Thompson v. County of
Franklin, 15 F.3d 245, 248 (2d Cir. 1994). The U.S. Court of Appeals for the Second Circuit has held that an
exception to that general rule exists "if merits issues are so
intertwined with the standing issue that any distinction becomes
`exceedingly artificial'" Lerner, 318 F.3d at 127-28 (quoting
Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 97 n. 2,
118 S. Ct. 1003, 140 L. Ed. 2d 210 (1998)). Plaintiffs have not
argued that that exception applies here. The statutory standing
question addressed below is sufficiently distinct from questions
relating to the merits of plaintiffs' causes of action that the
Court may properly adhere to the general rule that prudential
standing considerations constrict the Court's power to entertain
certain actions. The Court has therefore treated plaintiffs'
establishment of statutory standing as a jurisdictional
prerequisite to the perpetuation of this action. See id. at
Plaintiffs have brought three breach of fiduciary duty claims
one for imprudent investment, one for misrepresentation or
omission and one for improper supervision of other fiduciaries.
Plaintiffs assert these claims pursuant to two distinct statutory
provisions. The first is contained in ERISA section 502(a)(2),
29 U.S.C. § 1132(a)(2), and allows a participant to bring an action
for appropriate relief pursuant to ERISA section 409(a),
29 U.S.C. § 1109(a), which provides that "[a]ny person who is a
fiduciary with respect to a plan who breaches any of the
responsibilities, obligations, or duties imposed upon fiduciaries
. . . shall be personally liable to make good to such plan any
losses to the plan resulting from such breach. . . ." In other
words, the right of action contained in section 502(a)(2) permits
an individual participant to sue a plan fiduciary for breach of
fiduciary duty on behalf of the relevant plan itself for losses
the plan has suffered. See Mass. Mut. Life Ins. Co. v.
Russell, 473 U.S. 134, 144, 105 S. Ct. 3085, 87 L. Ed. 2d 96
(1985) (explaining that "the entire text of § 409 persuades us
that Congress did not intend that section to authorize any relief except for the plan itself.") Section 502(a)(2) does not
provide individual plan participants a personal right of
recovery. See id.
The second statutory provision pursuant to which plaintiffs
bring their claims is ERISA section 502(a)(3). That section does
create a personal right to sue, but only for an injunction
against a violation of ERISA or the terms of the plan, on the one
hand, or for "other appropriate equitable relief (i) to redress
such violations or (ii) to enforce any provisions of [ERISA] or
the terms of the plan[,]" on the other. 29 U.S.C. § 1132(a)(3).
Section 502(a)(3) does not refer to section 409, and it is
therefore not limited to circumstances in which claims are
brought on behalf of the relevant plan itself. See Milofsky v.
Am. Airlines, Inc., 404 F.3d 338, 346 (5th Cir. 2005). Section
502(a)(3) may only be invoked, however, to bring suit for
traditional equitable remedies See Great-West Life & Annuity
Ins. Co. v. Knudson, 534 U.S. 204, 122 S. Ct. 708,
151 L. Ed. 2d 635 (2002).
Plaintiffs' motion to certify the proposed class is addressed
below first to the extent their claims are purportedly brought on
behalf of the Plan pursuant to ERISA section 502(a)(2) and second
to the extent their claims are brought in their personal
capacities pursuant to ERISA section 502(a)(3).
IV. Claims Brought Pursuant to ERISA Section 502(a)(2)
As discussed above, ERISA section 502(a)(2) does not provide
for the recovery of damages to individuals. Rather, participants
in a plan possess standing to sue pursuant to section 502(a)(2)
only insofar as they assert a cause of action on behalf of the
plan itself. See Russell, 473 U.S. at 144. Here, defendants
urge that plaintiffs lack standing to bring their claims on
behalf of the Plan, because plaintiffs are a subset of Plan
participants i.e, those who included units of the JP Morgan
Chase Stock Fund in their Plan investments who seek recovery
for individualized injuries. Plaintiffs do not dispute that they
seek damages to individuals, but they insist that section
502(a)(2) is available to them nonetheless, because the ...