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Douglin v. Greatbanc Trust Co., Inc.

United States District Court, S.D. New York

June 30, 2015

BEVERLEY DOUGLIN, PATRICIA MCALMONT, and NORVA MORRIS-LEWIS, Plaintiffs,
v.
GREATBANC TRUST COMPANY, INC., Defendant

Ordered Filed Date: May 21, 2015

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For Beverley Douglin, Plaintiff: Catha Worthman, LEAD ATTORNEY, PRO HAC VICE, Lewis, Fineberg, Lee, Renaker & Jackson, P.C. (CA), Oakland, CA; Daniel Mark Feinberg, LEAD ATTORNEY, Lewis, Feinberg, Lee, Renaker & Jackson, P.C., Oakland, CA; Dana Elizabeth Lossia, Richard Alan Levy, Levy Ratner, P.C., New York, NY; Michael Joseph Scimone, Outten & Golden,LLP (NYC), New York, NY; Paul W. Mollica, Outten & Golden LLP, Chicago, IL.

For Patricia McAlmont, Norva Morris-Lewis, Plaintiffs: Catha Worthman, LEAD ATTORNEY, PRO HAC VICE, Lewis, Fineberg, Lee, Renaker & Jackson, P.C. (CA), Oakland, CA; Dana Elizabeth Lossia, Richard Alan Levy, LEAD ATTORNEYS, Levy Ratner, P.C., New York, NY; Daniel Mark Feinberg, LEAD ATTORNEY, Lewis, Feinberg, Lee, Renaker & Jackson, P.C., Oakland, CA; Michael Joseph Scimone, LEAD ATTORNEY, Outten & Golden,LLP (NYC), New York, NY; Paul W. Mollica, LEAD ATTORNEY, Outten & Golden LLP, Chicago, IL.

For GreatBanc Trust Company Inc., Defendant: Theodore M Becker, LEAD ATTORNEY, Julie A Govreau, Drinker Biddle & Reath LLP, Chicago, IL; Marsha Jessica Indych, Drinker Biddle & Reath, LLP (NYC), New York, NY.

For People Care, Inc., Interested Party: Jeffrey Adam Udell, LEAD ATTORNEY, Olshan Frome Wolosky LLP, New York, NY.

MICHAEL H. DOLINGER, UNITED STATES MAGISTRATE JUDGE. HONORABLE RONNIE ABRAMS, U.S.D.J.

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ORDER ADOPTING REPORT AND RECOMMENDATION

Ronnie Abrams, United States District Judge.

Plaintiffs bring claims pursuant to Title I of the Employee Retirement Income Security Act of 1974 (" ERISA" ), 29 U.S.C. § § 1001 et seq., alleging that Defendant breached its fiduciary duty under ERISA and engaged in transactions forbidden by ERISA. Plaintiffs have moved for class certification and for appointment of class counsel. Defendant did not oppose the motion. Before the Court is Magistrate Judge Dolinger's Report and Recommendation, dated May 21, 2015, recommending that Plaintiffs' motion be granted. Objections to the Report and Recommendation, if any, were to be filed by June 8, 2015. No objections have been filed.

" Where no timely objection has been made ... a district court need only find that there is no clear error on the face of the record in order to accept the Report and Recommendation." Pineda v. Masonry Constr., Inc., 831 F.Supp.2d 666, 670 (S.D.N.Y. 2011) (citation omitted). The Court has reviewed the Report and Recommendation for clear error and found none. The Court therefore adopts the Report and Recommendation.

The Clerk of Court is respectfully requested to close the motion pending at ECF No. 37. SO ORDERED.

REPORT & RECOMMENDATION

MICHAEL H. DOLINGER, UNITED STATES MAGISTRATE JUDGE.

This putative class action arises under Title I of the Employee Retirement Income Security Act of 1974 (" ERISA" ), 29 U.S.C. § § 1001 et seq., and is brought by plaintiffs who are home health aides employed by People Care Holdings, Inc. (" People Care" ) against the trustee of their Employee Stock Ownership Plan (" the " ESOP" ). Plaintiffs allege that defendant GreatBanc Trust Company, Inc. (" GreatBanc" ) breached its fiduciary duty under ERISA and engaged in transactions forbidden by ERISA when it purchased, on behalf of the ESOP, 100 percent of People Care from the company's owners in 2008, causing plaintiffs financial losses when the company's value diminished significantly thereafter from the purchase price of $80 million. (First Am. Compl. ¶ ¶ 1-3; Plaintiff's Memorandum in Support of Motion (" Mem." ) 3-6).

Plaintiffs seek a declaration that defendant breached its fiduciary duties and knowingly participated in breaches of fiduciary duty, as well as a declaration that any indemnification agreement between defendant and People Care or the ESOP violates ERISA and is null and void. (First Am. Compl. 26-28). They further seek injunctive relief to prevent future violations by defendant of its fiduciary responsibilities and to remove defendant as Trustee of the ESOP. (Id.). Additionally, plaintiffs seek restoration of losses arising from the breach, and the return of profits that defendant made through use of the ESOP assets, as well as other relief, such as surcharge, an accounting for profits,

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disgorgement of fees that defendant received in conjunction with the February 2008 transaction, the imposition of a constructive trust or equitable lien on any funds wrongfully held by defendant, attorney's fees and costs, and prejudgment interest. (Id.).

On February 13, 2015, plaintiffs filed their motion for class certification (Doc. 37-41), which defendant does not oppose. (Letter from Marsha J. Indych on behalf of GreatBanc Trust Company, Inc., Doc. 50, March 6, 2015). Plaintiffs seek certification of a class consisting of all persons who were participants in the People Care ESOP on February 1, 2008 or at any time thereafter. (Mem. 2). They exclude from the class the selling shareholders, officers and directors of defendant, and all of their legal representatives, successors, and assigns. (Id. at 2-3). Plaintiffs also seek appointment of their counsel[1] as class counsel. For the reasons provided below, we recommend that plaintiffs' motion be granted.

DISCUSSION

Even when unopposed, a motion for class certification must be evaluated on its merits. Fed.R.Civ.P. 23(c)(1)(A)-(B). See In re Longtop Financial Technologies Limited Securities Litigation, 2013 WL 3486990, *1 (S.D.N.Y. July 11, 2013); Assif v. Titleserv, Inc.,288 F.R.D. 18, 21 (E.D.N.Y. 2012). This requires our assessment, through " rigorous analysis," of whether the requirements of Rules 23(a) and 23(b) have been met. Miles v. Merrill Lynch & Co. (In re Initial Pub. Offering Sec. Litig.), 471 F.3d 24, 33 (2d Cir. 2006). " The party seeking class certification bears the burden of establishing by a ...


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